Debt Management Plan

[Anonymous]

I ended up working out arrangements with individual credit card companies instead of doing debt management. I talked to a debt management counselor, but actually made better arrangements on my own then the one offered to me by the debt management company. This was great for me because I don’t have to pay the monthly fee to debt management company, I was able to choose which cards I wanted to close, and my monthly payments are lower then what it would have been with debt management company. On top of that I got a raise at work and am slowly working to get out of the hole. If I stay on target I should have most of my credit card debt paid off in five years.

[sjt]

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@Anonymous wrote:
I ended up working out arrangements with individual credit card companies instead of doing debt management. I talked to a debt management counselor, but actually made better arrangements on my own then the one offered to me by the debt management company. This was great for me because I don’t have to pay the monthly fee to debt management company, I was able to choose which cards I wanted to close, and my monthly payments are lower then what it would have been with debt management company. On top of that I got a raise at work and am slowly working to get out of the hole. If I stay on target I should have most of my credit card debt paid off in five years.

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Congrats!
Time will fly and those debts will be paid off in no time. 

[Anonymous]

Be very, very careful with working with debt management companies or consolidation companies.  You could end up with a note on your tradelines indicating that you are under some type of debt management.

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@Anonymous wrote:

Hello,

I am recently seperated and havign a hard time mangaing my credit card debt with one income instead of two. I have over $40,000 in credit card debt and about half of the interest rates are over 20%. Right now, my monthly bills and credit card minimum payments are more than my income and I am sinking fast. Can anyone recommend a debt management program? I am going to need some assistance to get back on track and out of debt. Thank you. 

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This could be a serioius redflag to a lender, even though you are owning your situation and working to manage it.

[Anonymous]

None of my accounts have a notation stating DMP. Honestly, they are closed and I wouldn't be too bothered if there was a notation.

Ultimately, the goal is to have debt freedom and to stop drowning, so suddenly the score on how well you manage debt becomes silly (because you no longer are a fan of debt). There were two occasions in my DMP that made me nervous. Financing a car that was well over on miles from a lease (we were under-water with it regardless of if we kept it or not, which we needed to keep it) and moving to a new rental. Both went smoothly as my husband has a higher credit score, even though he has a few accounts in the DMP with me.

So, make sure you have a car and a place to live for the next 5 years, and then don't worry about financing anything else or be concerned with your credit score for literally the next 5 years. That is my opinion. You'll end up in a better position than most who never were in a DMP after the 5 years are up as you will be free of all unsecured debt.

[simplegirl]

Everyone situation is different and nothing is guarteened. My mom was in a DMP and it did nothing to help her after a year in a half and I got rid of about 7 accounts in 3 months all on my own.

[CreditJourney007]

I'll add my 2 cents. 

I was on a DMP because I had $45,000 in outstanding debt. Yup, 45K. 

I got a much better paying job, but interest was killing me. I got on a plan and paid it off within 3 years. In that time, I had to apply for Care Credit because my dog was in a life or death situation. I was also allowed to keep one credit card (AMEX) for an emergency.

My credit score went up 200 points and I was able to get Care Credit and another Amex, no problem. The most valuable part is it really taught me the addage "if you can't pay for it in cash, you can't pay for it". My CC util is about 8% for reporting and I PIF every month. I do not ever want to get into that situation again, ever. 

[sjt]

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@CreditJourney007 wrote:

I'll add my 2 cents. 

I was on a DMP because I had $45,000 in outstanding debt. Yup, 45K. 

I got a much better paying job, but interest was killing me. I got on a plan and paid it off within 3 years. In that time, I had to apply for Care Credit because my dog was in a life or death situation. I was also allowed to keep one credit card (AMEX) for an emergency.

My credit score went up 200 points and I was able to get Care Credit and another Amex, no problem. The most valuable part is it really taught me the addage "if you can't pay for it in cash, you can't pay for it". My CC util is about 8% for reporting and I PIF every month. I do not ever want to get into that situation again, ever. 

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Congrats on successful completion!

[CreditJourney007]

Thank you! It was a tough three years, especially since they really discourage applying for new debt (which makes sense!). So I went two years inadvertently gardening lol. They encourage you to build a savings acct in leiu of new credit, but as you can imagine, I was paying a lot per month to pay off my debt and it was hard to save, though I was able to save some money.

I could have done it myself, yes. But I had a lot of creditors (like 20 or so) and I was in a place where I just wanted to start it.

So I'm just saying different things for different folks The lessons as I said are the most important like build a savings and don't overspend!!!

[brooksbaby35]

wow so glad to see this post.  I am about to sign up with DMP this month.  I have a good job and my debt unsecured debt is about $30,000.  I hope to pay all debt off in 4 years.  Then I will be free!!   my problem was I had major surgery and was out of work for months which caused me to get behind on everything.  I am only keeping one card for emergencies.  Tough year but hopefully with this financial commitment i wll have my scores back up is a couple of years.

[sjt]

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@brooksbaby35 wrote:

wow so glad to see this post.  I am about to sign up with DMP this month.  I have a good job and my debt unsecured debt is about $30,000.  I hope to pay all debt off in 4 years.  Then I will be free!!   my problem was I had major surgery and was out of work for months which caused me to get behind on everything.  I am only keeping one card for emergencies.  Tough year but hopefully with this financial commitment i wll have my scores back up is a couple of years.

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Congrats on taking the first step. Keep us posted on your journey.