Chase Credit Card Debt Management Program
In my, I outlined the many benefits you get from working with a credit counseling agency. But there are also drawbacks to enrolling in this form of debt consolidation. And the concerns are not minor, which is why the word WARNING is capitalized. There are many debt relief options discussed throughout the CRN website, and each should be weighed by the benefits and drawbacks, set beside what you’re able to afford to commit to. Many people fail and drop out of credit counseling debt management plans (DMP), and direct from the creditor hardship repayment plans.
Additional financial pressures that can come along after you start a DMP are certainly a leading cause of having to cancel out of a plan. But over the years that I have been working with people who drop out of credit counseling, I have formed the opinion that about half of them should have never even signed up. Understanding why you may want to avoid a DMP, and a comprehensive understanding of the alternatives available to resolve credit card debt, can help you avoid becoming a debt consolidation plan statistic. Credit Agencies for Helping Manage Credit Card Debt Credit counseling is one of the least confrontational ways to get credit card debt relief. It is the safe thing for financial professionals to reference on line, on TV and radio, in print, or in person. The nonprofit debt consolidator helps you pay your full balances back to creditors, which is the right thing to do when that effort does not cause harm to you or your family. There is also the sense of obligation for paying back debts.
But blanket encouragement to seek out advice from consumer credit counseling services is, in my opinion, done out of laziness and/or a complete lack of understanding of how the repayment plans are structured with limited application and suitability. Roughly 70% of people who call in to speak with a credit counselor cannot qualify to be served by a credit counseling agency. The formula I provided in the first article in this series, and that is repeated a bit differently below, can show you in less than 5 minutes that credit counseling is not a good option for you, or how your budget is a good fit for using a plan to get out of credit card debt. Mainstream media and financial pro’s waste the time of 70% of consumers they send to a credit counseling company.
That waste is also enjoyed, at the same rate, by the credit counselors picking up the phone on the other end. I can understand why people lean toward credit counseling instead of facing the reality that bankruptcy could be a better option, or that you may have to gut-out dealing with debt collection calls for a while, until you can settle your credit card bills. But I want to help you avoid wasting time and money committing yourself to a debt solution that can be identified upfront as not workable for you. So let’s dig into credit counseling program drawbacks. Missing Payments in a Debt Management Plan If you agree to a monthly consolidated payment and start working with a credit counseling agency, but you later are unable to pay on time, you can lose the benefits you get from being enrolled in the plan. After missing a payment to the counseling agency, you may be able to get a creditor to give you a second chance, but not all will. Third chances are very rare.
Chase might take you to the court and get a payment plan fixed by the judge. Wages cannot be garnished in Texas for unsecured debts. Since you are not able to afford the payments because of high interest rate, consider a debt management program. Nov 09, 2010 When WalletPop asked Chase about this, a spokeswoman said via email that some people who are in too deep with their debts may be referred to a credit counselor instead of being given access to the hardship program. For people like Cheryl, a debt management plan created by a nonprofit credit counseling service is a better option, says GreenPath's O'Brien.
If you lose the lower payment benefit, you may find you are back where you started, but with somewhat lower balances owed on the accounts – depending on how long you were making payments. If you make your new lower monthly credit card payments in your DMP for any significant period of time, and are suddenly unable to continue, you will have wasted time and money – both are a precious commodity in debt relief. Wasting months or years in debt consolidation that ultimately does not work can be avoided.
For example: You have $20,000.00 in unsecured debts and you are able to get your monthly payment down to $400.00 by enrolling in a credit counseling service. You make payments for 6 months, but then something unexpected occurs preventing you from continuing with the plan. You will have paid $2,400.00 over those 6 months. That money could have been used to help fund one or more negotiated settlements, or more than covered the costs of a.
Enrolling Collection Accounts with a Nonprofit Agency Depending on how long an account went delinquent before enrolling with the credit counseling service, and whether your account was with a debt buyer at the time you started your DMP, missing a debt management plan payment may mean losing interest rate benefits and having them reapplied retroactively. I do not advise enrolling charged-off credit card debts (typically accounts that are 180 days past due) into a credit counseling service unless, or until, there are more conforming account treatments when accounts are already placed with outside collectors. There are clearer benefits to using placed with a collection agency or sold to a debt buyer. It is also important to note that not all credit counseling agencies train their counselors to understand collection accounts.
