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Debt Management Groups
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Just want to warn anyone considering joining a debt management program. I had never been late with a payment until I joined one. I got laid off and decided to join a program to reduce my interest rates and pay the credit cards off more quickly. Much to my surprise my interest rates skyrocketed by as much as 15% and it took as long as 21 days for some payments to reach their destination. I scheduled my payments to come out on the days I got paid from unemployment, because there had to be money in my account. Then it took anywhere from 10 to 21 days for the management group to make a payment. Needless to say the credit card companies started charging late fees from $35 to $50 per late payment. I have been with the program since March of 2007 and they still cannot get a payment made on time. I am cancelling my involvement with the program (which costs me $55 per month) and paying these cards off on my own. Unfortunately now my interest rates are between 24% and 29%, so even a minimum payment will not cover the interest. Beware of debt management programs!
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From your desciption it would appear that you might be from American. In England there are 2 debt management companies that work from FREE, they do not take a cut or a percentage, but even thought they are free there are still plenty that will charge you to pass on your money to your creditors.
The free ones are reputable and many people swear by them.
The free ones are reputable and many people swear by them.
Yes, American I am. Not only does the debt management group large charge a monthly fee, both of my Discover cards increased their interest rate to almost 30%, and will not lower it, simply because I entered the debt management program. Both Discover cards cancelled my credit with them and put a black mark on my credit rating. I went from an "A" to a "D" within weeks because of this. Now I cannot buy a house for at least the duration of the program (three to four years). You're so fortunate to has free debt management.
I cancelled my debt management program today! Two of the cards I listed in the program put on my credit score that I had defaulted (specifically both Discover cards). So now I am paying using autopay through my bank each month, avoiding late fees and the $55 monthly fee charged by the debt management program. I still have to pay the usury interest rates of 25% to 30%. I tried getting a personal loan to pay off the cards, but because my rating in now so low I cannot get one at a descent rate. Never again will I even consider debt management programs! They are the worst mistake (next to getting into debt) that you can make.
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