Need advice from those who know (preferably firsthand) about Debt Management Plans!

[Pandora]

Citi is willing to do 0% with payments of $600; of course, the account will be closed with no option of reopening, but we could care less about having a card with a huge limit ever again.

Will post again as to our progress and whether or not we change our minds. Right now we feel like this is the route we want to go.

From reading your responses - it would appear that there is a moral issue at hand (i.e., I borrowed the money, I must repay it). if thats the case, then you can do that by filing a Ch. 13 with the benefit of not having any interest charged or penalties going forward from the time you file. Another benefit is that you're done in 3-5 years, much faster than trying to do monthly payments through DMC's.


You will be sued before you pay off all of your creditors. Not sure what GA laws are regarding garnishment, levy's, freezing accounts, etc but its something you need to check into before you decide.

[cghljh]

Well, I might be really naive, but I doubt that Citi will sue us if we are paying $600 or more each month on a plan that they themselves offered us when there are so many others who are just not paying at all. Hopefully we will be able to pay it off quickly.

It's not just the moral obligation, but that is part of it. Believe me, if things aren't going well a few months into this plan, I think my husband would be willing to file. I'm not going to push him into it, though. Thanks for your comments!

[csonly]

If Citi agreed to your payment plan, I don't think they will sue, but anything is possible with these cc companies. If you can afford to make all your payments and it works out for you, I don't see anything wrong with that. I totally understand where you are coming from. As I stated previously, we tried for years and thousands of $$$, but that didn't work for us, so for me, it seemed like so much time and money wasted. It's hard to get over the "moral" hump. We've all been there and if you are on that hump too long, it gets easier and easier to get over it. Your husband seems dead set against BK and, IMHO, I think you should respect his wishes and see what happens. I will tell you though, it's nice to be able to pay the mortgage, utilities and put food on the table without worrying where that money would come from because for so long, our cc's were priority and when I look back and from what I have learned, they should be on the bottom of the list, not the top!!!

[Clabbergirl]

I went this route once upon a time (before I ended up working for one) and for 11 months before paying off, and none of my creditors sued me. I did not have Citi as a creditor though. Your creditors get some money, more than they are getting if you file BK, and they will probably be ok with that. They will still have the right to sue you at any time, but it's unlikely. What do they care if your credit shows late payments for X amount of years? Do what is right for you and your family. $600/month sounds like a LOT of cash to one creditor, but if you can do it without a hardship and feel that is best, by all means. You could always negotiate with them further and ask for $400/month, no interest. Their option is to sell your debt to a creditor and take a loss, so it's beneficial if you're still giving them more $ than they would make by selling to a collector.

[2sad4this]

I know this has been out there for a while but I will put my 2 cents worth in as well. We tried the road of credit counseling and ended up filing bk. For about 18 months we worried and fretted but thought that we would try and do the "right thing" and try to repay what we owed. (which in reality we did, but not the interest and late payments) We scrimped and saved every penny to put towards this. We even went without a lot of things so we didn't have to use the credit card that had a low balance due that we didn't include in the program and made reg payments to each month. That was the ONLY positive thing that we learned to do, and haven't charged anything for over a year. No matter what we tried, one cc finally sued, which to us, forced us to file bk. Three months prior to the bk filing and the lawsuit, we did actually pay a settlement to one cc. We truly wish now that we didn't do that. Hind-sight was clearly 20-20 as we have to pay income tax on the money "forgiven" by the cc. Our debt was totally cc and we actually own our home. It's only worth $89,000 but what we owed that cc did not make us insolvent and therefore we have to pay the taxes on that. Because of that my husbands disability was also taxed and we now owe $1500 in taxes.

Our discharge just came through, and we are glad we filed. Yes I cried a million tears, and felt humiliated at times, but we have are lives back. Since we filed we can pay all our monthly bills and have enough money for food, gas and a few fun things. We look at money differently now and realize that so much of what we thought we needed was just a want. Things are going to get tight for everyone, but we feel like we have a chance to survive this now, too. This forum has greatly helped me.