topic Re: debt management programs in General Credit Topics

debt management programs

Anonymous — Thu, 30 Aug 2007 19:14:21 GMT

Due to medical reasons,I might have to enter into a debt management program. I was told by the debt management company that my score would not be affected by entering into such a program. Any information would be appreciated.

Re: debt management programs

Anonymous — Thu, 30 Aug 2007 20:11:50 GMT

This, from www.bankrate.com:

Signing on for a debt-management plan may give you more breathing room in your monthly budget, but will it hurt your credit? Not as much as you may think.

Using a debt-management plan to pay off debt won't hurt your credit score, but it may make it difficult to qualify for new credit.

Re: debt management programs

Anonymous — Thu, 30 Aug 2007 20:23:56 GMT

Be careful with these programs, I'm not speaking from experience but only from what I have read on this forum, some debt management programs are scams and can hurt more than help. Make sure you do your research on the company before letting them handle your debts.

Re: debt management programs

Tuscani — Thu, 30 Aug 2007 20:29:54 GMT

http://www.nfcc.org/

Re: debt management programs

sl — Thu, 30 Aug 2007 20:44:05 GMT

I just finished a DMP and had good luck with it. The only cc that showed I was in a dmp was AMEX and it took a good 6-8 months to get that off my cr.

If you are serious about going into, send me a PM and I will give you the name of the one I used and a good contact.

Re: debt management programs

Anonymous — Fri, 31 Aug 2007 18:49:26 GMT

I just finished my DMP with CareOne (http://careonecredit.com/) and they were awesome. This didn't hurt my score at all - only helped it. It helped me to be responsible and monitor and repair my credit. Also, nothing showed up on my report because of it!

Re: debt management programs

Anonymous — Fri, 31 Aug 2007 19:47:37 GMT

jessicaldale wrote:
I just finished my DMP with CareOne (http://careonecredit.com/) and they were awesome. This didn't hurt my score at all - only helped it. It helped me to be responsible and monitor and repair my credit. Also, nothing showed up on my report because of it!

Jessica-

May I ask what they charged you? And were you forced to close your cc accounts?

Thanks!

Tex

Re: debt management programs

Anonymous — Fri, 31 Aug 2007 20:14:53 GMT

you use debt management programs and some ( shady ones ) can ruin your credit. Be careful selecting them. Get references and use national companies.

good luck.

Re: debt management programs

Anonymous — Fri, 31 Aug 2007 20:41:40 GMT

I have been on a DMP now for about 8 or 9 months. I am having good results.

Be careful who you decide to go with. Some of them ARE scams. Call around several places and see what they think they can do for you. AND check with www.ripoffreport.com or The Better Business Bureau before you sign up.

As for a DMP ruining your score? If you already have several lates and your score is already slipping. It probably it can't hurt more than what you have now.

It depends on each individual credit card company what they do when you are on the DMP.

When you sign up with a DMP. Some of the card companies want to make sure you are sincere making your payments. When you first start the program they will report you late until they receive three consecutive payments from you. After the 3rd payment they will usually readjust and make your late status current. Some card companies will even go back and erase those three late payments from your credit report after they receive the 3rd payment. Some won't.

If you have an account from a card company that won't erase the late payments then your score can be impacted. That is the only time your score can suffer from a DMP.

My score took a quick drop when I started the program (upper 400's) then after the 4th month my score quickly jumped to the mid 500's.

A DMP isn't for everyone. A good DMP organization should have a lengthy discussion with you on your budget, your bills, and see if you are fit for the program. You should not be enrolled in a DMP if you have sufficient income to pay the debts off yourself. And you should not be enrolled in a program if you can't afford the DMP payment. A lot of DMP programs are accepting everyone that calls them up. If you want to e-mail me. I can give you some contact information which DMP program I am on.

Message Edited by Pants on 08-31-2007 04:41 PM

Re: debt management programs

sl — Fri, 31 Aug 2007 20:41:53 GMT

I used Debt Guru and they are based in Utah. I paid $30.00 month for 4 accounts and the accounts had to be closed when entering it. However, you can keep the cards open you do not put in DMP. They advise to leave a cc out for emergency purposes.

Google them and read more. I was very impressed with them and never paid late and always took my calls when I called in.

Re: debt management programs

Anonymous — Wed, 26 Sep 2007 03:40:38 GMT

hi,could you please tell me who you used. I signed up with credit solutions and am getting nervous about it

Re: debt management programs

Anonymous — Wed, 26 Sep 2007 03:54:27 GMT

are they really good. read your comment and you sound positive

I need help and am very nervous about it. Do you have any advise

Re: debt management programs

Anonymous — Wed, 26 Sep 2007 17:16:44 GMT

Sorry about my delayed respose - I paid a $50 donation that was calculated into my monthly payement.

Re: debt management programs

Anonymous — Mon, 24 Dec 2007 04:32:40 GMT

Tuscani, I have seen you recommend NFCC as a good debt management service but you also said this could be done on your own? Now, the reason I would do it is so I can get lower rates and thus have more monthly cash flow. Ive tried to negotiate with all myself and Ive gotten somewhere but two cards that have the majority of money owed are in the upper 20s for interest rates. If the credit cards wont do it for me, why would they for them? Am I saying the right things? Like should I ask to do a dmp to a credit card? Any help is appreciated. Thanks and Happy Holiday, Robert

Re: debt management programs

fishbjc — Mon, 24 Dec 2007 15:11:22 GMT

My dmp reduced my interest to 4% on BofA Cc and 13% on my signature loan. I pay $15 per month maintenance and donated $30 for the initial paperwork.