Credit counselors are certainly not trained to help you understand alternative and creative ways to manage collection accounts at the same time you are dealing with accounts not in collection. This fact leads me to the next warning. Debt Consolidation with Credit Counseling Fits in a Box Debt management plans are not creative. They fit into four corners and cannot step out.
Depending on your perspective, this fact can be seen as a major strength, or a huge weakness. I see it as both. The limitations on who can budget to repay their debts through a counseling agency make the lines less blurry for you, and for the counselors that pick up the phones at these companies when you call in. A counselor cannot enroll you into a plan when it is obvious you run out of money before you run out of month (income is not enough to cover your monthly expenses and pay back your unsecured debt – like credit cards).
This means calling a credit counselor can help you learn whether you qualify for debt consolidation, or can quickly cross it off the list of your available debt relief options. There is nothing wrong with not qualifying for a DMP with a counseling agency. Knowing it won’t work for you means focusing on something that will. Banks have preset criteria they give to the credit counseling companies who screen your income and budget to fit the lenders standards for payment and interest rate reduction. This is an unfortunate inflexibility. The preset criteria that are programmed into an agencies computer system only allow so much left over money each month. One bank may say they will reduce interest on their credit card to 6% if you have $300 left over after all bills are paid, while another bank won’t lower your interest rate much unless your budget shows you have $150.00 dollars left at the end of the month.
If you are only marginally suited to sign up for a credit counseling services debt management plan, or have a fluctuating monthly income that makes your monthly budget more like guess work, than credit counseling repayment plans may not be right for you. Going ahead with one, when you are only left with something like $100.00 each month after your bills are paid, means you are one flat tire away from failing in the plan. Should you still speak with a counselor and do a full income and budget analysis?
Call 888-317-8770 to speak with a counselor today. There may be special reductions available with some of your creditors that you would not have learned about otherwise. There is no other way to get an accurate lower monthly payment quote.
With very little time invested, you could learn that credit counseling has solid potential to help you with your debt, or end the call knowing that the option cannot work for you – allowing you to cross it off the short list of debt solutions. You can save yourself (and a credit counselor) time by using the example I gave in the first article on credit counseling to determine if your budget and bills are just too far gone. The counselor you speak with is pretty much only going to offer details about what a debt management plan will look like for you.
They are not allowed to cross into other debt solution territory like and debt settlement. So do not rely on them for feedback on your remaining options if a DMP cannot be offered to you. Can a Credit Counseling Service Help You? Credit counseling services have worked for millions of people over the years. There are many hundreds of thousands of people succeeding with their debt management plans while you are reading this. All of this detail should help you understand what credit counseling is, how credit counseling works, and whether it is an approach you can use to get relief from your debt. If you reach out to speak with a credit counselor at this point, it should be because you know you can budget between 1.7% and 2.5% of your combined credit card balances (and other unsecured debts), as your new lower monthly payment.
If you are faced with a situation where something has got to give in order for you to resolve your debt, you will find limited options. These options consist of the kinder, gentler, and non-confrontational approach of credit counseling, all the way to bankruptcy.
A good place to start learning is speaking with a certified credit counselor. If you would like to connect with a credit counseling services provider with high standards for customer satisfaction call 888-317-8770 and speak with one now. If you have questions or concerns about working with a credit counseling service, or are working with one now, post in the comments below for feedback. Hey Michael, We have some debts we are considering doing a debt consolidation for with a company. We have about 45k between credit cards and loans, one of our debts is a $12500 navy federal credit card.
We do not have any auto, or mortgage loan with them. We do however have a checking and savings. My concern is if we do a debt consolidation that includes the navy federal we will be cut off from all navy federal services forever. (I know that if you do bankruptcy with a navy federal account you are completely cut off. ) just not sure how it works with if you use debt consolidation with them. Credit is obviously not very good with a high d to i.
