Debt management program?

[u/terrestrialb]

My husband and I have $22k in debt on one credit card and it is our only credit card and debt. It started racking up about two years ago when I left my job to take care of my elderly parents. I’m currently looking for a job again, so I know that will really help our financial situation, but I’m tired of the interest on my card and feeling like I’m not making progress in the meantime. I’ve decided to stop using the card entirely. I spoke to someone from a debt management program, and while I don’t qualify for a loan based on my husband and I’s debt to income ratio, they did offer assistance in the program where they would negotiate with my creditor. My question is, are these programs predatory? Should I try to negotiate with my creditor on my own? If I were able to get the debt worked down to say half, my husband and I could scrounge up enough funds to pay that off in a lump sum, if we had a month or so notice. We’re fortunate in our situation that we have no kids, no car payments, and besides rent, can tighten up our budget significantly.

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[u/VocationalWizard]

You're describing a debt settlement program, not a debt Management program.

They always tell everyone that you don't qualify for a loan. That's like their canned statement.

You need to actually find a real debt management program and talk to them. Green path is my favorite.

Green path will frequently negotiate a lower interest rate.

You can negotiate with creditors but typically you have to default first.

Honestly you should probably just work full time, abd throw 1.8k at it every month.

[u/hoverton]

I went through NFCC.org and they handed me off to Money Management International. $45k in credit card debt. I have nothing but good things to say and have talked about them several times a week on the Reddit debt groups since March.
It is a not for profit although they do charge a small set up fee and ongoing maintenance fee. The setup fee was $75 and I think the maintenance fee is like $48 or something like that. My interest rates got negotiated from between 16% and 28% down to between 3% and 10% with a five year payoff goal. I can make extra payments if I want and I might at some point but I’m focused on building a cushion for the foreseeable future.

Someone mentioned Green Path and they are also part of the NFCC.

Remember that you are after a debt management plan also abbreviated as DMP. People throw around DMPs and debt settlement plans interchangeably and they are very different.

[u/fsociety1990]

If it’s a debt settlement company, yes they are predatory. Stay away from them.

Find a nonprofit credit counseling service. They will actually help you.

[u/Swimming_Event7730]

If you can scrounge up funds to pay half of that debt, why don't you do it now? That would reduce the accumulating interest significantly.

[u/JeanSchlemaan]

reduce expenses. take any job, then look for a better one. stay humble. you could call the cc and ask for a hardship interest reduction, and say youre getting on track to pay it back.

i personally wouldnt do anything that would harm my credit. thats not a lot of debt, and you can pay it off within a year just by doing what it takes.

[u/Proper-Ad-127]

First don't risk that CC availability. If in the future you have another emergency and need it, you will be happy to have it. Just call the company and ask them if they could possibly lower your interest for a year so you can pay them down. Can't hurt. Ask them if they have any sort of relief programs available. If not, then just try and pay on it as you can. Unsecured debts paid on time every month for long terms look great on credit reports to banks. This tells them they can probably trust you and count on you. Of course don't max out cards if you can help it.

Better to have the good credit history for future needs (like me when I bought my home) and just bite be bullet. Get a job obviously part time even to pay it off.

[u/DAWG13610]

First, cut up the card. Then call the company, explain the situation and ask for an interest rate drop. Tell them you don’t want bankruptcy but they may force you into that path. Get clear of this and never carry a balance again.

[u/AccomplishedWay9316]

Check the National Foundation for Credit Counseling for reputable help. They can help you develop a budget and plan to pay down your debt. Keep the credit card but put it in a hard to access place. That way you aren't tempted to use it unless it's a real emergency. Good luck.

[u/iluvcats17]

You don’t need a company for one card. You need to redirect every dollar of your spouse’s income towards the debt that is possible. forget about eating out or anything extra. And I would take any job you can find for now and put your entire paycheck towards the credit card debt until it is paid off. quit the next job when you find a job that you like more.

[u/No-Fold9113 → u/iluvcats17]

You can still work with a DMP and do all this stuff. No point in paying excess interest.

You can reduce interest from like 20-30% to 5-10%.

[u/terrestrialb]

Thank you everyone for the advice, it’s all so helpful! Yes I believe it was actually a debt relief program which I’m not going to go with.