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Is Debt Management or Credit Counseling the Best Solution for Me? – Trisha

I make approximately $65000 a year but owe $30000 in unsecured debt in addition to student loans, a mortgage (that just went up by $500 due to escrow issues) and a car note. As a side note both the house and car have negative equity.

With the increase in my mortgage I am struggling to stay afloat and my credit card payments are being juggled. Because I am over extended my credit score is in the mid 500 range and no matter what I do I can’t seem to get ahead (all of the credit cards have interest rates of 27% or higher so the payments seem to have no real impact).

I have no savings and live paycheck to paycheck. I’m not too keen on the idea of bankruptcy, mostly because I made this mess, not the economy, not a loss of employment, no life changing tragedy…just my own lack of restraint and good judgement.

I want to dig out of this and am willing to make all of the necessary changes to my lifestyle but need direction. I was referred to MMI by a creditor but want to be sure that they are the right path for me. What are my other options and what would you recommend?

Is debt management the best solution for me? What other options are there?

Thanks,

Trisha

I’m currently backed-up on answering questions so I’m posting some of the questions here for you to help answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Anonymous

    Trisha,

    Credit counseling (defined as the review of budget/credit/debt/options by trained/certified/experienced counselor with proper tools) is a wise choice to consider, but no one can know whether a Debt Management Program is a good solution without reviewing more details specific details of your situation. Of course, debt settlement or bankruptcy might be an option.

    Since you mention an increase in mortgage, you should seriously consider speaking with a HUD certified/approved non profit agency to review your situation and determine if you can obtain a loan modification. Do not pay for this service – it is free at any HUD counseling agency. Consider one that is in your state, as there could be a few options that depend on your state of residence. 

    Usually the counselors that handle housing counseling are very experienced with debt solution options.

    HUD agencies can be found here: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

  • KPP

    Trisha,

    Credit counseling (defined as the review of budget/credit/debt/options by trained/certified/experienced counselor with proper tools) is a wise choice to consider, but no one can know whether a Debt Management Program is a good solution without reviewing more details specific details of your situation. Of course, debt settlement or bankruptcy might be an option.

    Since you mention an increase in mortgage, you should seriously consider speaking with a HUD certified/approved non profit agency to review your situation and determine if you can obtain a loan modification. Do not pay for this service – it is free at any HUD counseling agency. Consider one that is in your state, as there could be a few options that depend on your state of residence. 

    Usually the counselors that handle housing counseling are very experienced with debt solution options.

    HUD agencies can be found here: http://www.hud.gov/offices/hsg

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