Thanks for any help you cns give 🙂. There are different ways to define debt consolidation. Are you consolidating your payments into one lower payment through a nonprofit counseling agency? Are you working with a company that tells people they do debt consolidation when they are actually offering debt settlement? If you are consolidating for a lower monthly payment because your interest rates are being reduced you will have no problem with Navy Federal. If you are stopping payments in order to later settle with your credit card banks for less than what you owe, you could see Navy Federal limit your future ability to work with them. If you cannot afford your bills try not to get hung up on whether you can get new loans later on from a bank you settle with.
There are many banks to choose from that compete for your business. Meeting your immediate and future financial needs by choosing the right debt relief path is the priority. I have roughly 6 months to go to finish my debt program. I have paid off over 50,000 dollars which seems like a miracle.
It has been hard, I have readjusted payments and unloaded one account owed to B of A who did not accept the terms my program offered. This is because I had already been in a debt program directly with B of A. Therefore going through finishing paying them off with the DMP would have me taking longer than Bof A would agree to.
At any rate, I find myslef tempted to see if I can negotiate paying the rest of my debt directly with my creditors and take a bit longer to settle my debts. Reason for this is I owe the IRS for a past year’s filing and am afraid I will owe this year as well. I am wondering if this is a practical idea? In hindsight I should have commited bankruptcy. We have ZERO savings. I am 55, have college age kids and the money I would have put aside if out from underneath the debt would have been some kind of savings plus for my kid’s to go to college, our health care, and so on.
Is it worth trying to renegotiate now? And the other B of A account is with a collection agency now. I am proud of how much debt I have paid although when I realize over these years I have paid the DM company about 1600 dollars that kind of stinks. Although I understand their negotiations spared me far worse I guess. I would want to find out what the damage is with the IRS before I stop using the debt management company.
You can end your enrollment in the payment program pretty easily. Having worked this hard to pay off what you have, it should be a source of pride, so be sure to contact your creditors and continue with the payments yourself. Don’t beat yourself up over not doing the bankruptcy. You may not have qualified for a chapter 7, or may have been forced to liquidate things you would have preferred not. What is your plan for the Bank of America account that is now in collections? I am under a DMP, America Consumer Credit Counseling, we agreed to pay them $340 per month for aproximately 4 years; we are half of the way but not even the smallest credit card is paid off (the original amount was $450.00 and now is $240.00). The original debt total was $11,500.00, but the payments made so far to ACCC add up to $10,500.00.
As you said in the article it was a waste of money and effort, now I would like to decline their services and deal with my creditors directlyIf you look at all the staments, ACCC sent the payments to the creditos late, besides they took my money on time every single monthWhat would you recommend I should do???? Hello, I am under a debt management plan (DMP -National Budget Planners-).
Bank of America has been paid by the plan for 15 months. For some reason they have not agreed to the plan; the DMP told me I was allowed to keep one credit card for emergencies, other than that I closed all my accounts. Yet BofA continues to charge $35 / month for late fee and full interest. I have amassed more charges than when I began the DMP. When I call BofA, they won’t talk to me because the account is being handled by a DMP department. When I talk to the DMP they say BofA keeps denying the Plan because I have to close all accounts.
I have since closed any accounts that were zero balances after obtaining my credit report (these were old accounts that I did not know were still open and accounts with less than $100 that the PLAN originally said I could just pay off since they were so small). BofA still has not agreed to the PLAN.
Meanwhile all 8 other creditors of mine are on the PLAN and over the last 18 months have been cut in half; as an example one card went from $11,000 to $4,800. EXCEPT my BofA card which has increased. I just checked my credit report and BofA has now entered a “charge off” on my record. Do I have any rights to sue? I know they can enter a charge off because the payments the DMP has been paying them is less than the minimum payment but they have been collecting from the DMP, and have refused to speak with me when I call because I have a debt manager. I am always told I have to call my debt manager.
I’m feeling like I have no control over this situation. The DMP you are on with the credit counseling agency, National Budget Planners, is based on voluntary participation. Creditors like Bank of America, Chase, Wells Fargo and others, will all have set criteria for what they approve. BofA has one of the stricter guidelines for disposable income (money left after all bills and living costs are met), and can be obstinate in other ways too. What was the balance owed on the account that you left out of the program? What was the balance on your BofA account prior to starting work with the credit counseling company, and what is the balance on that account today? Suing BofA is not worth any cost or effort in my opinion.
The credit counselor did you no favors. My guess is that they did not try all that hard to rectify the DMP acceptance with BofA’s correspondence department.
