Debt Settlement or Debt Management? Which to choose?

[natesmommy]

I need to decide which way to go. Does anyone have experience with them and know what's best? I've talked to National debt relief, freedom debt relief and greenpath. 

[IndyPoolPlayer]

Others on here have said positive things about Greenpath. Any DMP or debt settlement company will leave you with "bad credit" for a while. If credit is "settled" it is typically charged off with "settled for less than full amount" and can leave you blacklisted with some creditors.

[cv91915]

Are these the only two options you're considering?

 

How long would it take you just to pay off the debt?  How much debt (and what kind) are we talking about?

 

What have you done to cut your expenses and increase your income?

[natesmommy]

These are the only two I'm considering. My credit is already shot from high debt load, no lates at all, but usage is very high, so no way to actually pay them down without some help.  I've been quoted about 48 months. 

 

[cv91915]

2 hours ago, natesmommy said:

These are the only two I'm considering. My credit is already shot from high debt load, no lates at all, but usage is very high, so no way to actually pay them down without some help.  I've been quoted about 48 months. 

 

You skipped most of my questions.  

[natesmommy]

You skipped most of my questions.  

I skipped one. I’ve done all I can to fix things on my end. I don’t feel this question was relevant to my question as to which is a better option. I am coming up short every single month and having to use my cards to cover the difference. Trust me. There’s no more blood in this turnip. I need to do something ASAP.


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[cv91915]

22 hours ago, natesmommy said:

I skipped one. I’ve done all I can to fix things on my end. I don’t feel this question was relevant to my question as to which is a better option. I am coming up short every single month and having to use my cards to cover the difference. Trust me. There’s no more blood in this turnip. I need to do something ASAP.


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So you're saying that you are only considering these two options, and that if you do neither it'll take you 48 months to pay off your debt?

 

If that's the case I wouldn't do either of the choices you've presented.  Both will ruin your credit for seven years.  

[natesmommy]

I have to do something. One or the other. I won’t file bankruptcy and I can’t get a loan. I was quoted 48 months by freedom debt relief. Greenpath quoted me longer but also a larger payment that I don’t think will help much.


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[IndyPoolPlayer]

As both CV and myself already said - you'll have 7 to 10 years of "bad credit" no matter which way you go in here - BK, or debt management/debt settlement. Don't believe the cr@p you hear on the radio ads. Settling for less than full amount owed will be considered just as bad as a bankruptcy with some creditors. I know in particular Barclays and Chase will blacklist you for at least 10 years if you settle for less than full amount owed. If your reason for not filing bankruptcy is the "stigma" you'll already have that reflected in your credit report if you go the route of debt management/settlement. If its your job, you'll have the same thing going on if your employer runs your credit and sees the accounts included in "debt management program" or "settled for less than full amount" with the associated charge offs.

[radi8]

On 8/23/2018 at 6:59 AM, natesmommy said:

 I am coming up short every single month and having to use my cards to cover the difference. Trust me. There’s no more blood in this turnip. I need to do something ASAP.
 

Then you need to do what you need to do.   Ideally you could rearrange your budget to  find additional money, but that just isn't always possible. Of your other options, a DMP is probably the least damaging long-term.  A DMP generally does not settle for less than full balance, they only drop the interest rates.  You'll pay the full balance.     The "debt settlement" places are bad news. You'll get sued. 

 

Of those three, Greenpath IMHO has the best track record. 

 

 Yeah, you'll have issues with creditors reporting you late  *IF* you stop paying before the plan is confirmed.  Some will report you "late" or "CO" incorrectly after confirmation and you'll have a fight on your hands.  Generally, after three plan payments they will  (should) report you as current, "managed by consumer credit counseling".  Once you exit the plan you'l have a bit of rebuilding to do.  First dig out and get your finances stable, start saving what you can, fix the credit when the time comes.  Good luck!

[natesmommy]

Then you need to do what you need to do.   Ideally you could rearrange your budget to  find additional money, but that just isn't always possible. Of your other options, a DMP is probably the least damaging long-term.  A DMP generally does not settle for less than full balance, they only drop the interest rates.  You'll pay the full balance.     The "debt settlement" places are bad news. You'll get sued. 
 
Of those three, Greenpath IMHO has the best track record. 
 
 Yeah, you'll have issues with creditors reporting you late  *IF* you stop paying before the plan is confirmed.  Some will report you "late" or "CO" incorrectly after confirmation and you'll have a fight on your hands.  Generally, after three plan payments they will  (should) report you as current, "managed by consumer credit counseling".  Once you exit the plan you'l have a bit of rebuilding to do.  First dig out and get your finances stable, start saving what you can, fix the credit when the time comes.  Good luck!

Exactly. I have to do something. Greenpath only lowers my payments about 300.00 a month which helps but not enough I’m afraid. I may have to go with settlement. Freedom debt relief says that have a special team of lawyers that helps with litigation if it gets to that point. I don’t know. I don’t want to pick the wrong one but I don’t want to pick greenpath and still struggle with not having enough money to cover all the bills.


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[radi8]

Best advice I have is to avoid the debt settlement places.  

Think about  it... by entering into a settlement plan you're advertising you have enough disposable income to put into a savings account.

Creditors won't wait in line for a partial settlement offer, they'll  sue you knowing they'll be repaid in full + costs. 

They'll obtain judgments, garnish your wages, seize your bank balances, anything that is not protected by state law.  And if you don't have it now...they'll  lay in waiting for decades. 

 

Their team of lawyers can't do a damned thing if you owe the money and the creditors can document it.    They will however pursue YOU if they don't get their portion.  

 Meanwhile your credit is trashed for the next decade. 

You'd be better off filing chapter 7.   You may have to. 

