Debt Management Programs and Debt Management Companies

Getting out of debt is not an easy feat. It not only requires determination and discipline; but the intervention of a professional counselor as well. However, debt management is not a simple process. You have to choose which program suits you best and pick the right team to help you get back on your feet. Credit counselors play a vital role to your success in overcoming debt but you have to make sure that the agency you are dealing with is licensed, reputable, and recommended.

Video: Ways to Stay Out of Debt

Debt Management

An author explained the concept of debt management in this perspective: debt management involves a designated third party assisting a debtor with repayment of his or her debt. There are plenty of credit counseling agencies that offer debt management plans to help individuals loaded with debt and damaged credit score. Debt management is also said to be the routine practice of spending less than one is earning. The debt management plan is by definition a structured repayment plan arranged by a designated third party, either by court order or by one’s own volition.

Debt Management Program (DMP)

A debt management program exists for the purpose of curbing your debt and offers you better alternatives than ending up in bankruptcy or foreclosure. This program can be utilized as a great and effective tool to manage your existing debts with the goal of reducing your debt balance. Through this program, you can arrange or let a professional arrange your system of payment and pay your dues on time and see your debts being dramatically reduced over time. A debt management program includes debt counseling, debt consolidation, and debt settlement.

Knowing What You Need

As there are several debt management programs to choose from, knowing the features of each will give you more information as you decide on which suits you best. There are three debt management programs to choose from.

The first is debt counseling. This is handled by certified credit counseling agencies that are professionally trained to aid you in making the right decisions about your growing debt and get your finances back in good shape. Through this type of counseling, counselors will educate you on debt and how it affects your credit score. Counselors will also guide you in creating an effective budget plan that will help you avoid the pitfalls of future debt. After assessing your financial standing, the credit counselor may recommend you to either go through debt settlement or debt consolidation.

The second program is debt consolidation. Otherwise known as a debt management plan, debt consolidation helps you pay off your debts “with a single affordable monthly payment” which reduces a good number of your payment schedules. Many credit counseling agencies also undertake debt consolidation for their clients. Once you enter into a debt management plan, the credit counseling agency will in turn talk to your creditors to negotiate lower interest rates and eventual waiver of some fees. Through this system you, as a debtor, can make a one-time payment every month for all your debts, which in turn will be remitted to your creditors in a timely manner. Counselors will also advise you to be prudent in your spending and avoid incurring additional debts.

The third is debt settlement. Through this plan, you are able to negotiate with your creditor to settle all your outstanding debts with a one-time payment that both of you agreed to. The amount settled agreed upon in debt settlement is usually lower than the actual debt. Creditors find this favorable to them. They would rather recover part of what you owed them instead of losing it all to bankruptcy should you file one. However, this damages your credit score and it is advised that you seek counsel from a professional credit counselor before choosing this program.

Finding A Debt Management Company

The customary practice for reputable credit counseling agencies is to employ counselors who are “certified and trained in consumer credit, money, debt management, and budgeting.” Those that are nonprofit are bound by law to provide debt education and counseling. However, the Federal Trade Commission took cognizance of the fact that there are credit counseling agencies that misrepresent their company. Some impose high fees without disclosing all of it and others persuade clients to make “voluntary” contributions which will place them deeper into debt. Others directly suggest for clients to resort to debt management without looking at their financial condition first. Some in the guise of being nonprofit companies lure clients by their misrepresentation.

What To Look For In A Debt Management Company

To avoid being victimized by scheming companies, here are some guide questions you can ask your potential credit counseling agency, as laid out by the Federal Trade Commission:

