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Discussion in 'Credit Talk' started by jordenand, Jun 8, 2009.
How do I know whether a Debt Management Plan is right for me?
Anybody can give some comments?
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It is very easy to know whether a debt management plan is right for you or not. All you have to do is ask them what they will do for you if you get sued by one of your creditors or a debt collector. Don't accept evasive answers or slick assurances that it won't happen because it probably will happen. The correct answer is that they can't help you if you get sued. Any other response to that question will either be a lie or an attempt to evade the question. Also ask how their services can help your credit score. The correct answer is that it will probably help your score by lowering your debt to income ratio but it will probably hurt your score more than it will help. The next question should be what is the total cost of their program and who gets paid first, them or your creditors? If they pay themselves first then pay debts after their charges and fees have been paid the chances that you will get sued are greatly enhanced.
I spoke to a person yesterday who was greatly pleased with his debt management company. He really extolled their virtues and how satisfied he is with their services. His problem now is that he has been hit with 3 lawsuits and they can't help him. The court gave him 30 days to respond to each of the 3 lawsuits and he was served with all 3 at the same time. He spent 22 of those days looking for an attorney who would help him at a price he could afford and of course to no avail. He now has only 7 days to respond. In order to do that he will have to learn how within 1 or 2 days at most. In that same amount of time he will have to learn how to formulate a good response and prepare it properly, how to prepare a notice of appearance, prepare a discovery plan to present to the court for approval and how to actually put it into operation, and how to prepare a certificate of mailing and get all that ready to file in 7 days. So what actual good did his debt management company do him?
Well, here is a pretty good idea of what good they did him. They kept him from being harassed by incessant phone calls at home or at work. They kept him from being bothered by letters demanding payment. He could go about his daily life without having to worry about his debts. All he had to do was come up with the money to pay the debt management company and all was calm and peaceful. At least up until he got served with 3 lawsuits on the same day.
So is debt management the right decision for you? I can't really answer that question for you. It is a decision you have to make for yourself but hopefully I have given you some food for thought.
Thanks for sharing your opinion here ...