Bankruptcy Attorney Denver

Are you considering signing up for a Debt Management Plan (DMP) to reduce or eliminate your credit card debt?  Before you run out and pay a company who may or may not be legitimate, here are some things for you to consider.

#1 — Before you dump a truckload of money to the DMP company, make sure the creditors have agreed to this debt repayment plan.  There have been a good number of scam companies who have set up payment plans not agreed to by creditors and this has cost the consumer dearly.  Because of this, the FTC is even looking hard at some of these companies.

#2 — Make sure you realize that most DMP’s require that you are never late or never miss a payment.  If you do, the penalties can put you in a far worse position than you already are financially.  This is very important to realize since most of these “Debt Repayment Planners” will gloss over this detail with a pitch of “with a payment this low, why would you ever be late?”  Things happens, your case is proof of that already, is it not.

#3 — Don’t squander all possible savings to a DMP when you may need a little nest egg in these challenging financial times.  If you get laid off, will you be able to keep anything current if all of the extra money is headed to a DMP company?  You need to be smart so you can protect your assets!

#4 — Consider all your options.  Maybe you can repay through a DMP in a few years, but you could also do the same thing with a Chapter 13 Bankruptcy filing.  This type of filing will allow you to reorganize your finances so you can make positive traction on your debt.  You may also want to consider a Chapter 7 filing if your debt is completely out of control.  Chapter 7 will wipe away your obligation and allow you to start fresh.

At the end of the day, whatever method you choose, make sure to start living within your means because that is the best financial advice anyone can receive.