Subscribe to our mailing list

X

Are Debt Management Programs For Real? – Kim

By on January 6, 2010
Are Debt Management Programs For Real? – Kim

“Dear Steve,

I am in over my head and I really don’t have a clue if I can ever get out of debt. I have six credit cards, most of which i have closed.

I currently am making minimum payments on my credit cards (6) and the loan I took out from Bank of America. Totally I owe 30,000 with varying rates from 17 to 21. I can make the minimum payments but things are starting to get tighter and I am concerned that if they raise my apr I will not be able to make the payments. Last month I got 7 letters from Bank of america cancelling my account (did me a favor) changing me from fixed rate to variable rate and then back again. They also sent me a letter saying if I was having prob lems they had a list of dmp that they could put me in touch with.

Are debt management programs for real because when I mentioned it to the guy at Capital one he gave me the impression that I would be taken to court if I tried to do this. Would they really take you to court even though your working with a debt management program.

Thanks

Kim”

Dear Kim,

Debt Management Programs (DMPs) are for real and legal but they have no power of law behind them, give you no consumer protection, they are not binding on the creditor and give you no rights. They are a voluntary program put in place by the creditors in an attempt to recover money from you. And they are not very effective. See, The Truth About The Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

The largest problem with a DMP in your situation is in a DMP your monthly payment is just about the same as the minimum payment not in a DMP. So if it won’t reduce your total monthly payments significantly then how would it benefit you? It doesn’t really matter than some of the interest rates would be reduced if the payment is not manageable or sustainable over a five year period.

READ  Bankruptcy Job Opening - Attorney- Bankruptcy - Bank of America

If you were working with a Debt Management Program it is highly unlikely that Capital One would take you to court as long as you are making either the contractual minimum payment required by Capital One or agreed to by Capital One with the DMP provider.

If you want to try to get some interest relief and lower your over all payment the first step would be to explore the peer-to-peer lending network, LendingCLub. You may be eligible for a lower rate debt consolidation loan for up to $25,000 of your debt from LendingClub.com.

Outside of that, the only way to get your interest rates to 0% and repay what you can reasonably afford is in a Chapter 13 bankruptcy plan.

Unfortunately you are right where the creditors want you, heavily in debt, stuck on their cards, and with few options.

morehelp1 Choice1 Choice2 Choice3 Big Hug!
Get Out of Debt Guy - Twitter , G+ , Facebook
If you have a credit or debt question you'd like to ask just use the online form .

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s Privacy Policy and Terms of Use and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About 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.

Share a Comment / Leave a Reply

%d bloggers like this: