Debt management plans could help if you're struggling with debt rather than turning to bankruptcy, but those seeking debt management counseling should make sure that debt management companies will comply with the new rules introduced by the Federal Trade Commission.
The FTC's new regulations include banned upfront fees and require debt management companies to extensively disclose their statements.
One way to know which debt management company will help you, Steven Stark of A New Horizon Credit Counseling suggests:
"Other criteria to use when evaluating a reputable company should include checking if their credit counselors are certified and that the organization itself is certified with a recognized organization such as the International Organization for Standardization (ISO); making sure the agency is licensed; selecting a company with a long history; avoiding high upfront or monthly fees; and of course getting everything in writing," Stark said.
As of Sept. 2010, the FTC's new regulations required disclosure statements. The upfront fee ban started on Oct. 27, 2010. According to industry experts, debt management could be helpful for customers, but caution should be taken.