  1. Ask about their services. A licensed debt management company usually offers a wide range of services to make the process more convenient for their clients. Check if the company’s credit counselors are professionally trained to advise clients about their finances. What counselors must do during your session is to go through your financial condition with you and help you come up with you own financial plan and avoid incurring future debt. Sessions like these usually last for an hour. Stay away from debt management companies that lure you to resorting debt management right away before they study your financial situation. There is no one-size-fits-all plan when it comes to managing your finances. (If you were previously under a debt management plan or DMP which closed down, you should ask the credit counselor if there are measures to help restore the benefits you had on your previous DMP.)
  2. Ask if they are licensed to offer such services in your area. Customary practice among many states require organizations to secure a license before they can engage in such business within the state’s territory. See if they do.
  3. Ask if they have free information. Part of the business is to advertise their services. Inquiries about the nature of their business and services must be free of charge. If the company you inquired into is charging fees for such information, better skip to another.
  4. Ask about the printed agreement. Rule of thumb: if it is not in paper, it does not exist. Although contracts may be verbal, it is better to have proof of your agreement with the company you choose to engage their services. Make sure that the promises they have given you are put into writing and obtain a copy of that. Read all the contents of the contract before you sign. If they discourage you from reading the terms thereof, consider looking for another company.
  5. Ask about the training and expertise of their counselors. Preferably choose an organization whose counselors are trained and accredited by an independent organization, meaning those who do not hold affiliations with your creditors.
  6. Ask about their customer feedback. These can be done by asking information from your State Attorney General, local consumer protection agency, and Better Business Bureau. Normally, these organizations have information whether the company you are interested in has a history of customer dissatisfaction or feedback.
  7. Ask about their fees. Request a detailed quote of their services. Also inquire if all the fees are inclusive in the quote. If you think you cannot afford their fees, ask if their company has a policy in reducing or waiving fees for persons in your situation. If they cannot do that for you, try to look for an organization who does.
  8. Ask how their employees are compensated. Some companies may provide commissions to credit counselors who succeed in recommending DMP to their clients. Ask if the organization’s employees are receiving such commissions from creditors. If they cannot provide you with such information, start looking for another organization who can disclose that information.
  9. Ask about their confidentiality policy.
    Since the nature of these organizations’ job is to assess sensitive information about you, check if what measures they uphold to keep that information private and prevent abuse.

List of Consolidation Companies

To aid the process of your search, here is a list of licensed credit counseling agencies, their address and contact numbers:

Alliance Credit Counseling, Inc.
Suite 100
13777 Ballantyne Corporate Place
Charlotte, NC 28277
(704) 943-0332

American Consumer Credit Counseling, Inc.
130 Rumford Ave, Ste 202
Newton, MA 02466
(617) 559-5700

American Debt Resources, Inc
248C Larkfield Road
East Northport, NY 11731
(631) 912-9542

American Debt Solutions,Inc.
902 Clint Moore Rd., Suite 104
Boca Raton, FL 33487
(800) 246-4019

Black Hills Children’s Ranch, Inc.
DBA: Pioneer Credit & Debt Consolidation Services
1644 Concourse Drive
Rapid City, SD 57703
(605) 348-1608

Cambridge Credit Counseling Corp.
67 Hunt Street
Agawam, MA 01001
(413) 821-6919

CareOne Services, Inc.
8930 Stanford Boulevard
Columbia, MD 21045
(410) 910-2774

ClearPoint Financial Solutions, Inc.
8000 Franklin Farms Drive
Richmond, VA 23229
(804) 222-4660

Consolidated Credit Counseling Services, Inc.
5701 W. Sunrise Blvd.
Ft. Lauderdale, FL 33313
(954) 484-3328

Consumer Credit Counseling Services of Greater Atlanta, Inc.
100 Edgewood Avenue, N.E. Suite 1800
Atlanta, GA 30303
(404) 527-7630

Consumer Credit Counseling Services of Greater Atlanta, Inc.
a branch of Consumer Credit Counseling Services of Greater Atlanta, Inc.
3100 Interstate North Circle, Ste 300
Atlanta, GA 30339
(404) 606-0247

Consumer Education Services, Inc.
3801 Lake Boone Trail, Suite 400
Raleigh, NC 27607
(919) 785-0725

Consumers Alliance Processing Corporation #2
5937 Darwin Court #109
Carlsbad, CA 92008
(888) 533-3016

Credit Advisors, Inc.
1850 South 72nd St.
Omaha, NE 68124
(402) 926-2144

CreditGuard of America, Inc.
791 Park of Commerce Blvd #500
Boca Raton, FL 33487
(561) 241-5843

Debt Counseling Corp.
3033 Express Dr. N. Suite 103
Hauppauge, NY 11749
(631) 582-4300

DRS, Inc. (FN)
6213 N. Cloverdale Road, Ste 100
Boise, ID 83713
(208) 378-0200

Family Credit Counseling Service, Inc.
DBA: Family Credit Management Services
4304-06 Charles Street
Rockford, IL 61108
(815) 484-1600