 

  I don't mean to rain on your parade, but these places are bad news, run by predatory people with a smooth story.... and I don't want to see you make that mistake. 

 

 If you don't mind,  what state are you in and who are the creditors? 

 

 

[Pam]

On 8/24/2018 at 6:29 AM, cv91915 said:

Both will ruin your credit for seven years.  

 

On 8/25/2018 at 3:39 PM, IndyPoolPlayer said:

As both CV and myself already said - you'll have 7 to 10 years of "bad credit" no matter which way you go in here - 

 

This is not entirely accurate.  A BK or debt settlement company will have that effect.  A DMP such as Greenpath will not.

 

A DMP such as Greenpath won't have that effect if payments are kept current until the plan takes over payments.  I realize this is not always the way people approach it.  Programs such as Greenpath do not advise that you stop paying prior to them taking over, or require that your accounts be in default before they intervene.

 

During the time that a person is in the DMP, accounts will be notated as in a DMP, but once the DMP is successfully completed according to the negotiated terms, the note about the DMP will be removed, and the account will be reported as PIF and no derogatory info for the time in the DMP.  For a 36 month program, this would put all lates as at least 36 months in the past.   Some of the accounts will say "Closed by Credit Grantor" in the notes but that isn't factored into your score. I've got 2 on my report that have never had an effect one way or the other on my ability to obtain credit. 

 

More importantly, in the rebuilding phase, if you use a DMP you haven't burned all those bridges.  Walking away, BK, and debt settlement will burn those bridges, some more permanently than others.  A DMP will not do this - you're paying back the full balance, just at a reduced or removed interest rate.

 

 

[rslifkin]

17 hours ago, Pam said:

 

 

This is not entirely accurate.  A BK or debt settlement company will have that effect.  A DMP such as Greenpath will not.

 

A DMP such as Greenpath won't have that effect if payments are kept current until the plan takes over payments.  I realize this is not always the way people approach it.  Programs such as Greenpath do not advise that you stop paying prior to them taking over, or require that your accounts be in default before they intervene.

 

During the time that a person is in the DMP, accounts will be notated as in a DMP, but once the DMP is successfully completed according to the negotiated terms, the note about the DMP will be removed, and the account will be reported as PIF and no derogatory info for the time in the DMP.  For a 36 month program, this would put all lates as at least 36 months in the past.   Some of the accounts will say "Closed by Credit Grantor" in the notes but that isn't factored into your score. I've got 2 on my report that have never had an effect one way or the other on my ability to obtain credit. 

 

More importantly, in the rebuilding phase, if you use a DMP you haven't burned all those bridges.  Walking away, BK, and debt settlement will burn those bridges, some more permanently than others.  A DMP will not do this - you're paying back the full balance, just at a reduced or removed interest rate.

 

 

This is some good info.

[vixer03]

On 9/3/2018 at 5:24 PM, Pam said:

 

 

This is not entirely accurate.  A BK or debt settlement company will have that effect.  A DMP such as Greenpath will not.

 

A DMP such as Greenpath won't have that effect if payments are kept current until the plan takes over payments.  I realize this is not always the way people approach it.  Programs such as Greenpath do not advise that you stop paying prior to them taking over, or require that your accounts be in default before they intervene.

 

During the time that a person is in the DMP, accounts will be notated as in a DMP, but once the DMP is successfully completed according to the negotiated terms, the note about the DMP will be removed, and the account will be reported as PIF and no derogatory info for the time in the DMP.  For a 36 month program, this would put all lates as at least 36 months in the past.   Some of the accounts will say "Closed by Credit Grantor" in the notes but that isn't factored into your score. I've got 2 on my report that have never had an effect one way or the other on my ability to obtain credit. 

 

More importantly, in the rebuilding phase, if you use a DMP you haven't burned all those bridges.  Walking away, BK, and debt settlement will burn those bridges, some more permanently than others.  A DMP will not do this - you're paying back the full balance, just at a reduced or removed interest rate.

 

 

Great advise. I am on the same situation as the original poster. I am leaning toward DMP.  I just want to make sure that this is the same company "www.greenpath.com" that we are talking about. Thank you again for all the great advice. 

[vixer03]

Thanks again. I am sorry for hijacking this thread. 

[natesmommy]

I've decided to do DMP and pray it's enough to help us. I don't want to be sued or anything. My best friend has done settlement recently with no ill effects so far. She's not done yet, but so far it's smooth sailing. I am just not brave enough to go that route. Now the question is, does CCCS and Greenpath have the same interest rate reduction? A lot of mine only went down to 20%. I was hoping for more like 10%. Any info on that? 

[radi8]

The "concessions" are set by the creditor and are normally the same no matter who sets up the DMP.  Some offer zero percent,  others something only slightly improved, others won't participate at all.    Do you think you can afford the payments through the end of the plan? 

 

[natesmommy]

16 hours ago, radi8 said:

The "concessions" are set by the creditor and are normally the same no matter who sets up the DMP.  Some offer zero percent,  others something only slightly improved, others won't participate at all.    Do you think you can afford the payments through the end of the plan? 

 

After applying with Money Management International, I found that Greenpath charges more fees, and also has higher on plan interest rates than MMI, so I'm going with MMI. Just in case anyone else is heading the same direction, go with MMI! 

[vixer03]

16 hours ago, natesmommy said:

After applying with Money Management International, I found that Greenpath charges more fees, and also has higher on plan interest rates than MMI, so I'm going with MMI. Just in case anyone else is heading the same direction, go with MMI! 

Care to elaborate who is MMI?

 

Anyone heard of Incharge debt solutions or work with them?

[vixer03]

4 hours ago, vixer03 said:

Care to elaborate who is MMI?

 

Anyone heard of Incharge debt solutions or work with them?

Oops! MMI= Money management international.