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    Debt Management companies? Question

    I called Bank of America today to work out a hardship payment program. I told her I had over 15 credit cards to set up a program on and when I told her that she told me that she would recommend me calling their "Debt Management" company. She told me it consisted of several agencies, such as: credit counseling, Take Charge America, Money Management International and Nova Debt. She told me I would do better going thru them because they could contact all the companies and set me up under payment plans, then I would make one payment to them and they in turn would pay them. I would not pay them anything monthly, but with all the cards I had, it would be a better program then trying to do it on my own.

    BUT, I have read alot, everywhere, not to do this, that I can do this on my own. Can anyway help me? is this something I should consider?

    #2
    I'm confused. A couple of days ago, you posted that you had contacted each CC company and gotten them to lower your rate and put you on a payment plan. If that's the case, why are you trying to do this hardship program?
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
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      #3
      I am sorry, I am guess I too, am confused. When I called BA it was my last call. She brought up this debt management as a suggestion. I am open to any and all suggestions, but because I had made arrangements with the other companies already I told her I would check into it and let her know. She gave me the number to call and I did find out about it. They want to set me up on a budget which is good, but they want to charge me $50 a month. They really didnt give me any kind of information on how much per month I would need to send them so I dont really have anything to compare it to. I have read that other people have done this, but at the same time, I have read not to do it. I guess, I am looking to hear from someone that has done this because maybe this would be a better plan than what I have started to already set myself up under. Does this help?

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        #4
        So, if I understand you correctly...you already have payment plans established for your various accounts? Assuming the plans are reasonable and that you would be able to successfully make those payments, why would you pay some company $600/year to do something very similar? That money could easily be used to paydown the debt instead of lining their pockets.

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          #5
          Originally posted by worriedsick View Post
          they want to charge me $50 a month.
          I would not pay anybody to do anything. You want your money going to debt reduction, not to pad some banker's pocket.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

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            #6
            worriedsick, you have already made a plan with the creditors. I would stick with it and avoid the fees of this company. You are going to get a handle on it and we here on the forum are happy to help guide you, if needed.
            My other blog is Your Organized Friend.

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              #7
              That's exactly the problem with those companies, they will charge you for something you can do yourself and some will charge you and really not help you out.

              Without knowing the details of your debt all you really need to do is take inventory of all the debt you have, with who and for how much. Then organize them from lowest interest rate to highest. You then pay as much as you can towards the highest interest rate WHILE making minimum payments on all the other ones. Once you pay off the highest interest you roll that money towards the next highest interest debt and so on.

              This is the debt snowball, look it up...

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                #8
                Sure it's more convenient to make one payment to one company, but essentially you're just paying them to send out separate checks instead of you sending out separate checks on your own to your various creditors.

                50 bucks a month to just take your payment and split it up vs you buying envelopes and checks, and coming up with a simple system of how much money to send to which person on which day (the cost of a calendar and a pen, really). I'd do it myself if I were you. And if you could afford the service (50 a month), there's an extra 50 a month towards your first bill. And then do the debt snowball like mentioned above.

                Alexi

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                  #9
                  Even though I am using a credit counseling firm, I would have to agree with the previous posters...if you have already negotiated lower interest rates and a payment plan by your efforts alone, it wouldn't make any sense to pay someone $50/month.

                  In my case, my creditors would not lower their rates for numerous reasons, so I went with Plan B.

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