In a slowly-recovering economy, some may have trouble emerging from a mountain of bills and debts. For those people, debt recovery may seem impossible. However, there are options for consumers looking to avoid the wrath of debt collection services, which could garnish wages. One such option is consulting a debt management company.

How it Works

Debt management companies take a look at one's existing expenses, and offer solutions on how to save money. They take a look at expenses and also work directly with lenders, negotiating for a lower interest rate and monthly payment. By consolidating the loans, debtors are able to make one monthly payment instead of numerous ones to various lenders. These companies also answer any questions one may have about his or her debts and consolidation, and may provide a written quote with a detailed estimated payment. This quote should also outline the terms of the program.

What to Watch For

Since it involves dealing with personal finances, one must be careful when selecting a debt management company. Some businesses may have shady backgrounds, and only care about making money. To avoid getting ripped off, be sure to remember a few tips.

-Accreditation
Not every organization has ulterior motives when helping consumers. Checking the Better Business Bureau (BBB) is a good start when looking for the right company to help in one's debt recovery. The BBB can provide a list of reputable companies to choose from.

-Word of Mouth
While BBB accreditation is one of the best recommendations out there, asking family or friends also works. They may also be able to vouch for whether or not a company is reliable, based on personal experience.

-Message Boards
Online discussion boards also provide first-hand accounts of what, or who, to check out or avoid. However, like many internet resources, one could simply act as a plant for the company and offer good, but deliberately misleading, advice, or badmouth the company. Also, remember the phrase €your mileage may vary€, and that no two experiences are the same.

When choosing an organization, also remember that while a lower payment may save money, it can also prolong the loan by several months. Also, with added interest, there is a chance a consumer will wind up paying significantly more, so paying a little extra is always a good idea. That way, one can pay off the loan much quicker, and get back on the road to financial freedom.