Debt Management Plan

Submitted by Anonymous (not verified) on Tue, 08/17/2010 - 05:04
Forums
Credit repair

Hi all,

I tried to get the interest rate lowered on one of my credit cards today and got rejected. It's a visa card with 21.99% APR.

I am considering signing up for a Debt Management Plan with a local company in Tucson, AZ. The total fees for the plan would be $3575 if I pay them at the time I sign up. My total credit card debt is 55,000 between my wife and I. The DMP company told that it would take atleast 27 years to pay off my debt if i make minimum payments each month. However, if I do the plan with them it will take me 4 years to pay off the debt.

Anyone have any advise? Should I go for the DMP?

Aaron

Hi Mael,

Before signing up for the Debt Management Plan (DMP) you should check if the company is an authentic one. Check if the company has a website, and if it's accredited with the Better Business Bureau. Don't go for the company charging an upfront fee more than $50.

Also check if the company is accredited with the American Association of Debt Management Organizations. Get all kinds of agreements in writing.

When you are making your payments through a DMP, this will get reported. However, this won't hurt your credit score.

Thanks,

Aaron

Tue, 08/17/2010 - 07:41 Permalink
Aaron

Hi teal,

Debt management really helps. It is one of the most important aspects to keep your debts in control. However, before going to a company for help you yourself can try managing your debts.

Thanks,

Aaron

Wed, 08/18/2010 - 07:01 Permalink
ensurepune

Anyone have any advise? Should I go for the DMP?

You should consult only local DMP and the most important thing is you should always insist on the receipt of the service so you will be some evidences that you have availed their facilities but keep in mind that always ask them their promises in written format so that you won't be cheated afterwords.

Ensure

Wed, 08/18/2010 - 07:11 Permalink
Aaron

Yes, it is very true ensurepune. This is true not only for DMP but for any other services with a company, and any agreements with creditors and collection agencies.

Thanks,

Aaron

Wed, 08/18/2010 - 07:55 Permalink
therenow (not verified)

Mael,

A real non-profit debt management company does not charge any fees upfront. Please do not pay anyone. I am currently using MMI a non-profit debt managment company my DMP includes $40.00 for them per month that is it. Please do some more research before you sing with anyone. I get a loggin to their website and I can see my progress daily.

Wed, 08/25/2010 - 17:30 Permalink
Fishman

Hello Mael,

All the information you have received so far is all very good advice. As a general rule of thumb, research any organization through the Better Business Bureau to make sure they are accredited, check out their ratings, also any complaints.

A good organization will review your budget with you as well as assess your unsecured debt. A good organization will not try to force a square peg into a round hole in order to get your business. A good non-profit organization will look to provide free information and helpful suggestions whether or not they are able to enroll someone for a debt management plan.

Also as previously mentioned, be careful of the fees. Some places will charge a blanket amount for a fee regardless of how much or how little the debt may be.

Hope this information is helpful. Feel free to ask more questions as they arise.

Wed, 08/25/2010 - 21:16 Permalink
tracy (not verified)

You can arrange a DMP yourself but a third party can also arrange this on your behalf if you are not able to. Many companies provide debt management plans as a service but most will charge a fee.
But, there are a number of organizations including ourselves, who can provide a debt management plan free of charge.

Fri, 08/27/2010 - 09:32 Permalink