Your Top 3 DMP Questions Answered

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Your Top 3 DMP Questions Answered

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Enrolling in a Debt Management Plan is a huge step for many struggling with debt. Many are skeptical at first and frequently ask these three questions after enrollment.

 

When will the creditors give me benefits?

 

Generally, most creditors require three consecutive payments on your Debt Management Plan before they give benefits such as lower interest rates and waived fees. Many have a hard time understanding this because their feeling is they enrolled in a plan and the creditor should offer some sort of help immediately.

 

Most creditors view the first three months as a trial period. They want to make sure you are committed to the DMP and truly want to pay off your debt. By accepting someone on a Debt Management Plan, creditors are foregoing revenue by lowering interest rates and possibly waiving late fees. Creditors are in business to make money and before they take a chance on losing revenue, they want to make sure you are committed.

 

Do I need to keep my accounts current?

 

This depends on when your creditors due dates are and when your scheduled CareOne payment date is.

 

If your accounts are current and the due date is 5 days or less before your payment date to CareOne, we suggest paying the difference directly to your creditors. If this is not possible, it is not the end of the world but be prepared for late fees on your next statement.

 

Sometimes we hear people complain they were current when they started the DMP and their accounts fell behind the first few months and now they have fees. Keep in mind that after you make your third DMP payment and the creditor issues benefits, these fees are often waived or rolled into the balance that will be paid off through your plan.

 

Why do my creditors keep calling me?

 

If you were behind when you started your DMP, your creditors will typically call up until your third payment. If you are late with any of your payments during the plan, they will also call. This is why selecting the right payment date for you and taking an active role in your plan is so important.

 

If you receive a call here’s what you can say to your creditor:

 

“Thank you for calling! I appreciate your patience while I get my finances in order. I have joined a credit counseling plan with CareOne Debt Relief Services and you should be hearing from them shortly. My payment is scheduled for _____. Thank you again for your patience. Goodbye”. 

 

It doesn’t help to yell or be rude to your creditors; they are simply doing their job.

 

So to summarize the first three months on a DMP are considered a trial period by your creditors, prove to them you deserve the help by making your payments on time. If you can afford it, keep the accounts current and be mindful of your due dates. When behind your creditors may call until you make three consecutive payments.

 

Remember, there is no easy fix, it took time to create the debt and it will take time to pay it off.

 

Rob Taylor   

Rob Taylor is a contributing author for A Straight Talk on Debt. Rob tells it like it is when it comes to the latest debt industry news and shares his advice on personal finance.

 

 

 

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  • Do I still make some payemtn towards credit cards being enrolled in DMP?

    I have question? If you are like two months or so late on your credit card payments. Should I make so type of payment to the creditors to show I am serious being in this program? I am enrolled now. But I feel if it  going to take another three months being in the dmp and things kickin in, woudnt creditors still can collect and tack on late fess and may even send me to collections sinc I am two months plus behind?

    T.Y. :)

  • If you can make the dmp payment and also can pay some to your creditors until the program kicks in, then do so. it can possibly keep your late fees down and will never hurt... if you can only afford to pay one, then make the dmp payment. the late fees you accrued before the program is accepted probably won't be erased, but if you don't make the dmp payment, the creditor will not accept your proposal.

    you can also still make extra payments straight to your creditor, even after the program starts. on top of my regular payments through careone, i sent my xmas money and tax return straight to my creditors to lower the balance.

  • What happens if the creditor is threating to sue and they say they won't accept the payments?

  • This information is different from what I was told to do when I called for help. I was told to not pay on the accounts that I have never ever been late on. So I took that money and paid another bill. Now I am confused!

  • I thought the $50.00 fee to CareOne.....was once and done. I see there is a $50.00 fee every month so far. This month (June) will be my 4th payment.

  • Good morning,

    Plese review your client agreement and repayment schedule which will show the amount of your monthly service fee. Based on your post jcarboni your monthly service fee is $50.00 and will be collected by CareOne each month.

    Thank you,

    Rob

  • Good morning earbest. If you didn't make the additional payments to the creditor it is ok. What is the status of your proposals now?

    Thank you,

    Rob

  • No really, what ARE you waiting for? I am talking to those that are reading this that are debating whether

  • should have been did this

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