How much does consolidating your debt cost, and what does debt management do to my credit??
$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
I realize you are concerned about your credit rating. Most of us are. The credit score should not be the immediate concern if you are unable to keep current on the debts you have now and are considering a debt management program. 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 credit card debt issue first, then look to better your credit rating.
The cost of consolidating your debt with a repayment program.
Your question specifically references a debt management plan (DMP). This type of debt program is usually offered through credit counseling companies that can be found all across the country. The benefit with a credit counseling program is that your monthly payments can be consolidated and reduced through interest rate concessions that your creditors may agree to through the debt management company. If you have 40k in credit card debt and can confidently agree to a roughly 5 yr repayment plan at anywhere between 1.8% and 2.2% of your current credit card balances as a monthly payment (880.00), this type of debt management program may work well for you.
You may pay anywhere between zero and 50 dollars a month to a credit counseling company for the service.
You should look to speak with a credit counselor to learn more. You can reach a counselor for a free consult at: (888)-317-8770. It is important for you to learn what a debt management plan can do for you from a reputable and reliable service provider.
If consolidating debt with a DMP will not work for you.
Speak with local bankruptcy attorney and find out if you can qualify for chapter 7 where your unsecured credit card debt can be discharged.
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 professional by clicking here: Talk to a CRN Expert . You can also call direct and speak with a debt settlement expert at 800-939-8357 and choose option 2.
I invite you to come back to this page and post any updates or additional questions in the comment section. Anyone with questions or concerns about consolidating credit cards using a debt management plan can post in the comments below for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
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.