Should I Use A Debt Management Plan?
Posted on
July 20, 2009
at
4:33 am
Will they help me or hurt me? Aside from debt management plans, what else can I use?
Posted on
July 20, 2009
at
4:54 am
It depends on your financial situation and also the agency. You might want to check their credibility and track record with the National Foundation for Credit Counseling (NFCC), or one of its affiliates, (CCCS) or Consumer Credit Counseling Services.Do you know how much you owe per credit card, car loan, etc.?
Posted on
July 20, 2009
at
4:57 am
Should you use a debt management plan?Are you still current with your monthly payments or you have fallen behind? I agree with x and y, calculate much it is that you owe right now.
Posted on
July 20, 2009
at
4:58 am
Isn't that the job of the credit counseling service?
Posted on
July 20, 2009
at
5:03 am
To answer The Question, yes credit counseling agencies do offer free individual financial assessments which usually leads to an enrollment in the Debt Management Plan...which I read has a lot of issues with the consumers because once they've enrolled in a debt management program, it can take a month or so before the creditors receive their first payment--which is bad for the credit score.
Posted on
July 20, 2009
at
5:26 am
I see..how long does it take? How much are they charging?
Posted on
July 20, 2009
at
5:31 am
The usual DMPs last for 5 years, you'd have to make monthly payments to the credit counseling agency that, in turn, disperses your payment to each creditors. You'd have credit counselor, the one who holds your account, and he/she will negotiate the interest rates of your cards, or attempt to lower them. One advantage of an enrollment in a DMP is the one simple monthly payment as opposed to several. The catch is that, a lot of creditors refuse to work with credit counseling agencies, and as a result-- you may end up paying a monthly fee to the agency but your debt remains the same.
Posted on
July 20, 2009
at
5:37 am
Just to add to the disadvantages of an enrollment in a DMP, It is for 5 years right? If you miss a payment, any payment, the agencies have the right to kick you out of the program. Why? Because a lot of these agencies are owned and funded by the creditors themselves. So should you use a debt management plan?Sure, if you have plenty of disposable income to last you for five years.
Posted on
July 20, 2009
at
5:42 am
To answer you other question, you can also try enrolling in a debt settlement program--that is if your unsecured debt is something like $10,000 and are already behind on your payments. Its difference with a debt management plan is the amount of debt- which is usually low amount and the payment status-which is current (with high interest rates).
Posted on
July 20, 2009
at
7:42 am
Right, and also the main difference is that a debt settlement company works to reduce the principle amoutn of debt that you owe, whereas credit counselors are trying to get the interest rates lowered. So, when asking should I use a debt management plan?- it is a must that you consider your circumstances and determine which service- counseling or settlement- you would benefit more from.
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