The Debt Management Plan Proposal Process

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The Debt Management Plan Proposal Process

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Deciding to enroll in a CareOne Debt Management Plan (DMP) can be a big step.

Many of us have lived with our debt problems for years, allowing it to become the status quo. In some cases we barely manage the debt; making only the minimum payment, watching the balances stay the same, or worse, increase!

Perhaps you have even said to yourself; "Everything is ok because I am making my payments on time each month." or "I can pay these off when I get that raise, bonus, tax refund, or home equity loan." By saying these things to ourselves we are rationalizing away the debt problem.

Realizing that the debt problem exists is the first and most important step. Recognizing that we need help means that we are ready to take action to fix it. Enrolling in a Debt Management Plan is a big move in the right direction, but that does not mean it is easy. Understanding the process is the key to making your enrollment in a Debt Management Plan as painless as possible. The first three months on a Debt Management Plan are important. Here is some information to help you make a successful transition from living with debt to living debt-free! 

What is a Proposal? 

A proposal is an implied contract with a creditor. An example would be the customer pays the creditor $20.00 a month until the account is paid off; in turn the creditor provides benefits such as a lower interest rate and/or waive any accumulated penalty fees. In turn the creditor  closes the account. You give something to get something. In most cases the creditors have a preset suite of benefits and formula used to calculate the required monthly payment depending on the account balance. CareOne uses this information when calculating both the plan participant's monthly payment and estimated completion date.

When is the Proposal sent to the Creditor? 

Proposals are automatically sent five days prior to the customer's first CareOne DMP payment. So often our customers ask that CareOne send the proposals early, before they have even made a payment, so the creditor knows they are on a DMP. This is not a good idea! The creditors have made it clear they want the proposal with the first payment. Much like we pointed out before, give something to get something! That something is the payment. The sooner CareOne receives the payment, the sooner both the payment and the proposal are sent to the creditor.  

What Happens when the Creditor Receives the Proposal?  

The creditor will review the proposal, account balance, and account history and do one of three things; accept, decline, or not respond. It usually takes a few days from the time the creditor receives the payment and the proposal before CareOne receives a response. Accepted means the creditor has accepted the implied contract and our customer is off and running! Declined means the creditor has not accepted the proposal, and in some cases the creditor may submit a counter offer detailing what the creditor is willing to accept. No response, or pending, means the creditor has simply not answered. In some instances this means the creditor has accepted the proposal, and in some cases it requires follow up from both CareOne and the DMP participant (you).

How do I know if the Creditor Accepted?  

It is important to be an active participant in your Debt Management Plan. Read your statements, know your payments, learn as much as you can about your proposals, the benefits, all of it. Understanding how you are getting out of debt is vital to staying out of debt. Be involved. Remember that the proposals are sent within a day or two of your first payment. There are three ways to check the status of your proposals: 

  • Login to the CareOne site and click on My Program and select Proposals
  • Read your creditor statements
  • Contact CareOne  

What do I do if a Proposal is Declined or Pending?  

It is best to contact CareOne to verify the status of the proposal. In some instances the customer may have to contact the creditors. This is not a bad thing! Utimately these are your financial relationships, CareOne is here to help facillitate that relationship and to make sure your DMP works. Increasing your awareness and interaction with your creditors will ultimately make you more financially savvy.

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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  • I've followed these steps:

    # Login to the CareOne site and click on My Program and select Proposals

    # Read your creditor statements

    # Contact CareOne

    But I cannot find anything about proposals.

  • Good afternoon,

    I am not sure what is happening and why are you not able to view the proposals. Please give our customer care department a call at 888-227-3123 and they will be able to help you.

    Thank you!

  • why does the creditor want me to make a payment while the proposal is pending?,and is that ok?

  • Am I reading this correctly?  It seems to say that you have to make a payment first then proposals are sent.  In other words, I make a payment but the creditors don't have to agree and I would still have to pay them or become even more past due?  I can't afford to pay CareOne and them.  I am beginning to panic!!!!!!

  • Good afternoon,

    A creditor may request a payment while they are reviewing your proposal. This may happen if your account is delinquent. The best course of action is to make the payment, which is usually the difference between the amount sent by CareOne, and the amount the creditor is requesting. Remember that the proposal process generally takes three consecutive payments  to complete, no reason to panic.

  • Have made first set of proposals; had 2 decline:

    1) ongoing Onstar monthly bill (now removed)

    2) not including second card with proposed bank

    I have initially excluded 3 lines from DMP

    1) auto/tire 90 day same as cash paid zero interest for years

    2) retailer 16 months same as cash

    3) a credit card from Arkansas under 10%

    My questions are these

    1)Do you know of anyone having success with proposals leaving some lines out?

    2) How many times will these creditors review proposals before its final? (some I cannot afford to say 'no')

    3)Do I want to change my position to avoid this?

  • well my proposals were all sent out about five days before my first payment came out and five out of nine have already accepted .

  • well my proposals were all sent out about five days before my first payment came out and five out of nine have already accepted .

  • please provide  me the best dm script

  • When you first join the program it is easy to get confused; the proposal process, making one payment to all of your creditors and the overall management of your program can be overwhelming. One question we get quite frequently is, "How do I remove a creditor

  • So you just enrolled in the Debt Management Plan (DMP) and you noticed your balance on your creditor statement is different than the one listed on your CareOne monthly statement.

  • While it may seem like a long time, each of your creditors will receive a payment every month.

  • This month's question reflects on why you can't use your credit cards while participating in a DMP.

  • My first payment is due tomorrow, but there is still one proposal that hasn't even been sent yet?  Why would that be?  I enrolled in the program several weeks ago.

  • katiejo81, hopefully one of the coaches will see your post and respond as well, but the most common reason I've seen for this is that CareOne has incomplete or inaccurate information about the account or creditor and is unable to send the proposal.  I would call their customer support line immediately to find out for sure what is going on as you definitely want your proposal to be sent!

    Disclaimer:  I have been enrolled in the Care One Debt Management Plan since July of 2009, and have also been a compensated blogger since March of 2010.  Check out my articles by clicking on the "blogs" tab, and then the category of "My Journey Out of Debt" to read my family's experiences, struggles, and successes while fighting out way out of debt, and being enrolled in the DMP.

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