UNDERSTANDING DEBT MANAGEMENT SERVICES
Consumers who are having trouble making ends meet might want to consider the
services offered by Debt Management or Debt Settlement Companies. These businesses
can be for-profit or not-for-profit enterprises. You may see advertisements on television,
in the newspapers, on pop-up internet ads or you may receive mail or even phone calls
directly from businesses advertising these services. Businesses providing debt
management and debt settlement services for a fee in Delaware must be licensed if they
do not fall within an exception to the law. Protect yourself from paying too much for too
little by understanding your options and rights.
Some businesses offering debt management services try to negotiate with your
creditors to reduce interest and late fees on your debt. You will talk first with a certified
credit counselor who will help you decide whether you need a debt management plan. If
you agree to a plan, you make payments to the debt management provider who makes
payments on your behalf to your creditors. You will be charged fees for the service.
Other businesses offer debt settlement services; they negotiate with your creditors
to settle a debt for less than the full amount owed. You will talk to a certified credit
counselor who will help you decide if you need this service. No payments are made on
your account by the debt settlement provider until a settlement is reached. Your account
will be delinquent unless you continue making the payments yourself. You will be
charged fees for the services.
Do not assume using debt management or settlement services is your only option
to resolve debt that may seem overwhelming. Think about alternatives such as:
• You may be able to pay off the debt with some careful budgeting that reduces
• Perhaps a part-time job or other plan to increase income could help you to find the
money to pay off your debts.
• Talk to your creditors di