Contact a Kansas City Bankruptcy Attorney to Discuss Your Options
A popular debt relief option many try is debt management. A debt management company may be able to assist you with creating a workable budget and negotiating debt with your creditors. A debt management company that advises you to stop making your payments to creditors stating it will put you in a better negotiating position are asking you to ruin your credit score. Every account you stop making payments on are negative accounts and will be reported as negative accounts for the next 7 years! These negative accounts will have a significant negative impact on your credit report and therefore your credit score. The debt management company has just placed in you in a very bad situation.
If it sounds too good to be true, it probably is!
Reputable non-profit companies will help you not miss a payment. You want to ensure that the company is going to take over your payments immediately, so no payments are missed. As long as you can continue to pay your debts on time through the credit counseling company your accounts will be reported as current. Settling accounts can hurt your credit scores; however, the negative impact may be less than a bankruptcy filing.
The State of Kansas, Office of the State Bank Commissioner, has a List of Approved Registered Credit Services Organizations. These are the only organizations that are authorized to engage in debt management services with Kansas residents.
The State of Missouri residents need to search for debt management companies through the National Foundation of Credit Counseling.
A status statement will be added to your credit report accounts stating “paid through DMP.” Creditors will know you paid your debt through a Debt Management Plan and did not actually pay as agreed.
If your accounts are closed while you are paying back the debt, you will lose the positives of demonstrating you are managing your credit.
Contact us for your free bankruptcy consultation to determine if bankruptcy is the right option for you.