My reduced payments are less than my interest.........!

[thomking]

Hello to everyone!
Iam currently in a Debt Management Plan. My reduced payments are less than my interest charges, does this mean I'll be paying forever?
Needs suggestions, please reply me!
Thanks in advance!

[CATCHMEIFYOUCAN]

Total RiP OFF !

I was in Debt Mgmt Program - In the end BK was the better choice. I hope you chose one that is/was approved by the courts. I surely hope you didn't waste several thousand to be in ONE !

Previous "post,"

Ive attempted one of those debt mgmt programs .. after comparing filing Bk to those programs .. Bk was the way to go (after all you have to go through one approved by the courts to begin with ! and the fee is only $50 bucks, nothing more nothing less) i was almost ripped off $4000 grand on one of those "outside," DMPs .. do your homework ! Bk paves the way !

Those Debt Mgmt Programs suck you dry (the one that is not approved by the court!) There is no protection for lawsuits, judgments, garnishments etc. The program I was going to be in wanted me to save $1100 every month to negotiate with the creditors) BUT first they wanted $3500 up front in their fees alone! ALMOST as much as what it cost for a Ch13 lawyer.

JUST BEWARE ! AND YOU DO HAVE A CHOICE YOU CAN GET OUT ANYTIME YOU WANT ! If you want to repay you creditors do so through Ch13. DO YOUR HOMEWORK ! YOU'LL SEE !

Best of Luck, CMIYC

[lrprn]

Hello to everyone!
Iam currently in a Debt Management Plan. My reduced payments are less than my interest charges, does this mean I'll be paying forever?
Needs suggestions, please reply me!
Thanks in advance!

Welcome to BK Forum, thomking. Glad you found us!

First, it's against our forum rules to have links to specific websites without prior permission from our administrator, Lazar. I deleted the live link you had in your sig - if you want to display it, please PM Lazar for permission.

We have multiple members here, including myself, who tried the debt management route as a last-ditch effort to avoid bankruptcy. Even the good debt management companies often cannot get a sufficient reduction in amounts owed or APRs to make headway whittling down a significant debt load. We paid our Department of Justice-approved DMC (CCCS) $7000 over eight months to see a reduction of $900 in the total amount we owed. You do the math. Once we realized we were completely wasting our time and money with a DMP, we filed Ch 13 - best decision we ever made.

[thomking]

reply

Thanks for your suggestions!!!
Needs some more info plzzzzzzzzzzzz!!!!

[gavpedz]

1

[lrprn]

I went with a debt management company and same thing less that usual payments meant loans and so on went in to aria's (spelling!) made debt worse and would have been paying for ever i am going to file for bankruptcy in the next week

gavpedz, you are in the United Kingdom where the insolvency (bankruptcy) rules are quite different than here in the United States. Sorry to hear that your efforts to get out of debt there didn't work out as expected. Good luck with your insolvency case - hope that things go well for you.

[treehugger1]

Thomking, Be careful of the Debt Management. Chances are, anything they claim they can do, you might be able to do yourself. Here are my humble opinions:

1) Your credit is going to suffer, no matter what course you take: BK or DM

2) The majority of CC's won't even consider working with you as an individual until you are 60 - 120 days delinquent.


3) If you have steady income and have held the credit card for many years, you can potentially negotiate anywhere from a temporary 12 month plan to a permanent 5 year payoff plan. Both Citi and BOA/MBNA have given me five year payoff plans. It was quite painful to me waiting to see what these folks would do: play the game with me, or turn me over to outside collections. They chose to work with me. BOA/MBNA even agreed to not report any derogatory credit statements after I have lived up to the plan for 6 months. Citi simply shows pp - payment plan: paying as agreed with no derogatory remark. The verdict is still out with my $9K of cc debt with CapitalOne. after 90 days they still won't consider an arrangement different than the original CC "agreement," that led to 9.9% interest to 29.9% interest.

4) Do you have student loans? The federal law allows 10% wage garnishment (after taxes) to pay back GSL's(my understanding is this supercedes any state law). If you can live with 10% garnishment of after-tax wages, you "might" let them slide into collections and wage garnishment. If this happens to me, the garnishment will pay off my $75K in student loans in 10 years, versus the current "25 year plan."

5) I pled my case with several local creditors and worked out temporarily reduced payments (no additional fees or interest) until I'm "back on my feet." I may not be back on my feet until the debts are satisfies. Good deal.

6) I had some payday loans (I know, silly me) and they eventually agreed to work with me. These will be paid off July 1.

7) It is comforting to realize that when you are at rock-bottom, you have your finger on a very powerful weapon: BK-7 or BK-13.

Conclusion: I did not opt for any debt management company or plan. I know that BK 13 is an option I am not afraid of. I have steady income. I know it is not a criminal offense to not pay your bills. I have never been anything other than pleasant with those who treat me in a similar manner (other wise, I make their lives on the telephone living h*ll).I could care less that my credit is trashed (it's trashed either way). Through all of these dealings the past 8 months, I managed to still get financed, with very low interest rate, for a new auto, and last week discovered that I qualify for a $250K loan at 5.8% to purchase home. BK-13 is still in the picture, but I am determined to first get my housing/transportation/other expenses in order prior to taking the giant step of BK13, if required.

Everyone's case is different, however, if you are willing to accept BK as the ultimate solution, you can possibly do as well negotiating debt by yourself as "paying" someone to do it for you. Bottom line is that every creditor wants as much as they can get; more importantly, they want at least their principle.

Again, just my experience, but you truly can be in charge of your own destiny. I give thanks to this board, as it is responsible for helping me shed any qualms about filing for BK if one needs to. Just knowing you can go there in your head, is helpful for dealing with CC companies and other high-risk unsecured lenders.

[CindyLou]

Remember that any debt management plans, payment plans, deals, or settlement can result in unexpected 1099s!!!!!!

[ilovemycaitybug]

My husband tried one, not CCCS, it was called Freedom Point. I wouldn't say that they were crooks or anything, but the creditors were very difficult to work with and kept upping the amounts they would expect each month, while reporting him late each month the payment wouldn't meet their needs (which was EVERY month with Citi - but they sure did apply the payment while saying he was LATE!!!) Our monthly payments went up every month... when would it stop??? Very irritating, and I couldn't see how it would be possible to EVER pay off the debts at the rate he was going with them so he finally decided to file with me. So happy he made the decision. My attorney said that Ch 13 is better than any of the credit counseling programs (we filed Ch 7but he just wanted us to know that we weren't alone). If you want to pay your debts and are able to, then Ch 13 is the way to go. If you are below the mean income for your state, then I would file Ch 7 (unless you have property that isn't exempted). Good luck to you!

[thomking]

gavpedz, you are in the United Kingdom where the insolvency (bankruptcy) rules are quite different than here in the United States. Sorry to hear that your efforts to get out of debt there didn't work out as expected. Good luck with your insolvency case - hope that things go well for you.

Sorry to misuse the forum beyond the rules!
I feel sorry very much! SORRY SORRY!

[thomking]

Hello everyone! I am back!
Send you suggestions!