What does going on a debt management program do to my credit rating in the future? How much does this cost to get into this program? If I have no money now to make all of my credit card payments, how do I pay someone else to do this? – Donna

$40,000 credit card debt, having trouble making payments.

What does going on a debt management program do to my credit rating in the future? How much does this cost to get into this program? If I have no money now to make all of my credit card payments, how do I pay someone else to do this?

—Donna

Hi Donna,

I realize you are concerned about your credit rating. Most of us are. The credit score should not be the immediate concern for those of us unable to keep current on the debts we have now. Put your score on the back burner and start to think in terms of getting out of debt as the number one priority. You must address the debt issue first, then look to better your credit rating.

The cost of debt relief programs will vary. Your question specifically references a debt management plan (DMP). DMP’s are offered through credit counseling associations (CCA) that can be found all across the country. The benefit to a DMP is that your monthly payments can be reduced through interest rate concessions that your creditors may agree to through the CCA. If you have 40k in debt and can manage to confidently agree to a roughly 5 yr repayment plan at 2.2% of your current balance as a monthly payment (880.00), a DMP may work well for you.

The cost to you for a DMP will vary. You may pay anywhere between zero and 50 dollars a month to the CCA for the service.

You should look to speak with a CCA to learn more. I would recommend you reach out to Cambridge Credit Counseling in order to schedule a free consult. Call them direct at: 1-800-527-7595. It is important for you to learn what a debt management plan can do for you from a reputable and reliable service provider.

If your financial situation has deteriorated to a point where a DMP will not work for you, you should look to speak with local bankruptcy attorney and find out if you can qualify for chapter 7 where your unsecured credit card debt can be discharged. Go to www.nacba.org and do a search using your zip code. Most of the attorneys you will see in the results will offer a free initial consultation. If you call one who wants to charge for the consult, keep dialing until you find one who does not.

If you learn that your only option in bankruptcy is to file chapter 13, I would suggest you get back in touch with us here at CRN in order to learn more about how you may be a good fit to use a debt settlement approach to eliminate credit card debt.

You can schedule a consultation with a CRN specialist by clicking here: Talk to a CRN Expert . Fill out the form and submit, or reach us direct by calling 800-939-8357 ext. 3 for scheduling.

I invite you to come back to this page and post any updates or additional questions in the comment section.

Best of success to you in your efforts to get out of debt!

Direct Link to This Question

» «

1 Comment

  1. Jenelle Hunting
    June 5, 2011
    5:37 pm

    Thanks for a really interesting read, learn quite a few tips here, trying hard to improve my credit , i did a consumer proposal 7 years ago and just now i am starting to rebuild my credit slowly but surely and trying to avoid that credit card trap.

Leave a Reply



FIND US IN THE NEWS
{click logos for articles}

Consumer Recovery Network in the Wall Street Journal's Limiting Psychological Damage From Debt Collections CRN in “Credit Companies, Scammers Offer out for Bankruptcy” by The Washington Times Consumer Recovery Network in the DailyFinance: AllBusiness Podcast with CRN: Small Businesses: How to Dig Yourself out of Debt Kayce T. Ataiyero interviews CRN: Michael Bovee interviewed by Fox: Questions to Ask Before Hiring a Credit Counselor /></a> <a href=CRN mentioned, Consumer Recovery Network: on SmartMoney.com CRN in Liz Pulliam Weston interviews CRN in

Contact Us

  • Your information & email address are kept private at all times. We hate spam too!

Testimonials

“(We) both feel like we have had a huge weight lifted from our shoulders! It is like a new lease on life and we owe it all to our coach and CRN!"..."Our coach was wonderful and basically made this whole process painless. He was very professional and gave us all of the information we needed to get through the process."..."We believe CRN is reputable company that truly has the consumer's best interest in mind!”

“I especially want to praise Paul for his expertise guidance he gave me during this whole process. In the beginning, I was very nervous and scared about doing this.  I was especially worried about how this process would affect my credit score, but Paul explained everything to me in layman terms, which made it easier for me to understand."..."So, again, I humbly thank CRN and Paul very much for being there to help individuals like me, who feel like they are drowning in debt and have no one to turn to.”