And continuing to pay BofA an amount not agreed upon, while being charged late fees, only to now have the account charged off and placed in BofA’s collection pipeline means the money was pretty much a waste. I am sure you could have come up with more creative uses, like paying down other debt faster. At this point I would encourage you to negotiate a settlement with whatever collection outfit gets your account? Have you heard from any debt collector by phone or mail about this account?
If not, call BofA and ask who they placed the debt with. Post what you learn and lets go from there. I do know of instances where credit card interests rates lowered by working with a credit counseling agency, were increased to a higher interest rate than what the card was at just prior to starting a debt management plan. The most recent example of a file I have worked where this occurred was several years ago, and before the CARD Act went into affect.
The Card Act put an end to arbitrary interest rate increases unless you fall behind with a credit card payment by 2 months or more. In other words; Wells Fargo or Chase cannot just wake up one morning, stub a toe on the way to the coffee pot in the kitchen to start the day off wrong, and show up to work and increase credit card interest rates on someone making on time credit card payments to Chase, but late on a payment to Citi Bank by a month. This scenario for increasing credit card interest rates would have been okay prior to the changes brought by the CARD Act.
If you quit or drop a credit counseling program, and take over payments on your own, it will likely be because you are out of the woods with debt, or have bounced back enough from a financial set back, that it makes sense to stop the DMP. Otherwise, you would stick to the credit counseling plan.
The warnings about going with a credit counseling company are good to know. I am pretty sure I can swing the payment if a credit counselor can get my monthly credit card payments lowered in the way you described in the previous article I just read about credit counseling. But what happens if I stop the credit counseling program, not because I cannot pay anymore, but because I want to? Can I still keep making the same payments to my credit cards?
I have Bank of America, 2 Chase credit cards, Target, Discover, my gas card I guess is with Citibank, Macys, and the Credit Union Visa I want to keep that I mentioned in the other comment from the page before this one. Do these banks work with a credit counseling service and then work with me like that later if I quit? Committing to a credit counseling program is something you want to be sure you can manage up front, and it sounds like you can. You are not beholden to the repayment program. You can drop it at anytime.
Many do indeed drop from a credit counseling program, and for the 2 reasons you pointed out. Because something happens that sets you further back financially making it impossible to continue making even the reduced credit card payments through the credit counseling program. You have bounced back enough financially where you are able to manage better and can pay the remainder of your debts on your own without the help of a credit counseling program.
If things are moving along just fine, and you can stay on track with the debt management plan, dropping the program is not a problem. You may not be able to maintain the lower interest rates the credit counseling company got for you with Chase, Bank of America, Discover, Target and the rest. But that may not mean much depending on how long you were working with credit counseling. If you were working to pay off the credit cards on the DMP for say 3 years, than the balances on all of these debts will have been paid down quite a bit. Some of the smaller balances you mentioned in your other credit counseling article comment, and this one, like Citi bank and Macys, may even have been paid off by then. Credit counseling services help when you need it, until you do not need it, or when you cannot keep up payments and are forced to consider other alternatives.
From Bills.com – Q. I am Drowning in Credit Card Debt. Chase is My Largest Creditor.
Is there a good Chase Debt Consolidation Program? Thank you for your question about your credit card debt, specifically your Chase credit card debt, and whether there is a Chase debt consolidation option or other solution that will help you. Chase is a full service bank, offering a variety of services including checking and savings accounts, credit cards and a Chase mortgage department. Chase is not currently offering unsecured debt consolidation loans. Self-Help Communicate with Your Creditors If you are struggling to pay your creditors, a good first step is to maintain communication with them. Call your creditors directly, before you miss any payments.
In your case, you should call Chase and your other creditors, to see if they offer a financial hardship program that may give you some temporary relief. Ask for an interest rate reduction or permission to make a smaller than normal minimum payment, so you can avoid suffering late fees or a hike in interest rates. Balance Transfers If your credit is in good standing, look into a balance transfer offer as a debt consolidation solution. Use a balance transfer to move as much high interest debt as you can into a lower interest rate account. Be aware that balance transfer offers come with a low, introductory ‘teaser rate’ that adjusts to a higher rate, after the introductory period ends. It is up to you to know how long the low-rate period lasts and what your interest rate will be after the low-rate period ends. Collections Process If you default on your Chase account or with your other creditors and you are unable to work out a solution with them, you will end up in collections.
