Makes no sense to me

[Shoebox]

Still trying to come to grips with this very confusing world of credit and rebuilding my "good name". One thing I find very confusing and, I have to say, frustrating, is this: I've been enrolled for two years in a DMP to dig myself out of massive CC debt my wife and I incurred when she lost her job. Still over 2 years of austerity to go. It hasn't been fun, but I figure it's the price I have to pay for stupid mistakes. Of course, some of the requirements for entering a DMP are credit-busters: closing of accounts, no new credit until the DMP is completed, etc. My FICO score is about 682, not that great and it hasn't moved in about a year. What irks me is that I read stories in the "Bankruptcy" section of these forums of people who enter BK, then when they're discharged after less than a year, immediately are getting credit offers, higher scores, etc. some of these folks have scores in the 700's after less time than I have. How is that fair? I'm trying my best to pay off these creditors at rates that are still making them money, but it seems as though I'm penalized more than someone who pays pennies on the dollar for a BK. Am I missing something here?

Sorry for the rant. Like I said, I'm a newbie, so still learning.  Can anyone help bring my bloodpressure back to earth ?

[StartingOver10]

A DMP is just like a bankruptcy Ch 13 without all the legal protection you get when you file a BK.

So, I know you feel since you voluntarily entered into a settlement program that the credit restrictions ought to be more generous. However, it is very similar in that you are making payments to a third party in exchange for either an interest rate reduction or balance reduction or both. A person in a Ch 13 can't obtain new credit during their 13 without trustee approval (car/house). You can't get new credit because there is no trustee oversight.  The creditor actually has more protections when the debtor has the legal protections in place through bankruptcy. Since you are only in this program on a voluntary basis, you can fail to complete it at any time and there is no protection for the existing creditor that signed off on your agreement (other than taking you to court). A new creditor is not going to get involved until you demonstrate the ability to repay. Just like a person in a Ch 13 has to demonstrate that exact same thing before new credit is granted.

Not all DMP programs end well. Some of them are decent programs but most are designed to keep your credit in this limbo stage until you are completely and totally paid off and finished with the DMP program.

[Shoebox]

Thanks for putting my situation in perspective, and you make very valid points. It still makes no sense to me that a chapter 7, for instance, seems more quickly absolved than someone legitimately trying to make amends and pay everything back with interest. This whole world of credit is like Upside Down World to me - you can't get credit without credit, your scores go down if you don't use credit, go up if you do - but not too much, must keep balances on your cards but not too much. The rules are all twisted and definitely NOT in the consumers favor. Shocker, I know.

By the way, the DMP I'm in is very above-board and there have been no hiccups in the process since I started (knock on wood). They were able to substantially lower interest on most of my debts, which I'm thankful for. Whether I should ever have entered into it knowing what I do know is another question.

Thanks again for your thoughts...