Debt Teacher - Free Debt Management

Free Debt Management - Is It Actually Free?

Is there such a thing as free debt management?

This is like asking if a free lunch is possible. The other day, my supervisor and I were treated to lunch by American Express Financial Services representative. She was a nice young lady and certainly knew her stuff, but talked mostly about IRAs and other means of investing wealth we don't have. Her good looks and British accent aside, it was essentially worthless, and now I get messages from her on my phone from time to time, asking me to sign up for more financial consultations, asking whether or not I am considering some form off debt management solution. Debt management? Me? Well, yes, yes of course I am. So, is there such a thing as a free lunch? Yes, with stipulations. The same can be said of free debt management.

Things you need to know about free debt management

Here's how debt management programs work. Most of the time, a company will lure you in by advertising itself as a free debt management service. After one or more sessions of personal debt management credit counseling, they implement a plan for you to consolidate your debts into one monthly payment. Sounds good, and for the most part it is. But are we actually talking about free debt management? Consider the following scenarios:

Yes. Your debt management program is set up and run by a non-profit corporation and is marketed as such.
Yes, at least for you. The agency charges fees for its services, but asks your creditors for payment instead of you. Creditors are usually willing to make this concession because you haven't been paying them at all until now. They are grateful to get any money from you, and that a reputable debt management service is overseeing the process.
No, but close. What's advertised as free debt management is not technically free, because you are asked to pick up nominal charges like phone and postage bills. Considering the money you will save in the long run, this is usually a minor issue.
No. Your agency is looking for a sucker upon whom to pile up secret, hidden charges. Some who offer free debt management are just shady cash-and-carry businesses like the ones you are indebted too in the first place. Ask questions now to save yourself embarrassment and a lot of money later.

As you can see, free debt management can be more than meets the eye. Be sure you know what you're up against. Why do we care? Because we're debt-teacher.com. It's what we do.

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