A Facebook friend brought Mpowered to my attention and asked me about them. Mpowered was formerly Community Credit Counseling Services and is located in Colorado.
The person wanted to know what I thought of their program. Since I have no personal knowledge about the solutions they offer I had to go to their website and rely on what they have to say.
Mpowered promotes themselves as “Your Personal Finance Experts” but they also appear to have a bias towards those programs they offer and not a fair and balanced approach to educating consumers.
Keeping in mind the major ways to intervene with debt are bankruptcy, debt consolidation loans, debt settlement and credit counseling, it looks like the Mpowered site directs people more towards their debt management plan which generates money for them.
So let’s just look at one page and talk about that one. What you see below is their page on their Debt Management Program (DMP).
Over on the right side you will see a scare message about debt settlement and nothing about the benefits of bankruptcy or a debt consolidation loan.
So let’s run down the list and see if the claims made are true.
The debt management plan can lower your interest rates. But what they don’t mention is that in bankruptcy all the interest is eliminated and your debts can be completely eliminated in about 90 days and not the three to five years they claim for their DMP.
In a chapter 7 bankruptcy there are no monthly payments. In a chapter 13 bankruptcy your payments are based on what you can afford. In a DMP the payments are based on what the creditors require and not what you can reasonably afford.
The program helps you to avoid bankruptcy, but what if bankruptcy is really best for you? See The Hidden Cost of Credit Counseling to find out why delaying debt elimination can cost you millions of dollars in retirement.
They claim the DMP can prevent judgments and garnishments but not all creditors participate and those that don’t can still sue you and get a judgment and garnishment.
Keep your credit record and credit score strong they say but they seem to gloss over why it can have an impact on your credit score. See Why Enrolling in a Credit Counseling Program Can Hurt Your Credit Score.
The Debt Settlement Scare
And then all of the other things they say about debt settlement are not true for people who are appropriate for debt settlement. For those that have cash on hand to settle now and can’t discharge their debts under a chapter 7 bankruptcy, there would not be hefty upfront fees, legal action by creditors, tax obligations (not for many), and certainly not “bigger, more problematic debt.”
So is it fair for Mpowered to say they are “personal finance experts” when they clearly appear to steer consumers in one direction, avoid others, and make misleading statements about debt settlement?
Their claim is they:
“At mpowered, we take a holistic approach to your financial well-being. We take the time to meet one-on-one with you to look at the complete picture of your personal financial situation. We provide you with the customized education, tools & resources you need to reach the next stage of your financial journey.” – Source
What do you think?
If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.Nonprofit Mpowered Appears to Mislead Consumers by Steve Rhode