Debt Management Tips – What If Your Debt Management Company Has Gone Out Of Business???

In the current situation of the world financial crisis the saying “Nothing lasts forever” suits business as good as never. No business is safely protected from the influence of the world economic processes, and the credit counseling is not an exception. Now, let us take a situation when the credit counseling organization that is taking care of your debt management plan is shutting down? What are you to do?

Your debt management company may send you a notice of shutting down, telling you that your debt management plan has been transferred to another credit counseling agency. In other cases, they just tell you to keep track of your repayment transactions and take some actions to find another debt management organization. There are cases when a governmental agency is suing your credit counselor. In this case you may receive a letter from a third party.

So, once you find out that the company that has been dealing with your debt management plan is shutting down you need to:

-         in case you have been making your payments to the debt management company via an automatic withdrawal you need to contact your bank to stop making payments.

-         Make direct payments to your creditors.

-         Contact your creditors to notify them that your credit counseling company is shutting down. Ask your creditors if it’s possible to work out an individual repayment plan without any third party intermediaries, ask for a monthly payment reduction and interest rate reduction without a debt management plan.

-         You must have a copy of your credit report to see if there are any late or missed debt management payments, especially the ones you don’t expect to be there. If yes, you may call your creditors to ask them to remove these notations from your file, because it happened due to the credit counseling company going out of business. However, you should realize that your creditors are free to decline your request.

You must understand that whatever the reasons of the late or missed payments would be – for your fault, or due to the credit counseling agency shutting down, the consequences may be equally devastating. You can face serious problems that will finally increase your debt and worsen your credit score – late charges, lose lower interest rates and have the late payment notes on your file. So, once you find out that your credit counseling agency is going out of business you must act quickly to avoid the unnecessary problems with your debt management plan.