Debt Management

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HI, I was wondering if you can help. I have a very poor credit score. Basically I got myself into a financial mess around 2 years ago and had to contact a debt management company. i am now on a debt management plan. At the time i wasn't on a good salary and had nowhere else to turn. However I am now earning double what i earned then and don't feel debt managment is the right way to go for me now as it is not improving my credit rating. I have never missed a payment with the Debt Management Company. They charge me £40.00 per month for using there service. I have 3 years left of the plan but i would prefer to clear my debtors by consolidating meaning my credit would be improved quicker. Does anyone have any advice if this is even possible to do?

Best Answer

Consolidating is a good idea. Most creditors (and their collection agencies) are willing to accept settlements, or a smaller portion of a debt that is owed. Here's one idea: Apply for a loan with a company like CitiFinancial (a lender with more lenient credit terms than most banks) and use the money to pay off the remaining debt. Then pay the loan off using the money you were sending to the debt management company. Your delinquent debts are paid and you're building credit history at the same time. Good luck! Note: Credit entries by creditors can be deleted once the debt is paid, IF YOU REQUEST IT. You don't have to let it sit on there for 7 years. Just remember to ask for a CBR delete and a settled in full letter once you pay the account off.

are these companys that take all your debts and put them into one easy payment any good, wot do they get out of it. do they cover court fines

Best Answer

Myth: The debt management companies on TV, like AmeriDebt, will save me. Truth: You may get out of debt...but only with your credit trashed. Debt management companies are springing up everywhere. These companies help "manage" your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they've often worked out lower payments and lower interest. This is not a loan as with debt consolidation. Sometimes people get the two confused. However, because Americans are up to their eyeballs in debt, the debt management business has become one of the fastest-growing industries today. Companies like AmeriDebt and Consurmer Credit Counseling Service can help you get better interest rates and lower payments, but at a price. When you use one of these companies and then try to get a Conventional, FHA, or VA loan, you will be treated the same as if you had filed Chapter 13 Bankruptcy. Mortgage underwriting guidelines for traditional mortgages will consider your credit trashed, so don't do it. Real debt help is found only in changing your behavior. In short, debt management companies are out. Hard work is in. Change your financial behavior and change your life...for good. True debt management is about one thing - you controlling your money.

I am enrolled in a debt management programs aka consolidating credit management. I make monthly payments and in 2 years should be debt free. My question is does this debt management progream affect my credit score? I been told if I make my payments on time after the 3rd payment my credit should go back up. I have my payments electronically debt for me so I dont see it. and wonder if anyone else use this type of program and if it did affect your credit ?

Best Answer

Generally if you needed to get on one of these programs your credit score/report was not that hot to begin with. So yes, it should improve your score but how much really depends on a lot of factors. If you were past due or in collections you will now become current with all of the companies. They will note that you are on a DMP on your report. However, while you are on it you should NOT be worrying about your credit score and try to take on any additional credit. You are trying to improve you situation and a DMP program is meant to help, not as a way to just improve your score to take on more debt. Once you have sucessfully completed it in 2 years you will be in much better shape than you are now.

Could some tell me of a good DM place to use, the net is full of sites and it's overwhelming. An honest one that has no horror stories attached to it. My CC bills are always paid on time but the rising interest payments are hurting me to the point in a few months they will be very hurtful. And yes there was a medical issue with my wife that started this neverending cycle of revolving debt. There has to be a few recommended places and places that people have used with success. I have a card that I got a pamphet in the mail that is raising my % to 32.99 because I am using over half the balance, never have been late and never overdrawn. I talked to the company and the women said it's like that because they can. Yes I know the DM will sting my CR, but.........what'll hurt it worse? Thanks. Not everyone in big CC debt are bad people, just sometimes unlucky. what company did you use and do you have any personal stories good or bad about them. I'm still weighing my options.

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I agree totally with you. Borderline entrapment if you ask me. For what it is worth this might help. There is a free download software look at my profile for the url finance. The software gives you a perspective of where you are with your debts and gives a strategy on how to clear them. Its shareware software that I used with some success. It just might help you.

Last year I had an accident and had to stop working since that Ive struggled to keep up on credit cards, 2 months ago I applied for debt management. The 1st months payment they keep as deposit and then the 2nd months payment is split between your creditors, 1 of the creditors has accepted the offer, but one of them wont leave me alone they are saying that I still owe this money whilst the debt management programme is being set up the problem is I have given all my money to this debt management company (DMC) that has told me they will call them and talk to them which I think they do. The problem is this company keep on sending me letters saying that I owe them this money and its got to a Credit Reference Agency. I have called my DMC who have said they are waiting for their first payment (due any day) then they will discuss future payments and that as long as Im making a payment I can afford theres nothing they can do is this true? Im being told one thing from DMC and another from Credit

Best Answer

Hi, these articles might help: Debt Consolidation - Get Out Of Debt http://www.askaquery.com/Answers/qn1643.html How to Hire a Debt Counselor? http://www.askaquery.com/Answers/qn1584.html What is Debt Relief? http://www.askaquery.com/Answers/qn1583.html Debt Management and Building Wealth http://www.askaquery.com/Answers/qn1581