I am enrolled in a debt management program( consolidation) for about 2 years and i am thinking to cancel my subscription and make those payments directly to the banks instead of through this consolidation agency.
I wonder if the interest will go back high if I drop out of this program? I called a couple of credit card customer services and they said the interest wont increase unless I don’t pay on time. But also other credit card companies said that it most likely will go high, and that i should contact my debt counselor. MY counselor (consolidation program) told me that YES, interest will go back high once he advised my creditors that I dropped out of the program . Is this true? I think i am able to make my payments directly to my creditors and i can save 49 bucks that i am paying for this consolidation service.
This isn’t as clear cut as you hope it will be. The debt management or credit counseling group will tell you that your creditors will be notified and bad things will happen because they want to keep you in the program.
The reality is that as long as you are making the agreed upon monthly payment, most creditors will continue to honor the terms you have right now. But remember, working with or without an agency gives you about the same protections, none. Your current consolidation plan is not legally binding on the creditors and your creditors could change the rates at any time anyway. The credit counseling group has no power over that.
At this point, if you are getting value for the monthly fee you are paying, like good customer service from the debt management company, my gut reaction would be to not rock the boat if any of your creditors indicate that they will raise your interest rates back up.
Call all your creditors and ask them what their policy is and then decide what you want to do.