What to Expect Month Two of a Debt Management Plan

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What to Expect Month Two of a Debt Management Plan

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You have now started your second month on the DMP. During the second month there are generally two groups of customers; those who made their first payment in the first month and those who postponed their first payment to the second month. Remember it is about the creditors receiving a payment, not just being “enrolled” in a plan so, the sooner you are able to make your first payment the better off you will be.  

You made your first payment!

bills, bills, bills

 

  • Accepted Proposals.  Some creditors may have already accepted the proposal and started to issue typical benefits such as lower interest rates. Other creditors may accept the proposal, but the benefits are contingent on you making three consecutive payments.  
  • Declined Proposals.  Some of the creditors may decline the proposals for a variety of reasons. The most common are: 
    • Account in a promotional status. Generally means the account is less than one year old and was used to purchase something in a store like Home Depot or BestBuy® with a same as cash or no interest deal. 
    • Requesting a larger payment. This can happen when a billing cycle occurs between when the account was enrolled and when the payment is made. 
  • Pending Proposals. Some of the creditors may neither accept nor decline the proposal, but simply not respond. This is referred to as a pending status. If this occurs we rely on the customer to review their creditor statement to see if typical benefits are being applied.

 

You postponed your first payment

 

  • Accepted Proposals.  The creditors may not yet accept the proposal because they are still waiting for the payment. Making your payment in the first month is a great way to start off your plan.  
  • Declined Proposal.  Since the payment was postponed into the second month, and it is unlikely a payment was made in the first month, the majority of the proposals may be declined because they are requesting a larger payment. The payment is calculated based on the balance of the account.


Example:  

 

If you enroll an account with a $2,000 balance, the system will more than likely calculate a payment of $42.00. If two months go by without a payment, more interest and late fees are added, and the balance increases, to maybe $2,100. In that case the payment would be $44.00.  

  • Pending Proposals.  Some of the creditors may neither accept nor decline the proposal, but simply not respond. This is referred to as a pending status. If this occurs we rely on the customer to review their creditor statement to see if benefits are being applied. 

Remember it is not just joining that counts, it is making the payment!

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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  • How do you find out what status the proposals are in?

  • In my experience, not receiving a letter directly from the creditor is the clearest indication that the proposal has not been accepted. I joined March 22, 2007, made my first payment April 15, 2007 and got 4 proposal acceptance letters by the end of May 2007.

    4 of my creditors sent letters directly to me stating that my proposals were accepted and stating the terms. Later I received a letter from CareOne about 1 of the creditors who requested $10 more. I heard nothing at all about the last creditor, and when I called CareOne, I was informed that it had declined my proposal, but that I could still make the minimum payment through the program, which I did.

  • I would recommend that you call ALL your creditors as well as CareOne to find out if they received the proposal and whether or not they accepted - otherwise everything gets delayed another month!  Over communicate where possible.  

  • I understood it to be that once I enrolled in the program with CareOne, that I should not have any contact with the creditors. Is that right?

  • I just made my second payment and havent heard from any of my creditors except one which is taking me to court. I received a summons and faxed it to careone and my lawyer was supposed to call within 72hrs but I still havent heard anything. Im going to call again on Monday to find out whats up. Im just wondering why I havent heard anything from my other creditors

  • have been on the phone with supervioser JANE'T and she told me that after talking to my creditor Home depot that I would have to pay the late fees that are already assessed, and it clrealy says here that after 3 months t hey will be waved...  This lady did not seem to care at allthat my intrest rate has now gone to 29.99 percent and my balance has gone up over 100.00 since joining the program and after mking a payment..  IT should be going down  not up...  Your people are MIS  informing clients and If i could i would come out of the program at this time.  Actually We are considering BECAUSE of this doing the bankruptcey.  We were never late on any bills always paid on time, we got into the program to help us pay off sooner and lower the intrest rates...  Now we are among the LATE payers and fee getters,,, this is where they make their moeny and on top of all that we are paying ayll to HELP us.. wheres the help>??????Then was told it woulkd be a few more days to see if the proposel is accepted and in  the mean time i will get another late fee possibly an over limit one too now that it s over the original limit, I asked that some one call me and let me know if the new proposel is accepted and JANE'T said that was not something yall would do>>>>  well what do you do to earn 50.00 a month???Im not happy and will be filing a complaint with BBB the original person i started out with that TOLD me i would have the late fees IF any cause there were none at the time, if there were any they would be taken off after 3 consecutive months as in the stmsnt below from this website....Im not a happy client!

    THIS IS FROM YOUR INFORMATION THA WAS SENT TO ME!!!

    Understand How the Program Works  

    Once your creditors accept the proposals we send them, you should receive benefits like waived late fees and reduced interest rates after just 3 consecutive payments.  

    NOW do this... help me as your client dont dig me a hole and throw me in like your doing.

  • how can i check me credit score?

  • So i enrolled recently, but still have no clue about whats going on. I requested a Loan...to consolidate my debt. I gave my bank info and everything. So the loan i got approved for wont be wired to my checking at all? I dont get it.

  • David, why did you think you were getting a loan? That is not what this program does. They contact the creditors and negotiate lower minimum payments and lower interest rates on your behalf (on debt management plan). Something I tried to do on my own, but the creditors wouldn't lower the rates for me. Did you read all the paperwork before signing off? I encourage everyone to read everything they can so you will not be disappointed or caught off guard. I am happy with the program. I was also not late on my bills but interest rates were enormous. I checked to see if my proposals were accepted almost everyday. I knew exactly what was happening. You should have received an email with the documents attached. Please go back and read through everything. They will take the debt payment out of your account.

    Tina,

    "Once your creditors accept the proposals we send them, you SHOULD receive benefits like waived late fees and reduced interest rates after just 3 consecutive payments."

    Should does not mean will. They can only negotiate with OUR creditors on OUR behalf, they can't make them accept anything. They can only go by previous dealings with creditors to give us a good estimate. I didn't have any problems with my creditors, but I changed my due dates before I ever signed up.

  • Now that I am in the program when will my creditors start getting payents?

  • Hoping I am doing the right thing in joining Care One. My one friend is in it and he said it has worked good for him. My first payment is 2/26 and I sure do hope this takes me in the right direction or bankruptcy will be the only other step.

  • The program does help you have to work and do your part too. Care One is your backbone and your the arms and legs that get things moving. Always pay the difference on minimums to show your creditors you are serious about paying the debt off.

  • Lord help,Now I'm scared I've done the wrong thing by signing up,when i was reading and considering signing ,care one was sure  everything was going to be taken care of once i joined and made payments on time.

  • hello my name is lisa workman i had a question im about to make my 2nd payment in 2 days for $192. the lower my balance becomes or when one credit cards are paid will that lower my payments? my email is    lisakimberlin69@aol.com

  • I just started the DMP and my first payment will go through next week. My credit card payments are not due until this middle of next month. I have never had a late payment on my credit report. Should I expect late payments now because of the process. Sounds like I could have 90 day late payments recorded on my credit report because of the " be patient for the first 3 months". Can you please let me know what to expect. Thanks

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