Debt Management vs Debt Settlement

When working full time, I was able to reduce my credit debt from 16,000 to 13,000 paying $395.00 a month (using a debt management program). My job ended and I have not been able to get full time employment only contractual opportunities. Two of my three cards are 60-90 days late. As I work on regaining financial footing, I’ve am trying to decide between rejoining debt management or doing debt settlement. I know if I do debt management – paying $395 a month-it will take me 4 years to pay it off. If I do debt settlement, I will pay $307 (including fee) for 23 months. What is the better choice? Thanks.

I imagine that both will make for NEGATIVE information being reported to your credit reports, which will cause future derogatory actions (higher interest rates, more fees, etc.), plus the late payments, which creditors will definitely not look at kindly.

If you settle, get the amounts in writing FIRST, well before making a payment. Keep copies of everything. Mail the bank checks and a copy of the letters to the creditors, and make them SIGN for the receipt of the payments. Document, document, document.

Then, send copies of the checks and the letters from the creditors clearly showing the amounts to the Big 3 credit bureaus so your paperwork is updated promptly.

Take care & good luck!

I am in almost the exact same situation. I’ve been on a Debt Management Plan for 1 year. I lost my job because the business just closed and have missed two payments on most of my cards.

I just got hired for another job but haven’t started training yet. I know that if I had a month I can get back on track once I start getting paid again. But I’m not sure if they’ll even let me back into a DMP. I owe about $8,000 total so I don’t want to file bankruptcy for something so small. I am thinking of calling them individually and trying to settle. If they don’t agree, I will tell them that I am contemplating bankruptcy. its better for them to accept some rather than nothing at all. I definitely won’t go with a Debt Settlement Company because I don’t trust them.

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