Chained to credit card debt!

[demi]

Its seems like I always chime in after Marty about DMP...we are on the same wavelength.  I also completed a DMP last fall, I had somewhere around 45,000 of CC debt.  Today I believe I could handle it without a DMP, but back then, no way.  Several of my friends at the time suggested BK...its something I never considered.  I owed those people that money, I felt I neede to pay it.  It was almost all spending on things I probably really didn't need, I was driving a 14 year old car, didn't really have much to show for the debt.  I might have considered a BK if it was caused by a job loss, disability or something else...but I strongly felt (and still do) that these people had a right to their money, they had extended credit to me in good faith (and a good interest rates LOL) and I needed to pay it back.  I did have a lot of medical expenses as well at the time (2 back surgeries, plus about 5 others in a 5 year period) but that is not why I was in trouble...actually that is what probably made me see the light.

Now, four years after starting the dmp, I have purchased my first home, have a few cards which I am managing responsibly, have a very nice car which I paid cash for, and have a lot less stress.

Message Edited by demi on 02-20-2009 09:48 AM

[Anonymous]

I am stressing with just paying off my credit cards, my car loan and an education loan for my son.  I don't know how I would of handled having a lot of credit card debt.  Mine is approximately 5,000, which is a lot to me,  that I am paying a little each month towards bringing them down.  I have realized though that it is a lot harder to get out of then to get into.  Could you tell me what DMP stands for.  I keep seeing people use that and have no idea what it stands for.  I give you a lot of credit for taking the hard way to pay your debts off.  I have been called by debt consolidators but I want to pay everything that I owe off and I know how to do it and therefore no  need to give anyone any more of my income.   I like the help that everyone gives you on this forum.  Boy would the credit card companies be crying if everyone decided to get there balances paid and not use them as much as they did. 

[Anonymous]

Sorry but I think I figured out what DMP stands for.  Could it be Debt Management Program.  Let me know if I am right and if I am wrong would like to find out what it stands for.  Thanks.

[demi]

Yes, its Debt Management Plan.  You will likely make a payment to them once a month, they will pay your creditors.  They work with them and reduce interest rates.  Be careful of people who are going to negotiate and lower the bills, they are not usually DMP's...and people have had lots of problems with them.  I used takechargeamerica.org.  They will make you do a budget, and will educate you along in the process.  When I joined, it was $50 setup, and $35 a month, which I looked at as better than a late payment !  I had no problems with them.  I had to give up all credit cards, some people here have been allowed under their plans to keep one or two.  I survived fine without them, only real problem I ever had was renting cars.

When I started they almost didn't accept me based on my initial guesses income vs debt...I believe the debt wasn't enough vs my income....but when we literally wrote it down, figured all the other bills I had (including medical) I was accepted.  I only mention this because they or someone else could possibly tell you that $5000 may substantial enough to deal with.  I would also suggest that you look at other suggestions on the forum for doing it on your own, calling about lowering rates, etc. 

Message Edited by demi on 02-20-2009 01:45 PM

[Anonymous]

Thanks for the information.  I am going to try doing this on my own.  I have been able to handle it so far but my problem has been that for the next 3 months I am paying for my son's college expenses until he graduates the end of April.  I have made it this far and I think I could get through the next 2 months, just getting anxious and want to get my credit cards paid off.  I am paying a little above the minimums and I do know that I can get it done on my own so that is what I am going to do.  I set a plan and figure that it should not take me more then 6 months so I should be done by September or October which is probably quicker then a Debt Management Plan would be able to accomplish it.  It is interesting all the different things I have learned on the forum.  Thanks for your help. 

[marty56]

I would still use the debt snowball approach where you pay minimum on all but the CC with the lowest balance and attack that one until PIF and then go on to the next.  The reason was as I started to see CCs being paid off, I got an emotional boost which got stronger as each CC was PIF in turn.