Once a credit counselor has reviewed your situation and you both agree that a debt management plan is the next best step, the counselor will negotiate with your creditors to see if they'll agree to reduce interest rates or monthly payments, waive fees or reduce the amount you owe. When your credit counselor reaches an agreement with all creditors, you'll begin making monthly deposits with the credit counseling organization, and it will use the money to pay your unsecured debts.
Dave Ramsey is the way to go! My wife and I took his course through our church but you can take it online. He’s funny, informative and gets to the point. I like the facts and my wife likes to have fun so his course was perfect. It even helped our marriage. When BOTH husband and wife are cleaning up the debt mess it makes it that much easier however, we did see a lot of single people taking the course too. We started in Oct. 2014 with 48K between all the loans we had together and now our debt free day is September 18th 2015!

Yes, all unsecured debts should be included on your debt management plan. This means that all revolving credit accounts will be closed to further use. The purpose of this debt repayment program is to help consumers get out of debt.  To do this, it’s important that no additional charges are made while are on the program. However, as with any rule, exceptions can occasionally be made. Discuss any accounts you’d like to keep open with your counselor.
If you're seeking credit card relief, ACCC’s debt management program can help. A debt management program provides a unique way of eliminating credit card debt and is individually designed to meet your specific financial situation. If you are looking for to consolidate your debts, you may find relief through ACCC's debt management program. Our professionally trained and independently certified counselors will:
Negotiating with creditors can take a lot of time and effort. Many people decide to let companies like National Debt Relief do the work for them. If you take this option, National Debt Relief will contact your creditors to discuss ways to lower your debt. Some companies will agree to lower the amount that you owe. Others will agree to lower their interest rates and waive fees.
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Having said that, the other posters are correct. You can settle debt on your own without the help of a debt settlement company. It does take a lot of time and energy though. That is why some people choose to use a company to do it for them. Due your due diligence and search for reviews of the companies you are interested in and see what others have to say.
Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.
Generally my view is if you can afford to pay your debt through a DMP, go for it. But if the payment plan they are proposing is a stretch and you’re not sure that you can keep up with those monthly payments, then consider settlement or bankruptcy. Of course, it’s impossible for me to say exactly what you should do since I don’t know your entire financial situation, but I wouldn’t rule it out for fear of the impact on your credit.
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A debt management program is different from debt consolidation in that it consolidates your payments but not your loan (you are not taking out a new loan as you would in debt consolidation). These programs enable debtors to work one-on-one with a financial professional to get your financial obligations under control and are created for consumers by nonprofit credit counseling agencies.
Put extra money toward the credit card or debt with the smallest balance. You'll be able to pay it off quickly, reducing the total number of accounts you have to deal with, and giving yourself the mental boost of successfully eliminating part of your debt (though you'll pay more interest in the long run than if you were to pay off debt with the highest interest rate first.)

Being deep in debt is a very stressful situation – especially if what you owe is more than what you are earning every month. Any breadwinner in the family feels this burden day in and day out. The pressure to make sure that the family is provided for is frustrating. While paying for the usual bills, you need to make sure your debts are paid on time and correctly. Not to mention having extra money to put aside so you will have emergency money for unexpected situations.


