Debt Management Program: How To Research One

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Summary: One way to pay down credit card debt and avoid bankruptcy is to enroll in a debt management program through a credit counseling service. But before enrolling in a debt management program you should research the credit counseling agency who offers it and make sure that the credit counselors are educated and qualified. Learn what questions to ask before enrolling in a debt management program.

WGN-TV Show Notes -- June 27, 2001

ANCHOR: The typical American now carries a credit card debt of more than 8 THOUSAND dollars.

ANCHOR: More Americans are looking for help in paying down their debt and staying out of bankruptcy. Money and real estate expert Ilyce Glink is here with some questions you should ask if you're thinking about going to a credit counseling agency for help.

Welcome

ILYCE: The amount of debt Americans carry has doubled over the past decade. And with the upcoming change in the bankruptcy law, more consumers than ever will be seeking the services of credit counseling agencies. There are for-profit and not-for-profit credit counseling agencies, and they offer a variety of services.

Credit Counseling Agency Services

• Budget counseling
• Homeownership classes
• Debt management programs

ILYCE: Before you sign up with a credit counseling agency, there are some specific questions you should ask about what kind of help is available, and who is going to give it. Consider asking these questions:

Questions You Should Ask

1. Are counselors certified? Are they college grads?
2. Who accredits the agency?
3. Is the agency financially sound? Who audits the books?
4. What fees are charged? Who supports the agency?
5. How many people does the agency counsel?
6. What program do you recommend for me?

ILYCE: If you enter a debt management program, the counselor should be able to negotiate to reduce your debt or the interest rate with your creditor. But be prepared to pay off your debt for three to four years, depending on how much you earn and how big the debt it. And, be prepared for the negative impact the debt management program will have on your credit score. But if your only other alternative is bankruptcy, a debt management program is a much better choice.

For more information:

www.NFCC.org (National Foundation for Consumer Credit)

Posted June 27, 2001.

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Related Topics

• bankruptcy, 
• credit, 
• credit card debt, 
• credit cards, 
• credit counseling, 
• debt management program

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