Credit Card Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Other Unsecured Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Number of Creditors    Select One 2 3 4+ Status of Bill Payments    Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind I want to    Select One Eliminate My Debt Consolidate My Debt Seek Advice Own a Home?    Yes  No

Debt Management Plan

If you have a serious debt problem, you may need help in figuring out what to do next. Many people turn to debt consolidation, or debt management plans, to help turn their finances around. But before you enroll in a plan, you need to look at all your options and the terms of the plan.

When you sign up for a plan, your creditors will close the accounts you are consolidating. You will not be able to sign up for new credit, which is a good thing if you are in truly dire straights. You will also take a hit to your credit report, as it will be reported that you are in a debt management plan. But this is a dual sword. While it hurts your credit report by showing you are unable to manage your debt on your own, in the future it will show that you took initiative to turn your finances around.

Before you sign up with any company, you should check with the Better Business Bureau. You should not work with a company with an unsatisfactory rating. Look for well-established companies that resolve complaints quickly and pay creditors on time, every time. You are putting your finances in the hands of strangers-do your research first.

You won't find a single debt consolidation agency that is free. Even non-profits have to charge fees to cover their costs. You should stay away from any agency that advertises no up-front fees, but require a voluntary contribution. You will probably find that members of the National Foundation of Credit Counseling offer the lowest fees. Remember, you are looking to cut your monthly expenses. Don't pay more than $50 a month for services.

Make sure that the company will work with all of your creditors before you sign on with them. You don't want to consolidate only part of your debt, get it all dealt with at the same time.

If an agency doesn't want to sit down and devote a lot of time to you, you should look for another place to do your business. If they promise that a meeting will take 30 minutes or less, you don't need to even meet with them. It will take much longer than 30 minutes to answer your questions and look at your financial situation in detail. Don't just sign up on the spot before you know the plan and all its details. Lay out your finances and ask for the plan of action before you pay.

You need to call your creditors and double-check your statements to make sure that the agency you are working with is paying your bills on time. If they aren't, you will end up with higher interest rates and late fees added onto your debt. Don't pay someone to mess up your credit even more.

Debt consolidation is a good plan for those who are in deep debt with no solution, option or way out. It can help you avoid bankruptcy and it will get your credit back in shape. But you must do your homework and find a good, reputable agency to help you.