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Debt Management Plan Difficulty


rureall
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I have been doing a debt management plan with my 15 creditors thru a CCCS for 6mths now. Took a couple months to get all on it cause they wanted more money each month to the point I can barely afford it. Now my savings is gone and I couldnt pay in December. I can pay in January but will probably miss February unless I dont get groceries, etc. I cant keep doing this but not sure what to expect. I would like to try and offer a settlement but prob too early. Its all credit card debt. Plus if I stop paying & wait then lots of fees & interest will be added too. Any suggestions? I am thinking of doing the debt settlement on my own as well but dont know what luck I will have doing it. I have Citi, Cap One, Chase, Barclays, JcPenny, Gap, Lowes, Walmart, GE Capital, and HSBC accounts.

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I'd never use a debt settlement company. As you're learning they will just bleed all the money out of you, of which, a lot goes to their fees.

Another thing to consider. It would probably just take one of those creditors (the one that jumps out at me, Cap One) to sue you and then you have just flushed all that money.

If you look at anything you signed, I bet it says the settlement company will try, will be the middle man for you and will attempt to settle at a certain percent. I bet you don't see anything like, if you pay XXX amount for XXXX time period XXXX creditor(s) will accept XXX payment as settlement in full.

Debt settlement is just a chapter 13 bankruptcy. However, unlike in a chapter 13 BK, the creditors are not forced to accept the settlement plan. I called a few debt settlement places, many years ago, and I got them to admit they had a, and I quote one of them "handshake gentlemen's agreement."

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I am not using a debt settlement company - I am going to try on my own. I do have a debt management plan thru CCCS which is more than I can really afford. Again did this for 6mths using all savings just to pay bills and get little groceries - cant do that anymore! I just dont know what to expect and from what I read I need to wait a few months b4 even trying to settle. I read many things but nothing really outlines what to expect, etc. Is there one place to find detailed info on what happens when I stop paying, when to try and settle and when they try to sue? I am going to pull the trigger & stop the DMP cause my family is suffering. Just had my car not start yesterday due to dead battery and no $ in bank so made me wake up.

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  • 4 weeks later...
I did speak with a bankruptcy lawyer and only option was chapter 13 with payment plan over 5yrs I cant afford either.

This sounds like you spoke with only one BK attorney.

There are good BK attorney's and bad attorney's.

Interview several attorney's until you find one that knows what he is doing and is doing it in your best interest. Your situation sounds like you need a good one. There is no reason that you wouldn't be able to file and put an end to this treadmill. The CCCS plan is looked at the exact same way as a BK by many creditors anyway. You have the negative for using them, just not the results from actually filing.

IMO, stay away from the large "mill type" BK attorney firms. They are the firms that charge slightly less fee but you end up with a larger plan payment because they don't have the incentive to write a good plan for you. They allow the Trustee to take advantage of you. You need an experienced attorney that knows how to write a decent Ch 13. BTW, just because one attorney said you had to file a Ch 13, doesn't mean that you don't actually qualify for a Ch 7. Do your research.

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