Debt management companies are known to help people facing financial difficulties. However, it’s very likely that these companies may also face financial difficulties. Many companies, instead of seeking help from the government, choose to shut down its operations.
During the recent global crises, we had seen many banks, financial institutions, and other giants winding up. It didn’t really affect us directly. And if a debt management company winds up, it wouldn’t really be our concern. But what if it’s the one that you had chosen? What if you are on a debt management plan offered by this company? What happens after you have paid more than half the repayment amount and the company declares bankruptcy?
its debts mentioning that the Debt Management Plan would be transferred to another credit counseling company. Or it may just inform you about its winding up and will ask you to take some action regarding the pending payments. However, if the government body has taken some action against the company, it’s possible that you will get a notice from a third party. However, it’s important from your side to take some action if the debt management company for sale is yours. Since, you are on a debt management plan, you must:
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Call up your bank and ask them to stop further payments. This step is necessary only if you were making payments on your debt management plan through automatic withdrawal. |
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Don’t waste much time in finding another reputable debt management company. Start paying your creditor directly. |
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Call up all your creditors and let them know that you credit counseling agency is winding. Talk to them about your account and ask if they are ready to negotiate on the balanced amount. You can ask for a settlement amount, lower interest rate, waiving off overdraft and late fees, etc. |
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Call up the respective bureau and ask for a copy of your credit report. If it shows late payment even if you have been regularly making payments, it means the credit counseling agency was a fraudulent one. Call up the credit bureau and report it. |
Don’t fail to take these steps as soon as you know that the debt management company for sale is yours. |