Man, I’m in trouble! Just calculated my DTI ratio and it’s not pretty! A year ago I started taking charge of my credit problem and decided to do a debt consolidation. The problem is, now that I had this loan in the exact amount of what I owed in credit card and line of credit I figured I would pay most of it and then keep a little money to get stuff I needed (a new mattress and some furniture). Stupidest move I ever did! Now, a year later, I’ve maxed out my credit card once again (I should have lowered the limit after I had paid it off a year prior…..but I thought I was good), I still owe over $5000 on my line of credit and now, I also have to pay that consolidation loan! Within a year, my debt amount went from $14,500 to $33,500! And the worst part? I don’t even know how I managed that! I don’t think I spend a lot of money on trivial things………but clearly I’m spending somewhere. So according to your calculator, I’m at a 0.62 DTI ratio. I mean I make over 50K a year, if I cut down on…..everything, I should be able to pay this off. My car loan is at 0% interest so I’m not too concern with that one. I do put money away every month in an RRSP (it’s the Canadian equivalent of a 401(K)) which cuts down my income tax payment at the end of the year. I’m also a federal employee so I have a pension plan at work with a lot of good benefits so I’m set on the pension plan side. But I can’t manage to save enough money to cover even one month of my income. I mean I’ll be 30 in 3 months and I’ve always been a pretty smart girl……..but I can’t get a hold on my finances! Anyway, I’ve been going through your site and checking out all your tools. It’s giving me a hope.
Gerri. I screwed up bad. I joined up with a friend who said he can get a company going. I bought $13,000 worth of merchandice and loaned him through time about $15,000 in cash Through cash advanced from my cards. He bailed. I got about $4000 in tools back but I had previous balances(that were controlled) I ended up getting a consolidated loan. Big mistake. Total I owe $13,000($320 month)on a card and $34,000($806 month) to consolidated loan. Now I’m thinking of debt relief($906 per month){total of $34,000which is lower than what I owe on the two debts} My score is 750 est and I don’t want to hurt that. I have house payment of $540 (pay off est $74,000) Car at $450 (pay off approx $15,000)one at $300(pay off approx $13,000) and one at $325 (pay off $23,000{bran new}) and basic stuff. Food, power bill, cable, insurance & cell phones that total up to approx $1300 month. My wife takes care of all that but the mistake of the two debts is all mine. I give her 80% of the pay and I take 20%. I average take home about $2500 to $3000 est every two weeks. I think I need a counselor. What should I do? I’m freaking cause I started the debt relief program($34,000 at $906 for 38 months which is lower than what I owe total on the two debts I’m discussing). but haven’t signed the final paper just yet. I feel I make enough to pay off everything in no time but my wife says we are living paycheck to paycheck. All my wife’s cards will be paid off probably in March. I’m like way confused
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Next, your credit counselor will compile your data and ask you to commit to a debt management plan if they believe it’s the best option. If you choose to move forward, you will begin making a single monthly payment to the credit counseling agency who will disburse the funds on your behalf. Your credit counselor may also suggest alternatives to debt management plans if they believe a better option is available.
Many approved credit counseling agencies provide counseling services in languages other than English. For a list of agencies and the languages that they offer, select the language from the drop down list below and click "Go". If you are looking for a language that is not found on the drop down list, please contact the Credit Counseling Unit at the Executive Office for U.S. Trustees at ust.cc.help@usdoj.gov.
Getting out of debt is a long-term commitment; there’s not an overnight solution. The most important step you can take is to develop a realistic plan and set a time-bound goal for paying down your debts. For example, you plan to pay off your $10,000 in credit card debt in three years by paying $280 toward your debt every month. However, make sure your goal is realistic for your budget. If you can’t afford that $280 per month, then you’ve set yourself up for failure and may need to consider extending your timeline to five years for a more affordable payment. Having your goal planned out and written down can go a long way to helping you successfully get out of debt.
If you're unsure of all the accounts you may have open, especially those that might be in collections, you can check your free credit report. It will show what creditors are currently reporting to the credit bureau, including your most-recently reported balances and contact information for the accounts. (Your banks and credit card issuers will have the most up-to-date information.)

The debt relief company has had minor legal issues in the past, but it has overcome those obstacles to become one of the most popular accredited debt relief companies online. Despite negative reviews, it’s clear that Freedom Debt Relief isn’t a scam. In fact, many Freedom Debt Relief clients credit the company for getting them out of debt and teaching them how to avoid future debt. You should always compare several companies before choosing a debt relief option, but this one stands out as one of the top debt management companies.


