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4 Tips to Hiring a Better Debt Management Firm

Posted on July 7, 2021 by Marc Johnson

Individuals in debt who would like to use the help of a debt management company should do research before committing themselves. An unscrupulous debt management company can damage a debtor's interests in many ways, so make sure to keep the following 4 points in mind before hiring a debt management company:

1. Steer clear of any agency that calls you by telephone or sends you spamthe majority of debt management companies advertise in the yellow pages or on the net, but don't over-aggressively solicit clients. Therefore, there's a fantastic chance any firm which does this isn't on the level. Debt management companies which follow a cold calling coverage or send unsolicited emails will usually not have the ability to supply any solid references. The majority of these businesses do not even bother to maintain a reserve fund, which acts as a guarantee for the debtor his creditors will be paid.

2. Non-profit agencies don't necessarily offer better support: First, not all non-profit debt management companies offer their services free; some companies charge up to 15 percent of the debt amount. Being a non-profit organization doesn't produce a debt management company a much better and more efficient service supplier than the ones that bill for the services. In actuality, companies charging for their support are under a duty to free their customers of debt as economically as possible since they're earning a profit from their work and their profitability is directly connected to their own credibility and standing in the marketplace.

3. Never part with credit card information on the phone: A reputed and honest debt management company won't ever ask you to supply your credit card number or bank information on the telephone. This is because they know that callers could be impersonated; additionally, the rise in online frauds is reason enough for people in debt to be extra careful when checking out debt management companies. Debt management companies that are acting in good faith won't ever ask a potential or an existing customer to part with sensitive information of any sort over the phone.

4. Do not think anyone who offers a deal that is too good to be true - it's: Frequently debtors encounter debt management agreements that promise to reduce their debt by half in limited time. This rarely occurs; however, the debtor does wind up paying large fees and a significant upfront sum to the debt management firm. Such firms also discourage debtors from communicating with their creditors; this is never a great idea and invariably contributes to a negative effect on the debtor's credit rating. If a debt reduction provider promises to provide more than a interest reduction and counseling on getting out of debt and remaining debt free, the claim should ideally not be taken at face value.