Will my Debt Management Experience be Worth it?

A Straight Talk on Debt

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Will my Debt Management Experience be Worth it?

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Back in August, I was preparing for a two-week business trip to India. Being a little short on funds, I was worried about what would happen if my family encountered a large, unexpected expense.  

In a moment of weakness, I filled out an application to increase our checking account's overdraft protection line of credit. My request was declined because my debt-to-income ratio was still higher than the bank's liking. This is AFTER we've paid off over $70,000 of credit card debt through our debt management plan.

I was frustrated and disappointed. 

My friend Reva, who is also enrolled in a debt management plan, recently went through a similar experience. She was booking a flight online for a trip she had budgeted and saved for, when she was presented with an offer to save $100 on her booking if she applied for a credit card. 

Being just months away from completing her plan, she was looking for a way to start re-building her credit. Saving $100 on her airline ticket would be icing on the cake. Unfortunately, she was also declined because the creditor that Reva applied to was one that she had an account with already and was enrolled in her DMP.

To say she was dejected would be an understatement. She questioned whether the financial and emotional pain and suffering she had endured during the course of her debt management plan was worth it.  Sure she was paying off her debt and her credit score had improved, but if she wasn't able to secure credit when she wanted or needed it, would having been enrolled in a debt relief plan help her in the long run?

Being in a debt relief plan is hard. 

In addition to making a monthly payment to the plan, lines of credit are closed and opening new lines of credit is not advised by debt relief providers or creditors. Even if you do try, being approved for them can also be difficult, as both my friend and I found out. The enrollment documentation of my debt management plan spelled out very clearly that this would be the case. Neither of us should have been all that surprised that we were declined, as the reason was directly related to the fact that we have debt and are enrolled in a debt management plan.

But as I thought about it, I concluded that I'm not going through this to make it easier to secure new lines of credit. I'm doing this so that I don't ever have to apply for or use a credit card again. My wife and I are eliminating our debt and working to manage our finances correctly not to get a better credit score, but so that we don't ever have to care what it is.

I look forward to the day when I have the funds tucked away in savings, which allows us to handle unexpected expenses without relying on credit.

I look forward to the day when my consistent and on-time payments to my DMP, as well as secured lines of credit, such as my car payment and mortgage, allow my credit score to simply take care of itself.

Completing my debt management plan, in parallel with learning to manage our finances successfully, will make both of these goals possible. In 18 months, when I make my last payment, will I look back and think it was all worth it?

Without a doubt.

Related Links:

Have I Learned My Lesson with Credit Cards?

Habit Forming: How to make room for healthy habits

Getting out of Debt is a Constant State of Mind

Travis Pizel, Debt Management Plan Customer and blogger for CareOne Services, Inc.  

Travis Pizel

Travis is a contributing writer for the My Journey out of Debt and A Straight Talk on Debt blogs. He is also a very active member of the CareOne community forums. Travis is currently enrolled in a CareOne Debt Management Plan (DMP). Travis candidly shares his personal journey to pay off his debt and the tips he's learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family. You can also read more from Travis on the Enemy of Debt blog, where he is a featured blogger. Compensated Blogger for CareOne Debt Relief Services.

Follow Travis on Twitter @DebtChronicles

To connect with Travis on Google+ click the

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  • I am sure it was a let down not being approved.  I am glad you can see the positive in it!  Sometimes that is very hard to do when we are trying so hard to do what is right!!  

    I know I was a bit shocked to have seen my credit score go down quite a chunk once my creditors no longer showed an available balance!  But now a lot more offers for credit cards are flowing in.  It seems like there is at least 3-4 a week.  Including 0 interest for 9 months for balance transfers etc...  I laugh as I have no balance to transfer.  :-)  I have been thinking about this a lot lately as I do want to buy a house again someday!!

  • We lived for a long time with no credit cards. Then we lived for several years with just two.It was not until we started having trouble that we ended up choosing to have several cards. It is a slippery slope and I am most nervous about what happens when we get to that point. Have we learned our lesson or will we talk ourselves into it? I am still not thinking long term. We have managed to get Christmas funds but I can't look farther down the road than that. We have no retirement and no savings. The last thing we need is more credit. Not having the ability to get more lines of credit is kind of a relief right now.

  • Yeah, Monica, it was a let down.....but really in the end I'm glad we were declined.  Don't need more credit, don't want more credit.  :)

  • It is definitely a slippery slope, kimmer5000 - one minute it's only for emergencies, the next minute you're using it to buy something that you can totally do without.  If you don't have any credit lines just sitting around, you can't abuse it!

  • This is such a good blog, Travis.  It really brings us back to the whole point of being in a DMP or DSP, and that is to BE DEBT FREE.  I haven't been tempted by any credit card offers yet, but I'm sure that will come in time, and i am using THIS time to really do alot of serious self talk about the fact that my credit card days are OVER, no matter what.  It was that lure of easy money that got me into this trouble, and I sure don't want to make the same mistake again.  I keep thinking about having that big chuck of money go into savings every month after I complete my DMP, and WOW, that will amount to a sizable amount every year......... like you said, to cover unforeseen expenses with cash rather than credit.  Great reminders and encouragement, thanks so much!

  • Its amazing, Julie (conradsmom) that the same creditors with which I have accounts enrolled in the program frequently send me credit card offers these days.   I would guess (given my friend Reva's experience) that they would decline me too.   I love getting them in the mail, ripping them into pieces, and slam dunking them in the trash.  Instead of watching my credit card balances grow, now I get to watch my savings balance grow!  :)  Thanks for your comment and kind words!

  • All of this is well & good, however, we want to buy a house and if our credit goes down and right now our credit shows that we are in a credit management program, how do we make things better so we can get a house?

  • I've read that it is possible to be approved for a mortgage while enrolled in the DMP.  Here's two links for you:

    1.) Link that gives tips on how to improve your credit score:

    www.myfico.com/.../ImproveYourScore.aspx

    2.) Link  to a thread in the Community Forum where Coach Tammy describes a letter you can get from CareOne that describes your payment history to the DMP that can help in being approved for a mortgage:

    community.careonecredit.com/.../29857.aspx

    Hope this helps!

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