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 long before my credit rating goes up

  • It  is very appreciative for knowledgeable people, who are willing to share information which benefits a person in understand and managing their finances better. Thank you, Mr. Taylor for sharing such information to others.

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