My wife and I have been in credit counseling for awhile and seem to be making little progress. Recentlywe have been checking out NO MORE MORTAGE AND AFTER JUST TALKING TO THEM WE HAVE SECURED DEBT OF 175,000 AND UNSECURED DEBT OF 70,000,AND DESPERATELY NEED HELP AND ADVICE ON OUR NEXT MOVE.
PLEASE GIVE US YOUR OPINION ON NO MORE MORTAGE AND WHAT WE CAN DO OR WHOM WE CAN CONTACT FOR HELP,HELP HELP!
I assume the company you are talking about, No More Mortgage is the company located online here.
First, I’ve got to tell you how irritating it is to me when companies proclaim there is some secret or magic way to break out of debt.
There is not one thing new about this approach. It is a basic debt elimination strategy that I first started using in 1994. How much did they want to charge you for this program?
Here is one of their radio ads.
Maybe I’m just in a bad mood right now but if you are paying $1 for this service you are really getting screwed. This is nothing more than a a program to pay your debts off early using a modified debt snowball process. You either elect to make payments bi-weekly or add an additional amount on top of what you are already paying each month. This No More Mortgage program does not reduce your minimum monthly payments expected by the creditors.
But I bet they are going to charge you a pretty penny for this service to help pay for all the radio and television ads they have available.
So you want to know the secret behind this? I’ll tell you. The way you reduce the amount of time it takes to get out of debt and the massive amount of debt is simply by paying your debt back early. By adding extra money to your monthly debts payments and paying off your debts from highest interest rates to lowest you will easily accomplish this. The trick behind the bi-weekly approach is that you wind up making one extra monthly payment to all your debts each year than paying them monthly. In a given year there are 12 months but 13 bi-weekly periods.
What sinks these plans is not the administration of them, but the adding of debt to the current accounts or taking out new credit.
If you want to do this plan yourself you can follow the debt snowball approach ad setup the payments using your online banking recurring option. When the first debt is paid off, reset the online bank payment instructions and so on.
This program has two additional basic problems. If they are going to debit your account and take the money out of it and then pay it to your creditors according to the plan calculated they run afoul of many different state laws as a consolidator. Depending on how long they are holding your money you are letting them use it for free. If what they do instead is prints drafts on your behalf and send them to your creditors you then create a situation where you might easily bounce checks since you have limited control over them or may forget the timing of the checks.
Bottom line: It’s easy, the service appears problematic, you can easily do this yourself and save a ton.
Oh yes, if you bail from the credit counseling program you could lose your special interest rates and/or not be let back into the program again if you have already enrolled in a debt management program twice in five years.
You might just want to consider staying in the debt management program but adding a couple of hundred dollars to your minimum payment you are sending and it will reduce your debt faster.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.