Debt management programs-questions

[JKSIMMONS]

I've been thinking about getting into a debt management program. I know they close all of your cards and you make structured payments on that debt. Sounds like a scary process on the surface but it also seems like it could be really effective.

How would this impact me if I wanted to sell my house and get a mortgage for a new house?

How does this look to lenders when you are done?

Does it essentially nuke your credit score?

Any info will help

[Shogun]

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@JKSIMMONS wrote:

I've been thinking about getting into a debt management program. I know they close all of your cards and you make structured payments on that debt. Sounds like a scary process on the surface but it also seems like it could be really effective.

How would this impact me if I wanted to sell my house and get a mortgage for a new house?

How does this look to lenders when you are done?

Does it essentially nuke your credit score?

Any info will help

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It's always a YMMV type of thing.  Some say it's good, some say it's bad.  I can just tell you my experience.  

One of the worst decisions I've ever made.  Nuked my scores, put me into a black hole of dispair which I thought there would never be light.  My recovery would have been so much easier, cheaper and faster had I not dealt with the scamming you know whats.

So, like I said, it's a matter of opinion.

[ezdriver]

I'd stay away fro 3rd party companies making money offering you services to do what you can do yourself.

What is your situation? If you are considering using a debt management service, you should probably not think about purchaing a home right now and just focus on getting your credit/debt in shape ... I call it being "mortgage ready".

If you are struggling to make payments, then let us know so we could recommend some strategies that may leave you with active tradelines. Closing tradelines is often a huge mistake. Paying down the debt on those tradeline should be the priority.

Let us know how we can help.

[spike69]

I do not have personal experience with these services but my brother and a friend both were seriously burned by a "national recognized and reputed" service. These services in many cases are PAID arms of creditors. Their interest is on the side of the creditor and not you. Many here have recommended the Dave Ramsey approach. I have seen some IRL success with this.

[JKSIMMONS]

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@ezdriver wrote:

I'd stay away fro 3rd party companies making money offering you services to do what you can do yourself.

What is your situation? If you are considering using a debt management service, you should probably not think about purchaing a home right now and just focus on getting your credit/debt in shape ... I call it being "mortgage ready".

If you are struggling to make payments, then let us know so we could recommend some strategies that may leave you with active tradelines. Closing tradelines is often a huge mistake. Paying down the debt on those tradeline should be the priority.

Let us know how we can help.

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well, we have about 25k in cc debt with about 71k in income. My wife has great credit and we have a low (7.99%) cc under her name that has about 7k out of 17k limit on it. The rest of the credit card debt is in my name and mostly on 0% offers until the end of the year. It's not a dire situation...yet. We don't miss any payments or anything. It's just been a rollercoaster because stuff just keeps popping up that has to be paid for. I'm always torn with building up a bigger and better emergency fund and paying down debt now. I can't seem to get any traction doing either so the situation just snowballs.

My current plan is to use my NFCU bt offers my wife and I get each year to keep most of the debt at 0%. Currently I have about 6k on an NFCU Flagship card at 16.99% and I don't cash advance it onto my wife's 7.99% NFCU platinum card because deep down, I just don't think we can avoid using it. If I could convince myself we won't need it or use it, I would do it and just use my Flagship card for the BT when that time comes around.

I know if I can get our spending under control and budget appropriately, we will make progress. I just happen to start reading about CareOne. I also read about antoher program but it was a .ORG instead of a .Com. Are their government road or government "Approved" DMPs? I really just don't know anything about them. I'd prefer to not mess with anything having to do with my wife's credit. Her father made a lot of great moves for her in regard to credit when she was young. 

[Shogun]

The minute I joined a DMP, all my cards were closed.  One posted that I was in a DMP and the others folded like a deck of cards.  I wound up paying everything and them some and then had a CR full of negative COs.

[JKSIMMONS]

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@Shogun wrote:

The minute I joined a DMP, all my cards were closed.  One posted that I was in a DMP and the others folded like a deck of cards.  I wound up paying everything and them some and then had a CR full of negative COs.

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Wow that seems crazy.  I think i'm just going to focus on getting my spending under control and utilize 0% offers. I can't believe DMP's are that shiesty. There is tons of positive stuff on them in the blogosphere. I'm glad I asked and I'm even happier you guys answer. Thanks a lot

[EW800]

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@JKSIMMONS wrote:

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Wow that seems crazy.  I think i'm just going to focus on getting my spending under control and utilize 0% offers. I can't believe DMP's are that shiesty. There is tons of positive stuff on them in the blogosphere. I'm glad I asked and I'm even happier you guys answer. Thanks a lot

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I know every situtation is different, however I just thought I would share that after hearing about so many horror stories about DMP's, I just did it on my own.  I did have to do a credit card settlement with one bank, however with all the others I just pur every dime I could every month into paying down balances.   For the most part, my wife and I were so committed to getting out of being owned by the credit card companies that we practically ate rice and beans for a year, so that we could put every dime toward the CC debt.  It was painful and did take a lot of focus and dsicipline, however we were able to get our UTIL down to about 3-5%.  In addition to how good it feels to have basically no credit card debt, we saw very nice jumps in our credit scores.  

If possible, I would say try hard to do it on your own by cutting out everything you can and using what you don't spend to bring down the CC debt.  

I am no expert in this area, but offering my two-cents.  

[JKSIMMONS]

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@EW800 wrote:

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@JKSIMMONS wrote:

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Wow that seems crazy.  I think i'm just going to focus on getting my spending under control and utilize 0% offers. I can't believe DMP's are that shiesty. There is tons of positive stuff on them in the blogosphere. I'm glad I asked and I'm even happier you guys answer. Thanks a lot

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I know every situtation is different, however I just thought I would share that after hearing about so many horror stories about DMP's, I just did it on my own.  I did have to do a credit card settlement with one bank, however with all the others I just pur every dime I could every month into paying down balances.   For the most part, my wife and I were so committed to getting out of being owned by the credit card companies that we practically ate rice and beans for a year, so that we could put every dime toward the CC debt.  It was painful and did take a lot of focus and dsicipline, however we were able to get our UTIL down to about 3-5%.  In addition to how good it feels to have basically no credit card debt, we saw very nice jumps in our credit scores.  

If possible, I would say try hard to do it on your own by cutting out everything you can and using what you don't spend to bring down the CC debt.  

I am no expert in this area, but offering my two-cents.  

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Thanks for sharing. That sounds like what i'm really going to try to focus on accomplishing. It's good to hear a success story.