Family Financial Education Foundation
724 Front St Ste 340
Evanston, WY 82930
(307) 789-2010

Family Life Services, Inc.
DBA: Family Life Credit Services
2345 Meadow Ridge Pkwy.
West Fargo, ND 58078
(800) 747-9307

Family Life Services, Inc.
DBA: Family Life Credit Services
a branch of Family Life Services, Inc.
40 North Swan Road
Tucson, AZ 85711
(520) 869-0210

Free In Five, LLC
DBA: Free In Five
1920 E. Broadway Rd.
Tempe, AZ 85282
(480) 894-1244

Garden State Consumer Credit Counseling, Inc.
DBA: Novadebt A Garden State Consumer Credit Counseling Organization
225 Willowbrook Rd.
Freehold, NJ 07728
(732) 409-6281

Greenpath, Inc.
DBA: Greenpath Debt Solutions
38505 Country Club Drive, Suite 210
Farmington Hills, MI 48331
(248) 553-5400

Greenpath, Inc.
a branch of Greenpath, Inc.
401 West Baseline, Suite 206
Tempe, AZ 85283
(480) 333-9992

Help Ministries Incorporated
DBA: Debt Free
1148 W. Baseline Road
Mesa, AZ 85210
(480) 556-0961

Help Ministries Incorporated
DBA: Debt Free
a branch of Help Ministries Incorporated
1920 E. Broadway Rd.
Tempe, AZ 85282
(480) 894-1244

InCharge Debt Solutions, Inc.
DBA: InCharge Debt Solutions
2101 Park Center Drive, Suite 320
Orlando, FL 32835
(407) 291-7770

iPayDebt Financial Services, Inc.
DBA: Cornerstone Financial Education
Suite 101 A
9433 Bee Cave Road, Building 3
Austin, TX 78733
(512) 263-0532

Lighthouse Credit Foundation, Inc.
2300 Tall Pines Dr., Suite 120
Largo, FL 33771
(727) 535-9653

Money Management International, Inc. #1
13430 North Black Canyon Hwy., Ste 250
Phoenix, AZ 85029
(602) 246-2227

Money Management International, Inc. #1
a branch of Money Management International, Inc. #1
7th Floor
9009 West Loop South
Houston, TX 77096
(713) 394-3400

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
13430 North Black Canyon Hwy., Ste 250
Phoenix, AZ 85029
(602) 247-2227

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
1215 Gail Gardner Way, Suite B
Prescott, AZ 86305-3423
(928) 778-5732

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
2615 N. 4th Street, Suite 2
Flagstaff, AZ 86004-3700
(928) 778-5732

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
4732 North Oracle Road, Suite 217
Tucson, AZ 85705
(520) 795-2227

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
2450 South Fourth Avenue, Suite 201
Yuma, AZ 85364
(520) 795-1678

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
5515 East Grant Rd, Suite 211
Tucson, AZ 85711
(520) 298-0568

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
950 W. Elliot Rd., Suite 122
Tempe, AZ 85284
(520) 293-3608

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
722 East Osborn Road, Suite 210
Phoenix, AZ 85014
(602) 274-4951

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
1717 E. Bell Rd., #7
Phoenix, AZ 85022
(602) 493-7486

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
17235 North 75th Ave., Suite C125
Glendale, AZ 85308
(623) 878-5118

Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
a branch of Money Management International, Inc. #2
1234 S. Power Rd., Suite 100
Mesa, AZ 85206-3740
(480) 962-4637

National Foundation for Debt Management, Inc.
14104 58th Street North
Clearwater, FL 33760
(800) 344-5153

North Seattle Community College Foundation
DBA: AFS Credit Counseling
2815 2nd Avenue, Suite 280
Seattle, WA 98121
(206) 374-8839

Robert S. Stearns, Inc.
969 W. Gurley Street
Prescott, AZ 86305
(928) 771-9434

Springboard Nonprofit Consumer Credit Management, Inc.
4351 Latham Street
Riverside, CA 92517-5438
(951) 781-0114

Take Charge America, Inc.
20620 North 19th Avenue
Phoenix, AZ 85027-3585
(623) 266-6100

Visual Credit Counseling, Inc.
1870 W. Prince Road, #39
Tucson, AZ 85705
(520) 650-6144