Moon Twp, PA (PressExposure) July 28, 2009 -- If you are seeking professional help in reducing your debt load, you may wonder what exactly the service entails. While each debt management solution differs slightly, there are some common denominators. At most companies offering debt management solutions, you will be assigned a counselor or given some information about debt. Debt and some financial terms will be explained to you. Then, you will be asked to sign a contract or agreement with the company. At this point, you will not have to do much. The company will contact your creditors and try to negotiate lower late fees and lower fees in general for you. You will then pay the debt management company a monthly amount. The company will use that money to pay your creditors.
1. Debt Counseling When you first sign up with any debt free programs, you will have a consultation with the company. This can be over the phone or online, but often these meetings will take place in person. You will likely be assigned a debt counselor and you and the counselor will review your situation. This will be a chance for the counselor to see how the company can help you; it is also an opportunity for you to ask any questions that need to be asked. You may be offered advice as to what steps you can take and the counselor should develop a reasonable and personalized action plan for you that outlines exactly how you can get out of debt.
2. Education Good non profit debt consolidation programs and companies will not only offer you counseling, but will also make a concerted effort to help you understand money and finances. In general, this education should be free or very reasonably priced. Education can include seminars and workshops, personal consultations, publications such as booklets or books, and multimedia presentations such as videos.
3. Contracts You will have to sign a contract with the debt management company. This will outline your payment options, your debt management fees, and the exact services you can expect from the company. The agreement will also allow the company to act on your behalf financially.
Before you agree to any debt management solution and before you sign any contract, it is vital that you read the contract and the fine print very, very carefully. You need to understand exactly what you are agreeing to and what you will be charged. You will want to take the agreement home first and read it before signing - do not just allow someone to hand you the agreement and sign it. If you don't understand the agreement, ask someone who does understand business or legal terms to carefully explain it to you. In signing the contract, you are giving a company a lot of power over your credit, debt, and finances, so you really can't be too careful.