Bankruptcy is a last-ditch attempt to settle debts. It is a legal proceeding through which you liquidate all assets in order to wipe out debt (Chapter 7) or persuade creditors to approve a repayment plan over a 3-to-5 year time frame to eliminate debt. There are severe consequences for both, including a drop of as much as 200 points in your credit score and the bankruptcy action remaining on your credit report for 7-to-10 years. A debt management program is not a legal proceeding. A notation that you are in a DMP could appear on your credit report, but there should be little impact on your credit score until you complete the program. At that time, you could expect your credit score to improve, sometimes dramatically.
You see, when you consolidate your debts or work with a debt settlement company, you’ll only treat the symptoms of your money problems and never get to the root of why you have issues in the first place. You don’t need to consolidate your bills—you need to delete them. To do that, you have to change the way you view debt! Even though your choices landed you in a pile of debt, you have the power to work your way out! You just need the right plan. 
I have recently cut everything up and transferred my high interest cc to my lowest int credit card. I’m not able to use any of them anymore. I have $2k in savings at a seperate bank. I am married with no children but I still worry that $2k isn’t enough. My DTI was .88 based on your system. Very depressing but helpful. I’m going to try something drastic and get rid of about $68k in debt on what is currently $71,500 of annual income by the time i’m 30. That gives me almost 3 years. Don’t know why but I feel like writing that actually helped me. Thanks again. I really enjoy the site and this post! Hopefully in 3 years or less i’ll write in with a success story!
The rule also specifies that the consumers’ money set aside to pay debts be maintained in an account at an insured financial institution; that the consumer owns the funds and any interest accrued; that the debt settlement company does not own, control or have any affiliation with the company administering the account; and that the provider does not exchange any referral fees with the company administering the account, the FTC says.
Yep, you read that right. And yes, we even mean stop contributing to your 401(k). Right now, you want all your income to go toward getting out of debt. Once you’re debt-free and have saved three to six months of expenses in an emergency fund, then you can resume your contributions. By then you’ll be on Baby Step 4 and can start putting 15% of your income toward retirement.
You cannot use your existing credit cards while you’re on a debt management plan, nor can you open new accounts. McClary also said that if you do manage to open new credit card accounts during your debt management plan, existing creditors who find out may stop participating in your debt management plan and reset your account to its original terms and interest rate.
I filed a chapter 7 after my husband passed away. He had a a lot of debt and so did I. I was paying all my bills before and whatever of his I could. Well let me tell you. The phone calls were coming in one after another. Much of the debt in my husband’s name was written off, about $120,000. The bankruptcy attorney came up with still $125,000 with both our debts. I had to sell 2 properties before I could file so I did that.That helped pay for the bankruptcy and other expenses. I paid $5000 in 2009 taxes with the money from the sales of the properties.
But with the help of her credit counselor, she worked out a plan that got her out of debt in just 3 years. When she saw her credit card balances going down, she knew she made the right decision. With the money she’s saving, she plans to make a great down payment for a brand new car. And she looks forward to not stressing about how she’ll be able to afford the payments.
It could also help to reach out to a debt counselor or financial planner to take steps toward getting your finances in order, or at least developing a game plan for getting back on track, McClanahan said. “If the debt is beyond your means, you might also want to explore bankruptcy or whatever it might take to turn your situation around,” she said. A professional can help you weigh the pros and cons of different options.

Portfolio Recovery just got a judgment against me for 10000 – it was a motion for summary judgment and it was pre determined before I got to say anything..no mediation was offered…..I am on 100 percent disability and only work about 12 hrs per wk so they cannot touch my earnings either – I am co owner of house in Fl but we have homestead…..I will be 60, husband is 66 — so exactly what do they hope in getting this judgment? The alleged debt was in my name alone..
Note: I can’t take the space here to list a million business ideas, but I have always found inspiration in the Inc. 5000, a list of the fastest-growing companies in America. My first college internship was with Inc.—my job was to interview the CEOs of these companies to ask about the secrets of their success. It was one of the best experiences of my life. I still think of that list as “5000 ways to make money.”

DMPs for consumers are often negotiated by a credit counseling agency on behalf of the debtor.[1] Credit counseling agencies often address the debt by working with the debtor to set a budget based on their regular income and expenditures that will then include one regular bill payment that is allocated across the creditor(s). Agencies will negotiate on behalf of the debtor to lower payments and interest rates with creditors. Some of the agencies are non-profits that charge no or non-fee rates, while others can be for-profit and include high fees.[1] The effect on the debtor's overall credit score will vary.[3] In the United Kingdom, as well as DMPs, residents can also apply for an Individual voluntary arrangement (IVAs), which can give the debtor a discount on their debt.[4]

Our debt counselors must complete intensive financial counseling and become certified by the NFCC. Besides being certified, many of InCharge’s credit counselors have over 10 years of experience as a financial counselor. They’ve helped people through every kind of financial downturn, from losing a loved one to catastrophic illness, to job loss. They can help you too.

We all know that didn’t happen, and soon enough, the debt caught up with me. As I approached my 26th birthday, I maxed out with debt of around $80,000. All of a sudden, I couldn’t keep borrowing my way out of trouble anymore. At the same time, I realized that the stress of barely making my monthly payments and owing twice what I earned in a year was taking its toll.


