topic Re: Debt management program HELP in Rebuilding Your Credit

Debt management program HELP

Anonymous — Wed, 28 May 2008 14:49:22 GMT

I am so confused about credit counseling and debt management; I am currently not late on any bills but quickly approaching the time when I cannot keep up. My husband left his job about 3 years ago to take care of his invalid father; I had a well paying job at the time and we (foolishly) thought we would be fine and my husband would be able to reenter the workforce easily. I was traveling for work and looked for a stay-in-town position; I found what looked like a great job, full of promises .. short on reality and in the end it was a $30,000/year pay cut for me. And my husband took a year to find a job and is paid less than when he left the work force. All lessons learned.. but, need to move forward. Refinancing is probably not an option as housing prices have gone down, etc.

From what I have read the credit counseling and debt management programs range from good to rip-off.. If I am reading things correctly.. I should look for a member of NFCC .. PLEASE I NEED ADVICE AND INFORMATION I am scared to death.

Re: Debt management program HELP

fishbjc — Wed, 28 May 2008 14:51:06 GMT

I understand your fright. The program I used has been excellent. I've send you a pm with the information.

Welcome to the boards.

Re: Debt management program HELP

Anonymous — Thu, 29 May 2008 23:24:26 GMT

Hello,

What Debt mgmt program did you use. I also have not made any late payments but I am 70,000 in debt. I still have good credit 740 fico and I don;t want it to change but I am looking to consolidate. Let me know if you tried any of them...

Thanks so much.

Re: Debt management program HELP

Anonymous — Fri, 10 Oct 2008 01:52:15 GMT

Hi, I'm looking for a debt management program. Can someone share with me which one they have used? Thanks

Re: Debt management program HELP

Anonymous — Fri, 10 Oct 2008 02:36:38 GMT

Be very very very VERY (I must emphasize) VERY careful when going through a debt management program. I was forced into one back in 1998 as it was required due to my clearance regardless of my ability to repay my debts without it.

I was young and stupid and all heard them say was

"Don't worry it will lower your monthly payments, when you add up all your bills you are currently paying X Amount of dollars and with the program you will only pay x amount of dollars and all of you late accounts will be brought current."

Sounds great right?!?!?!?!? Let's all sign up!

Not so much. This "Not for profit" company tacked on a pretty hefty fee. I would send them the money required to pay my new "minimum" payment to each creditor plus a little extra to cover their fee, they would then take their GINORMOUS fee off the top divide the rest among the creditors and VOILA! I got an over the limit fee PLUS a late payment fee (they paid all of my bills on the same day of the month regardless of what day it was due) which in turn caused the creditors to increase my APRS which just compounded the over the limit problem. A horrible vicious cycle was born.

*I was living overseas at the time and the statements were going to my moms house. The payments were autodrafted from my check so neither myself or my mother had any reason to believe there was a problem

By the end of 2 years I was in almost 3 times as much debt as I was to start with without ever using credit card or opening any new accounts. Like I said YOUNG and STUPID.

My very serious point is that there are BAD companies that disguise themselves as helpful friendly Debt Management companies. If you really do need debt management assistance do ALOT of research before hand. Check the BBB, Ripoffreport.c , consumer reports, ask your bank or credit union if they know of any, and when you choose one make sure you read EVERY WORD of the contract. I missed the part about the fee because it said "a small percent of your total debt". Well... a small percent of ALOT of debt is a BIG number.

Re: Debt management program HELP

Junejer — Fri, 10 Oct 2008 04:39:18 GMT

Yup. Same thing happened to my aunt and a former co-worker on a DMP.

AmyBoo wrote:

Be very very very VERY (I must emphasize) VERY careful when going through a debt management program. I was forced into one back in 1998 as it was required due to my clearance regardless of my ability to repay my debts without it.

I was young and stupid and all heard them say was

"Don't worry it will lower your monthly payments, when you add up all your bills you are currently paying X Amount of dollars and with the program you will only pay x amount of dollars and all of you late accounts will be brought current."

Sounds great right?!?!?!?!? Let's all sign up!

Not so much. This "Not for profit" company tacked on a pretty hefty fee. I would send them the money required to pay my new "minimum" payment to each creditor plus a little extra to cover their fee, they would then take their GINORMOUS fee off the top divide the rest among the creditors and VOILA! I got an over the limit fee PLUS a late payment fee (they paid all of my bills on the same day of the month regardless of what day it was due) which in turn caused the creditors to increase my APRS which just compounded the over the limit problem. A horrible vicious cycle was born.

*I was living overseas at the time and the statements were going to my moms house. The payments were autodrafted from my check so neither myself or my mother had any reason to believe there was a problem

By the end of 2 years I was in almost 3 times as much debt as I was to start with without ever using credit card or opening any new accounts. Like I said YOUNG and STUPID.

My very serious point is that there are BAD companies that disguise themselves as helpful friendly Debt Management companies. If you really do need debt management assistance do ALOT of research before hand. Check the BBB, Ripoffreport.c , consumer reports, ask your bank or credit union if they know of any, and when you choose one make sure you read EVERY WORD of the contract. I missed the part about the fee because it said "a small percent of your total debt". Well... a small percent of ALOT of debt is a BIG number.

Re: Debt management program HELP

RobertEG — Fri, 10 Oct 2008 09:38:07 GMT

Their selling point is always reduced initial monthly payments.

Reduced payments that are not in access of monthly debt owed do not reduce principal balance owed, and thus also always result in an increase in principal/debt, and thus further compounding of the debt.

As my grandfather once told me, if they offer you a miracle cure for your old malady, then it will be at the hidden expense of their newly-inflicted malady.

Re: Debt management program HELP

Anonymous — Fri, 10 Oct 2008 10:33:08 GMT

@RobertEG wrote:
Their selling point is always reduced initial monthly payments.
Reduced payments that are not in access of monthly debt owed do not reduce principal balance owed, and thus also always result in an increase in principal/debt, and thus further compounding of the debt.
As my grandfather once told me, if they offer you a miracle cure for your old malady, then it will be at the hidden expense of their newly-inflicted malady.

Yep! I just heard an advertisement on the radio saying they will reduce your payments to principal. Ummm ... why the heck would you want that?!

Be very, very careful!

Re: Debt management program HELP

haulingthescoreup — Fri, 10 Oct 2008 12:02:19 GMT

Be sure that you understand the difference between debt management plans and debt negotiation programs. The terms blur, and sometimes you'll see DNP's calling themselves DMP's.

There are good DMP's and bad ones. We've had several members use DMP's successfully, but you have to get the right ones.

Here's some more info from the Federal Trade Commission:

Knee Deep in Debt