So, you’ve just joined a debt management plan. Your stress, your worries, your keeping track of money is completely over, right? Well, not exactly.
 
While it’s true that a debt management plan (or DMP) will relieve some stress and frustration, effort from you is still required. It’s your responsibility to stay on top of your DMP and make certain it is being managed correctly because - if it’s not - the financial burden will fall on you.
 
To keep yourself, and your DMP manager, in check, remember the following:

Don’t Take on Any More Debt: Once you join a debt management plan, your ability to rack up debt - as you know it - is over. Many DMPs stipulate that you are not allowed to accrue more debt while involved with them. They will periodically review your credit report and if you continue to charge your credit card or take out a bank loan, their assistance will be revoked.
 
This stipulation protects both the debt management company and you: what’s the point of trying to get out of debt if your actions just keep you in it.

Pay off Your Debt Until Your DMP is Approved: Enrolling in a DMP can take some time, time in which you will still be responsible for personally paying off your creditors. Before you stop paying your creditors, call them and make sure that they have approved your enrollment in a DMP, don’t just take the debt management company’s word for it. If they haven’t approved it, keep paying them as much as you can until they do.

Know What’s Included: Usually, a DMP is only used to pay off unsecured debt, such as your VISA bill or a personal loan you got from your bank. Secured loans, such as those used for your house and your car, are not included. It’s important to be aware of this and know there are certain bills you’ll still need to keep track of - and pay - on your own.

Check Up on Your Loans: Once your enrollment in a DMP has been approved by all your creditors, it’s still important to stay on top of things. A great way to do this is to occasionally check your credit card bills and loan statements, making sure that they are including the terms of the DMP. For example, if your DMP waves late fees or has a much lower interest rate, make sure your bills reflect this. If they don’t, call your debt management company and your creditor.

Check Your Credit Report: In addition to checking your credit card bills, you should also be checking your credit report. Your credit report should reflect an accurate report of your debt. If one of your accounts should be reported as current, make sure it is. If another should be reported as closed, make sure that’s noted. If anything looks fishy about your credit report, investigate further by contacting your creditors or your debt management company.

Make Monthly Payments: When it comes to a DMP, consistency is the name of the game. In order for your DMP to actually work, you need to consistently make payments. These must be made on time (or early if possible) and for the entire amount agreed upon. Falling behind on your payments not only screws up your credit report and adds on late fees, but it also forces you to fall out of favor with your debt management company. A debt management company wants to help you pay off your debt, but you need to be willing to do your part.

If You Absolutely Can’t Pay, Contact Them: If, for some reason, you are not able to make your monthly payment, don’t simply ignore it: it won’t go away. Instead, call your creditor and debt management company immediately. Not doing so may result in your dismissal from the DMP. This not only leads to you being on your own, but it may also resurrect the old terms of your debt, leaving you with a higher interest rate and a slug of penalties.

Check up on your DMP: There can be dishonesty in any profession, and debt management is not immune to this. For this reason, it’s important to be careful of the DMP you choose. Review testimonials, ask around and go with your gut.
 
After you are enrolled, check with your creditor to make sure your debt is being paid off in the right fashion.  Make sure the correct amount, with the correct interest rate is all being paid on time. Lastly, make sure that the DMP payments match your billing cycle. If they don’t you may be accruing late fees and not even know it.

Don’t Exit, if Possible: You really should never exit a DMP, not until it’s completed. Doing so may reawaken old penalties and leave you “untouchable” through the eyes of several other debt management companies.
 
If you are forced to exit through no fault of your own, the debt management company goes out of business, for instance, stop payments immediately and begin paying your creditors on your own. To avoid this kind of thing, only go with reputable counseling companies.

Live and Learn: Once your DMP has ended, make sure the lesson has not. Ultimately, it’s important to learn from your mistakes and develop a better relationship with money. You certainly don’t want to find yourself in overwhelming debt ever again.  Make a budget, stick to it, and stay far away from high interest credit cards and personal loans. A good rule of thumb to remember is if you can’t afford to buy it, don’t.

A DMP is a great way to free yourself from debt, but it certainly is not a free ride. Just as with all your finances, it’s important to know what is going on in your DMP so that you know what to fix in the event something goes wrong. A DMP is an assistance, it’s not a “do it for you.”