The exception? If you take out a loan from your retirement account to consolidate credit card debt, you’re more likely to see your credit improve. Retirement account loans aren’t reported to credit reporting agencies, so your credit reports will show less debt with no new loan. However, retirement loans carry their own risks, so proceed with caution.
Finally, if you do want to proceed with a debt settlement program I would always advise using somebody local or a debt settlement attorney who can help you in a similar fashion as National Debt Relief and likely save you on fees associated with the settling of your debts without the worry of thinking about whether you are being taken advantage of as attorneys are regulated by their states bar association and are subject to rules of professional conduct in order to maintain their bar license.  Additionally a local attorney can take creditor calls and assist with defending a debt collection lawsuit and settling the case prior to any judgment as part of services offered.
You’re ready to begin your debt snowball once you’ve saved your $1,000 starter emergency fund. That’s what we call Baby Step 1. An emergency fund covers those life events you can't plan for. Think busted hot water heater, dental emergency or flat tire. You get the drift. An emergency fund protects you from having to go further into debt to pay for an unexpected expense.

Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.
Credit counseling is done largely over-the-phone or online, but can be done in-person at a home or office. Counselors conduct 30–40 minute interviews to gather information about your financial situation. They will ask questions about income, expenses, budgets and assets. It is best to have this information documented and available when you begin the process.
As for your options, it doesn’t sound like your mortgage lender is interested in working with you. (I have no idea what “new laws” they are talking about but the last time I heard, Congress passes laws and the President can either sign or veto them!) I’d recommend you read my series: Underwater On Your Home? Your Six Options and then get some professional advice. In particular, you may want to look into whether bankruptcy or a short sale can help you.
Guy who signed me up was professional BUT dealing with the company afterwards was a complete run-around. Transferred 5 times and not given an honest answer. Had to call back and confirm my exit from the program. Then asked personal questions in a resell attempt. Mailing address given to submit cancellation request to is NOT a valid mailing address. Percentage higher than advertised – 23%. Customer service transfers you immediately somewhere else – couldn’t even finish my sentence. Very shady.

You may want to set net worth goals, too. Getting to a positive net worth might be an initial goal, and you might also set a series of savings goals for arriving at what you need for retirement. First, though, you'll need to have your debt under control -- and, ideally, wiped out. Keep these goals handy and regularly reflect on them to assess whether you're making progress, and what behaviors are hindering your success. 

Chapter 13: Most debts are discharged. Some debts that are not dischargeable in a Chapter 7 case have to be paid in full in a Chapter 13 plan. To keep your secured debts like a car loan or mortgage, you have to continue making monthly payments. There are circumstances in which you can add your car into your plan payment. You can also use the plan payment to catch up past due house payments and prevent a foreclosure.

Debt forgiveness is another potential strategy for anyone ready to admit "I need help with my debt." This involves paying your creditors a lump sum payment that is less than what you owe and ask them to wipe out your debt. While this is sometimes effective, it can also backfire and add even more debt to your totals. While ACCC does not get involved in debt forgiveness plans, we can help you understand the benefits or potential risks this approach may pose.

It sounds like you have done what you can to protect yourself (credit freeze, law enforcement etc.) I am not sure what your bank will do but I can’t imagine they will pursue you for a crime committed against you. Have you changed the bank account you deposit your Social Security check into? If not, talk with your bank. It would seem to be a reasonable precaution.
I know it’s fab to live in New York City or Los Angeles or San Francisco but if you’re going to be forever in debt and never able to retire, it’s not worth it. I know it takes money to move so you can choose from our other options; finding a cheaper place, getting a roommate, moving back in with your parents until you’ve saved enough to make a move.
Compare debt settlement vs. debt consolidation programs as they have differences between the two. One or the other may be a better option for you and your family, and it depends on your personal financial situation. Get information about the pros and cons of these two approaches. Read tips on which option may be the best option for you and your situation. Compare debt settlement and consolidation.
The average length of a DMP is 3-5 years, but is shorter for clients who decide to aggressively deal with their debt. Many clients pay down debt faster by using income tax returns, inheritance money or some other unexpected source of income. There is no penalty for paying the debt off early. You can make additional payments while on the plan and pay off your debt faster.
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