You cannot sign up for new credit cards, nor can you use the ones you have. While it may sound unreasonable to bar you from using credit, the point of your debt management plan is helping you dig your way out. “The last thing you want to be doing is running up more high-interest debt on the side,” said McClary. “You’re not doing yourself any favors in that situation.”
There's also an important caveat: You need to determine if the lender you're thinking about repaying charges a prepayment penalty for early payoff. Some personal loans, auto loans, and mortgages charge if you pay off your debt before the designated time. If so, you may not want to put that debt on your early payoff list, as any money saved on interest might be lost to the penalty.
First, it can be difficult to complete a debt management program. You’ll lose a large measure of financial freedom — most programs will require you to close all of your credit accounts and refrain from opening new ones. You may be allowed to keep one creditor outside of your debt management plan for emergencies, but if you abuse the privilege, you’ll just dig a deeper hole of debt.
You must be able to demonstrate financial hardship, so that the company can negotiate with your creditors and show you are eligible for debt relief. Some examples of financial hardships, according to the company’s website, are a recent job loss, a separation or divorce which has led to a reduction in income, death of a spouse, unexpected medical bills, student loans or IRS taxes.
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.
Some people take out home equity loans to get the money to pay off various debts. That can be effective if the home equity loan features a lower interest rate. This can be a powerful strategy, as it tends to feature lower interest rates and often-deductible interest, but  it does reduce your home equity and put your home at risk, so don't do it unless you will have the discipline to pay off the home equity loan. If you use the money to pay off credit card debt but then proceed to rack up more credit card debt, it may not have been worth it.
Another option is consolidating your debts into one manageable account. The main purpose of this is to eliminate the higher interest rate debts, arrive at lower monthly payments and allow you to concentrate on making just one payment. However, this does nothing to your total balance. What you will be doing is shifting all of your debts into just one account.
Savings: National Debt Relief claims its clients realize an approximate savings of 30% when including its fees. This savings applies only to clients who stay with the program until all of their debt is settled. While National says the majority of people who enroll in the program complete it, some customers drop out for various reasons, including the inability to save enough money to settle debts.
This company has done a PHENOMINAL job! Can’t say enough positive things about this company. They have made me feel like he’s from the start with no judgment, they have been forthcoming with information & advice. When I have had any communication with the representatives each and everyone of them have been compassionate & professional. The level of stress they have taken off my shoulders it’s truly a saving grace. Thank you NDR for everything you have done for me thus far!
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It is also important to be aware of any debt settlement and debt relief and elimination scams that may be going around. Always research the companies or the debt relief programs you are interested in and make sure they are offering legitimate and reliable services. Also, make sure that the debt consolidation program you work with informs you of all the risks that may be associated with the particular programs they are offering.

Unlike traditional debt consolidation loans, a nonprofit debt management program can help you lower your interest rates and consolidate debt with bad credit. That is because a debt management program isn’t extending new credit or a loan to you. They are simply helping you bundle your payments and make them on-time, and helping you lower your interest rates, despite a poor credit history. Why? Creditors may see you as a bankruptcy risk. By giving helping make your payment more affordable with lower rates, and supporting nonprofit debt consolidation programs, the creditors are attempting to prevent you from defaulting on your debt.

If you're not able to secure a lower interest rate from your current credit card company, you may be able to transfer outstanding credit card balances to a card with a lower or zero interest rate (called a balance transfer credit card). Credit card companies often offer promotional rates for a limited period in exchange for you transferring a balance from an existing card to a new one. You'll need to meet the balance transfer card company's qualifications, and will probably need to pay a transfer fee that equals about 3 percent of the balance you're transferring.

While National Debt Relief claims that people who finish its debt relief program save on average 30% off their original debt, it’s important to consider the interest and fees you’ll accrue during the time you’re enrolled in the program. Furthermore, If you don’t finish the program, or if National Debt Relief is unsuccessful at negotiating the terms, you can end up stuck with a higher balance than you started off with.


Bankruptcy is not the credit catastrophe it once was. Certainly filing bankruptcy does not improve your credit and your credit score will suffer if you file. However, you can rebuild your credit within a few years by charging small amounts on a credit card and paying the bill on time every month. Taking out a personal or auto loan (not payday loans) can help improve your score quickly as well if you pay your bill on time every month. After a few years of doing this, your credit score should be in the 700 range. Post bankruptcy, you can thrive and not merely survive if you are diligent about getting back on the road to financial recovery.

Consider debt consolidation. A debt consolidation loan allows you to compile multiple high-interest debts, like credit card balances, into a single lower-interest debt. While debt consolidation can't lower the principal of what you owe, it can reduce the total amount of interest you'll pay over the life of the debt. Reducing interest expenses may make it easier for you to put more money toward paying down the principal of the debt.
Receiving automated refund checks is great, it’s like finding money on the ground. As it turns out, stores owe you money all the time, but they don’t pay if you don’t ask. That’s where Earny comes in. They automate everything. Price drop? Get cash back for the difference. Deliveries arrive later than advertised? Get cash back. Effort required? Zero, just how we like it.
so to ease my stress, which ironically is a major component in my disabiiity, after I fill out their financial affidavit, I am assuming I won’t have to worry about them pounding on my door and taking our furniture? My 2013 tax statement Chase bank had sent me a 1099 C for over 20000 – with that when the acct tallied…..he still came out with an insolvency of over 49000 – this all happened rather fast as was not aware my depression also created a bipolar II disorder which is how I accumulated so much debt in such a short time – termed as “manic sprees” – to think I once was a high risk collector and i heard this term at least 2x a day and did not believe……..what is that they say about what goes around? Statute of Limitations with no signed agreement in Fl is 4 yrs..last time I had paid the “creditor” on this one was Nov 2011 – however I see another sitting in collections from Portfolio that says last py was 3/2011 and another from Unifund where lst pymnt was feb 2011 – statute expired…..would I call Transunion?
Finally, if you or the credit counseling agency fail to make payments on time under the debt management plan, those late or missed payments will appear on your credit report. Because your DMP can cover many debts, one late payment to the credit counseling agency may be reflected as a late payment for each account that is part of the DMP on your credit report. A late payment will also harm your credit scores.
In fact, certain aspects of a debt management plan will have a positive impact on your credit score. These aspects are the amounts owed, payment history, and inquiries for new credit.  Your payment history, which makes up 35% of the FICO credit score, will have a positive impact assuming your payments are made every month. In terms of amounts owed, which makes up  30% of the Fico score, this aspect will be positively impacted as the accounts are paid down.
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