DROWNING IN DEBT?
CHOOSE A DEBT REPAYMENT PLAN CAREFULLY

Attorney General J. Joseph Curran, Jr. says consumers should shop around before signing up with a credit counseling company to repay their debts. In the latest issue of his Consumer's Edge newsletter, Curran said that some consumers have been hurt by hidden fees and by sloppy practices that resulted in late or missed payments to the consumers' creditors. Others have been misled by companies that advertised debt management but actually steered clients to take out consolidation loans.

Companies offering such plans usually promise that they will get the consumer's creditors to reduce interest rates and accept smaller payments, and the consumer will only have to make one monthly payment. However, Curran said that some companies impose hefty fees disguised as voluntary "contributions" from the consumer. Many consumers have complained that they were never told about these "contributions" and were angry when the money they paid did not go to their creditors, but to the credit counseling company.

Curran advises consumers considering a debt repayment plan to:

• Look for a plan that does not require or request fees or "contributions."

• Call the Attorney General's Consumer Protection Division to see if other consumers have filed complaints against the company, and find out how long it has been in business.

• Read the agreement carefully to understand how it works and what your responsibilities are.

• Follow up with creditors, to be sure they have agreed to accept the plan and are receiving payments.

"Although these services promise to make things easier for you, you can't just write the check and think that everything is taken care of," Curran said. "You need to ask a lot of questions and follow up to be sure your creditors are being paid."

Consumers can request a copy of the Consumer's Edge on debt repayment plans by calling (410) 576-6500.

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