I Am in a Debt Management Plan With Only $100 a Month to Spare. – Lynn

“Dear Steve,

I have about 24000 in debt credit cards and loans. I was in a debt management plan about 5 months ago with a local company. I was off of work for a sort time. What I currently pay out now i have about $100 left each month to live on.

If I decide to go with another company can I trust CCCS, will the creditors allow me into another program.

Thank you


Dear Lynn,

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If a creditor will let you back in to a program with Consumer Credit Counseling Service (CCCS) is really up to a matter of creditor policy. Some will. Some won’t.

But I don’t think that is the major issue here, affordability is. If you are currently making the minimum payments on $24,000 worth of debt your monthly payment is probably right around $480 a month. Going with a credit counseling or debt management program probably isn’t going to lower the payment much, if at all, from that point. In fact, your total overall payment with a debt management company might be higher. Surprising, I know.

The monthly payment cuts often advertised are for people that are behind in their payments to begin with and have a big amount past due. When you go into a credit counseling program you can often start paying the counseling monthly payment without the past due part. The past due part will get stuck on to the end of the plan.

I’m worried that with only $100 a month left over, if you can even afford a repayment plan at all? If you are not paying for health insurance and saving money each month, any repayment plan that makes those two items unaffordable isn’t safe for you to consider.

If you want to look into a credit counseling program again, do it, but you should also talk to a local bankruptcy attorney as well. Only by talking to both sides will you be able to find the truth for you.

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With a $100 margin after bills I think your chances of successfully repaying your debt over five years through a debt management program is slim.

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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.
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