Not every creditor treats all delinquent accounts the same and even individual creditors treat different customers differently. However, there are some basic strategies and practices that Chase and other creditors employ with their delinquent customers:. Most creditors first attempt to collect a debt internally. If not successful, they refer the account to a law office for collections. Some creditors use in-house legal departments to collect on the debt, though that is becoming less common.
In general, accounts are referred for legal collections after they are somewhere between six and nine months delinquent, depending on the creditor. Creditors have thresholds for identifying the accounts they decide are worth pursuing by legal collections. The amount owed and the state specific collection laws being primary considerations. Creditors are less likely to engage in legal collections, for example, in states that don’t allow for wage garnishment, such as Texas, Pennsylvania, North and South Carolina. Your recent activity on your account can affect the collection process.
Some creditors pay close attention to your specific account activity, when deciding whether to pursue legal collections. For instance, Chase, Bank of America, and Citibank pay less attention to recent balance transfer activity or cash advances than do American Express or Discover. Eventually, your account may be sold to a debt collector.
Creditors that are unable to collect anything after your debt has been contracted to a law office usually sell the debt to a debt purchasing collection agency. This frequently happens approximately 18 to 24 months into the collection process. Outside Help If Chase or your other creditors are not willing to work with you, your best debt relief solution may be to work with a professional debt relief organization, such as a credit counseling firm or a debt settlement firm. Before you choose the right way to solve your debt problem, it can be very important to understand how your specific creditors work with their customers.
That way, you can plan the most effective strategy for getting out of debt. Bills.com’s editorial staff has done extensive research to provide you with some specific facts about Chase and how it deals with accounts enrolled in debt relief programs. Chase Debt Consolidation & Credit Counseling If you enroll a Chase account in a credit counseling’s debt management program, you should expect:. A monthly payment that is 2.00% of your account balance. A minimum monthly payment of $15. An interest rate of 6%. If your rate is at or below 6%, not only is there is no reduction, but your rate will be increased to the 6%.
If you have a card with an interest rate below the one the DMP will put in place, you can try keeping the card out of the program, but most DMPs require you to place all of your cards into their program. Chase & Debt Settlement Debt settlement is an option to consider.
Chase Credit Card Debt
When you are experiencing a serious financial hardship. Debt settlement is an aggressive form of debt relief designed to get you out of debt in 24-48 months. For the program to succeed, you need make the monthly program payment, which is usually significantly less than the current monthly minimum payments that your creditors require. Bills.com reviewed hundreds of settlements reached by professional debt settlement negotiators for the client’s Chase account. The average settlement negotiated was less than 50% of the balance that the clients enrolled in the settlement program. Individuals are free to negotiate settlements directly with their creditors, but many people find it well worth the fee to hire a reputable and experienced settlement company, especially when they pay no up-front fees to enroll in the right debt settlement program.
To avoid up-front fees, Bills.com recommends choosing a debt settlement firm that is a member of the (American Fair Credit Council) and has debt consultants that are accredited by the International Association of Professional Debt Arbitrators). Chase & Legal Action Chase is not known as the most aggressive creditor, when it comes to taking legal action against delinquent debtors, but it is not the most lenient either.
Chase usually waits 6 months after the first delinquency before referring its accounts to outside legal collections. Not every account that is 6 months late will be sent to collections.
Obama Credit Card Debt Program
Chase reviews the size of the debt owed, the state collection laws where the customer resides, and whether the customer’s employment history and assets make collection likely. Chase currently uses an internal legal department to collect some debts in California, New York, New Jersey, Florida, and Illinois, although it also contracts with outside collection law offices. Recommendation Bills.com recommends that you look into all your debt relief options, before making any decision, in order to weigh all the pluses and minuses that come with each solution. We strongly recommend Bills.com’s free tool, which received positive reviews from both the and from.
Chase Credit Card Debt Settlement
Debt Coach allows you to easily go over all your available debt options, based on the goals and priorities that you specify, giving you a realistic estimate of how long it takes to get out of debt and what your total costs will be.