Best DMP to use?

[Anonymous]

I'm considering putting myself and my fiance in a DMP.  I have a lot of revolving accounts with overlimits and late payments, and he has a lot of collections.  My FICO is around 467 and his is somewhere around +500. I've been reading on the forums here trying to decide if that would be a good option for us, and although I've seen some negative views of DMPs, I have seen more positives and have read some first-hand accounts of success stories, so I think we should give it a shot.

Now, here's my question - I'm sure I can google "debt management" or "debt consolidation" and pull up the first link in the search results, but there's something inside of me telling me that's not the best thing to do! Can someone please lead me in the right direction? Any help is appreciated.  Thank you.

[Anonymous]

Have you tried discussing with your creditors?

What credit counseling does is they negotiate with your creditors and ask them to reduce APR. In the meantime closing your account also.

Then they assess your debt and see how much you can afford to payback a month. A payment plan is worked out and they auto withdraw funds from your bank account monthly and disperse the payment to the creditors. The credit counseling agency will also collect a monthly fee for their service.

I was in this kind of program for 4 years. My scores went up a little during the program but when I completed counseling, my scores dropped 50 points. It was lower than when I started the program.

I called the counselors and they could not give me an answer and kept repeating that they had nothing to do with it.

I had to find out the answer online on other forums and blogs.

Not to sound discouraging, debt management helps but I read somewhere that you can do it yourself by negotiating with the creditors. You just have to be diligent and have some self-discipline and make sure you pay your creditors after you have successfully negotiated with them. Otherwise if they lose trust in you, they will jack up the rates and not offer another chance.

[marty56]

---

Solarjuju wrote:

I was in this kind of program for 4 years. My scores went up a little during the program but when I completed counseling, my scores dropped 50 points. It was lower than when I started the program.

---

Jessica,

I sent you a PM with some DMP info.  I graduated DMP in November and I dont know what my scores were when I started but I am sure they were over 150 points less then they are now.  I dont think it would have been possible for me to get the all the CCC interest rates as low as the DMP program did.  Also I did not have the discipline at the time to get out of debt without help.

I dont think Solarjuju's result is typical of people in DMP since util counts more then age.

Message Edited by marty56 on 06-19-2008 02:38 PM

[Anonymous]

Try a company that is non-profit who wont charge you  outrageous fees or "hold your payments to negotiate a settlement later". Research by going to the NFCC website (National Foundation of Credit Counseling) and also pick a company that is Accreditated by the Council on Accredidation. I personally love Consumer Credit Counseling but whatever company you pick....research...research...and then research some more.

[marty56]

---

WisingUp1 wrote:

"hold your payments to negotiate a settlement later".

---

CCCS;s/DMP do not do this.  That is a tactic used by those so-called debt settlemnt companies.  IMHO I would stay far away from them.

[demi]

Jessica, I also sent a private message to you...you need to make sure its reputible.  They work great, just make sure you really have a dmp.

Good luck

[corkyduckfan]

            Jessica,

                         Just like the others say, do at lot of research and chech with the BBB as well.  I highly recommend Care One.  I have been with them for @2 1/2 years and have only 5 or 6 months to go before I finish.  They have done everything they said they would do and more.  A couple of times I had creditors say they didn't receive the payment and Care One would just fire me copy of payment of proof and that shut up the creditors every time.  They keep excellent records.

                                                                                                           Good Luck,

                                                                                                           Corky

[Anonymous]

One thing to consider about Credit cards in collection. The Collection Agency does not usually work with DMP's. You might get lucky and have a collection agency that will, but 95% of the time they won't. If the card went into collection recently (like within the past few weeks to a month) , the Credit Card company may still have the ability to pull it out of collection for you. Results vary from card to card.

I don't want to scare you or push you into a DMP, but its better for you to come up with a plan as soon as you can to avoid any further cards from going into collection.  Sounds like your time is limited..

I have been on a DMP since October of 2006. I was 32,000 in credit card debt. I am now down to like 17,500. My credit score bottomed out to 476.. I went up to 642 in March of this year.  I was using Scorewatch to see when I qualified to refinance my home. I was subprime at 10.5%... I was able to refinance in April to 6.125%. I no longer have Scorewatch. I figured the $19 a month my wife and I were paying to scorewatch would be better off putting it against a credit card. I was also able to qualify for 2 autoloans. Gas prices were getting too high so we traded our two vehicles for more efficiant vehicles.

Still between the house refinance and the vechicles ,the extra cash didn't really help us pay more credit card debt. It only helped cover for the increase prices in energy and food. That was kind of a bummer.. LOL

I might subscribe to Scorewatch again in the future. I didn't yet qualify for the best rate on the car loans. I might refiance the autos once I can get a better score.

The DMP really helped me. I learned how set up a budget, and learn how to manage money, how to takle debt, and how to become a better person. Its stressful when you are drowning in revolving debt. Its stressful on a  marriage, family, and can ruin your performance at your job.I am still not out of the woods yet. I won't get there until sometime in 2010. Its scary because its still a long time to get there. I worry a lot about the economy, my job, how to afford household and personal emergencies (leaky roof, appliances breaking, Medical problems).  At least I can sleep better at night knowing that in a short time I'll be totally out of debt.

Message Edited by Pants on 06-21-2008 06:45 AM

Message Edited by Pants on 06-21-2008 07:38 AM

[marty56]

---

Pants wrote:

The DMP really helped me. I learned how set up a budget, and learn how to manage money, how to takle debt, and how to become a better person. Its stressful when you are drowning in revolving debt. Its stressful on a  marriage, family, and can ruin your performance at your job.I am still not out of the woods yet. I won't get there until sometime in 2010. Its scary because its still a long time to get there.

---

Trust me when I say that the feeling you get when you make your last DMP payment will be worth the time and hardship that you had doing it.

Also a quick fix would not have solved my prblem since I probably would have been right back in debt.  Anyone hear who has used a BT or loan to pay off their CCs only to wind up back in debt again knows what I am talking about.  The years I spent in DMP forced me to use as strict budget and leran to think about what I did with credit.

It is hard to admit that you have a problem and even harder to fix it.  Keep working and keep the faith.

[uktaurusbulba]

I am in DMP now and to be honest, Im not a guy that spent alot. My problem was my career at the time. I was an equity trader and had periods of great success but periods with no income for awhhile. I had huge credit limits so I used the credit to live off. Anyway, it was ok for awhile until they started jacking up my rates. I was paying below 10% on an avg balance of like 50k but then it became like 26%. I was started up a business so it was very tough to finance the business, pay bills to survive, and pay down cards. For me, I wanted to go into DMP so I could get much lower rates and just see the balances go down making one steady payment. I really think its the way to go if you are in a bind, getting nowhere paying there 26%, but can make the dmp required payment. I know my minimums on credit card payments were about 1350 or so. The problem is that was pretty much just servicing the debt. Now, I pay like 1375 but $750 comes off the principal each month. I just started the DMP in february. I owed like 60k, its now down to 56k. I hope to be able to pay it off within 2 years but if I cant, I feel comfortable I can make that payment which is chipping it down every month. It lets me focus on building my business.