What Single Moms Need to Know about Using a Debt Management Service (cont.)
Contributed by Lisa Marie
They claim that although you were and still are paying off your debt, you are being forced to do so and required help with the payments. What this means is that when you go and apply for a loan or credit card from a lender, it looks worse on your credit report than a bankruptcy. When you file for bankruptcy, your credit is wiped off. a bankruptcy takes from seven to ten years to come off of your report.
A debt management service can take almost the same amount of time to come off of your credit, only you have to pay off the entire balance of your service before it comes off. So if the service says it will take 48 months to pay off, add another seven or so years to that before it comes off of your credit report as a negative.
What to do if you've already signed with a debt management service
Get a copy of your credit report first. Look at what the notes are from your creditors. If it says something like "Under credit counseling, then you probably have a problem. Consult a financial specialist at your bank. They can probably redirect you to a loan specialist, possibly able to refinance your current mortgage, or perhaps even get a home equity loan.
