So I’ve talked to two different companies about a Debt Management Plan now. Both companies went over our budget in detail, and did not really find much that needed to change - that’s good news, at least! Interestingly, the first proposal from both companies would actually result in our total monthly payments going slightly higher instead of decrease we were hoping for. Turns out that a bulk of my creditors have minimum payments for customers on a DMP that are higher than their standard minimum payments. With the first company, there is nothing they would be able to do to lower the payments, so we would have a $700/mo budget deficit — ouch! Basically, the total monthly payment ends up being the same as my current payments, plus the management company’s fees. With the second company, they would be willing to exclude one company (who’s payments went up from $495/mo to $800/mo) from the program, which would end up lowering our total payments by around $200 (as a few of my creditors are willing to accept substantially lower payments, with the knowledge that they will be paid more later into the program). However, since we are current on all of our accounts right now, the representative I was talking to suggestion that I try calling my creditors first, let them know I’m having some financial stress, and see if they are willing to help by lowering interest rates. I think I will give that a shot, and if it does not work out, consider the second DMP option.
DMP: Worth it?
Posted by payoff125k on May 31st 2008 Filed Under: The Big PayOff
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