Since my DMP was recommended by BofA, the relationship was excellent. I have it set up to pay a few $$$ extra each month and have brought my balances way down. I intend to be out of the program in one year.

I paid off a couple of other cards on my own very quickly.

I have had excellent results and mine report to the BBB. I hit a snag and it was all rectified. One thing I will recommend is: talk to your counselor, not to whomever answers the phone if you have any issues.

PM me and I'll, as well, pass along this information to you.

Re: debt management programs

Anonymous — Mon, 24 Dec 2007 15:47:06 GMT

I used ACCC (http://consumercredit.com) and they were good but if I had to do it all over again I would not go through a DMP. The reason being because I had to close all 4 of my credit cards. They did let me keep one open for emergencies. Another thing I did not like is they charge you a finance charge of $3 per account in the program and some banks put negative remarks in your credit report that say "managed by a DMP" which when a lender reviews it looks bad if you are trying to get a loan for a car or home. Chase was great, the two credit cards I had with them they lower the rates from the 20's to 6% and no negative comments. Us bank and citibank credit cards put the negative comments and had higher rates. The negative commends do go away once you paid the cards in full. My strategy was to pay the cards with the negative remarks first and then the other ones. If I had to do it again I would talk on the phone with the credit card companies and try to get the rates reduced. I didnt like having to pay ACCC $12 a month to manage these accounts for me.

Re: debt management programs

Anonymous — Mon, 24 Dec 2007 17:32:04 GMT

Check the United way in your area. They generally have low cost DM programs and you can bet that they are legit.

Re: debt management programs

Junejer — Thu, 27 Dec 2007 04:32:57 GMT

@Anonymous wrote:
Due to medical reasons,I might have to enter into a debt management program. I was told by the debt management company that my score would not be affected by entering into such a program. Any information would be appreciated.

I am not speaking from personal experience, but from my Aunt's experience. She was on a DMP, because she co-signed a car loan for her son and he lost his job. When they came after her, she was advised by the atty to get with a DMP. Since she was going into the DMP, she threw in another small bill $1,000. Being on the DMP did an injustice to her FICOs for the time that she was in the program, keeping her scores in the 500s. As time has gone on her scores have increased. Here is the kicker. I was shopping around for a HELOC for her recently and she was denied by a HELOC provider, because she was in the DMP four years ago. Her middle scores were as follows 659 667 682. This is the first time that she has been denied because of the DMP to my knowledge. I hope that this is not a trend and maybe just due to the banks being a little gun shy right now.

Re: debt management programs

haulingthescoreup — Thu, 27 Dec 2007 04:52:57 GMT

@Junejer wrote:

@Anonymous wrote:
Due to medical reasons,I might have to enter into a debt management program. I was told by the debt management company that my score would not be affected by entering into such a program. Any information would be appreciated.
I am not speaking from personal experience, but from my Aunt's experience. She was on a DMP, because she co-signed a car loan for her son and he lost his job. When they came after her, she was advised by the atty to get with a DMP. Since she was going into the DMP, she threw in another small bill $1,000. Being on the DMP did an injustice to her FICOs for the time that she was in the program, keeping her scores in the 500s. As time has gone on her scores have increased. Here is the kicker. I was shopping around for a HELOC for her recently and she was denied by a HELOC provider, because she was in the DMP four years ago. Her middle scores were as follows 659 667 682. This is the first time that she has been denied because of the DMP to my knowledge. I hope that this is not a trend and maybe just due to the banks being a little gun shy right now.

An additional thing to think about --a worrisome number of DMP's make their payments late, so that you wind up accumulating more late payments on your credit history. There are good programs out there, but there are many, many bad ones.

If you're willing to read through these forums, post your reports and scores, and listen to the feedback here, you can probably do just as well for yourself. And along the way, you will gain understanding of how credit works, especially in your life, and save yourself some $$$ in the process.

Re: debt management programs

marty56 — Thu, 27 Dec 2007 12:39:16 GMT

I graduated from http://www.40debts.com/counseling/default.asp (Debt Free Christian)

There were great. A few points:

1. You need to monitor your CC balances and payments. Be proactive. Don't assume the people at the DMP will do anything more for you then make the payments.

2. Twice in the 4.5 years I was in the program I had to pay Discover since the payment was not paid when Discover wanted it. The other CCC didnt care about that as long as it was paid around the due date

3. Do not seek new credit (except a mortgage?) while you are in the DMP. BofA dropped me from the program for a Sams card they didnt seem to care about the mortgage I got. They added me again after several months of 60+ lates due to the fact the DMP was paying less then they now wanted.

4. The DMP doesn't make payments to optimize your FICO score but if you have extra money, you can pay the CCC yourself. Make sure if you are close to paying it off that you let the DMP know about the new balance. After you pay it of course.

5, I never had this problem but assume that a late payment or a NSF is fatal to the program.

6 I never did but you should monitor your FICO scores while you are in the program. I didnt but I suspect that my scores didnt improve till 2 or 3 years into the program.

I do not know if CCC blacklist people who were on the DMP after the account is closed but I was able to get a pre-approval from National City Visa card after I graduated the DMP so there is life after the DMP.

A byproduct of being in the DMP was that I had to make a monthly budget which I still use today. I cannot even begin to describe the feeling I had when I made my last payment to them.