Watch Out for Debt Management Plans
Some companies offer budget and financial-management education. Customers may sit down with a counselor and draw up an "action play" to get out of debt. More often than not, however, the counselor will suggest a Debt Management Plan, or DMP. Through debt management plans (DMPs), a consumer sends the credit counseling agency a lump sum, which the agency then takes their fees and distributes the rest to the consumer’s creditors. While enrolled in the DMP, the counselor supposedly negotiates with the client's to waive fees and to lower interest rates. Consumers also gain the convenience of making only one payment to the agency rather than having to deal with multiple creditors on their own.
Because DMPs are the primary, or even sole, source of revenue for most agencies, there is a built-in bias toward enrolling consumers in these plans. However, particularly early on in the development of the industry, most agencies offered services other than DMPs as well. Agencies often used excess revenues from DMPs to fund these other services, including counseling for consumers who were not enrolled in DMPs and consumer education seminars and courses. Despite growing financial problems, many agencies still offer a wide range of services. In fact, agencies should only be granted non-profit status if they provide meaningful educational services and meet other I.R.S. requirements.
*For all consumers
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*Coming Soon
Mortgages
- Mortgage eligibility
- Loan to Value
- Mortgage Insurance
- Rent/Leases
Insurance
- Insurance premiums
- Car Insurance
- Home Owners Insurance
- Why it matters
Employment
Interest Rates
- Mortgages
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- Credit card
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How to Read a Credit Report
- What is a Credit Report?
- The History of Credit Reports
- What Makes Up a Credit Report?
- Credit Reporting Agencies
- How Do Items Get Reported?
- How Long Are Items Reported?
- Serious Errors in Credit Reporting
- Which Inquiries Hurt and How Do They Get on My Credit Report?
- Prescreened Credit Offers
Obtaining Your Credit Report
- Your Right to a Free Credit Report
- How to Obtain Your Free Credit Report
Mechanics of Credit Scoring
Members Only
- Why Credit Scores?
- Who is FICO?
- Fair Issac Corporation Speaks Out
- Credit Card Debt Affects Score
- How Do Inquiries Affect Score?
- Different Types of Scores
- What is a Good Credit Score?
Obtaining Your Credit Score
- Online Vantage Scores Are Insignificant
- Types of Scores That Matter
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Credit Management Principles
- How Many Trade Lines Should You Have
- Recentness of Account Activity
- Length of Payment History
- Managing Revolving Debt - Credit Cards & Lines of Credit
- Late Payments – What You Need to Know
- How Inquiries Affect Your Score
- Paying Collections or Defaulted Accounts
- Your Debt-to-Income Ratio (DTI) Impacts Loan Approval
Credit Restoration
- What is Credit Restoration?
- How Credit Restoration Works
- Consumer Dispute Statements
- About Judgments & Tax Liens and Restoring Your Credit
- Comparing Credit Repair Companies
- Rapid Rescoring Can Be A Quick Fix
- Fair Credit Reporting Act (FCRA)
- Fair & Accurate Credit Transactions Act (FACTA)
- Credit Repair Organizations Act (CROA)
Establishing Positive Credit
- Why Establish New Accounts?
- How to Establish New Accounts
- Active vs. Closed Accounts
- When Not to Apply For Credit
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Debt Validation
Members Only
- The Debt Validation Process
- Prove a Debt Collector is in Violation and Win $1000
- Do's & Don'ts of DV
- Pro's & Con's of DV
- Sample Letters
Debt Settlement
Members Only
- Hiring a Debt Settlement Company - The Fees
- Hiring a Debt Settlement Company - The Risks
- The Debt Settlement Process
- Pro's and Con's
- Do's and Don'ts
- What is Your Best Option?
- Sample Letters
Credit Counseling
Members Only
- How Credit Counseling Works
- Why Most Plans are Bad
- Warning Signs - Tips for Consumers
- When its Appropriate to Utilize Credit Counseling
- How Does Credit Counseling Compare to Chapter 13 Bankruptcy?
- Impact on Credit Scores and Financing Approval
About Chapter 7 Bankruptcy
- What it is
- How it works - rules
- How it works - process
- Should you file for bankruptcy?
- Impacts of bankruptcy on your credit report and score
- Reaffirmation - assets you want to keep
- Common mishaps and selecting a good attorney
About Chapter 13 Bankruptcy
- What it is
- How it works - rules & process
- Should you do it?
- Impacts on credit
- Paying off early
- Compared to chapter 7 - pros/cons
Collection
- How it happens
- Your rights - FDCPA
- Statute of Limitations - by state
- What to do if you are harassed
- Impact on credit
- How they affect mortgage financing
- Paying collections - do's and don'ts
Charge-Off & Profit/Loss
- What it is
- How it works
- Impact on credit score and financing approval
- Affect on mortgage financing
- Paying charge offs - do's & don't
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Judgment
- What it is
- How it happens
- What to expect and do if you're served with a law suit
- Impact on credit
- Garnishments
- Satisfaction - payoff recordings
- Impact on real estate and mortgage financing
Tax Lien
- What it is
- How it affects financing
- Impacts on credit
- Satisfying/release - get & keep your proof
Child Support
- What it is it?
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Foreclosure
- What it is
- Impact on credit
- Stopping foreclosure
- Deficiency judgments
- Sample letters
Repossession
- What it is
- How it works
- Impact on credit
- Deficiency judgments
