| No, because with a Debt Management Plan you're | | | | and will lower your scores. |
| showing a good faith effort to repay the debt through | | | | Be aware that the best, most reputable credit |
| voluntarily seeking credit counseling and setting up a | | | | counseling agencies are free. They will help you |
| budget for repayment of the entire balance due. | | | | explore your options and decide if a Debt |
| Under bankruptcy you are either wiping out the debt | | | | Management Plan is right for you, or if bankruptcy is |
| entirely or setting up a payment plan to pay less than | | | | the only answer. If you do choose bankruptcy, then |
| the balance owed. | | | | you'll also need a qualified bankruptcy attorney. |
| Your credit report may contain a notation that a | | | | Bankruptcy will remain on your credit report for 7 to 10 |
| certain account is under such a plan, but if you come | | | | years, depending upon which type of filing you qualify |
| to an agreement with a creditor and then hold up your | | | | for. By contrast, a Debt Management Plan will be |
| end of the bargain, your credit scores may not suffer. | | | | erased from your credit report as soon as you have |
| How much a Debt Management plan affects your | | | | things under control and exit the plan. Even if you've |
| credit score will depend upon whether your lender | | | | posted some late payments as a result of the |
| marks your account as late. In some cases that will | | | | bookkeeping glitches we mentioned, those fade over |
| not be because the lender is unwilling to work with you, | | | | time and lose significance when followed by on-time |
| but because he is unable to alter the way his billing and | | | | payments. |
| reporting system is set up. | | | | This alone could be a deciding factor if you plan to buy |
| For instance, your lender may agree to a reduced | | | | a home any time within the next 7 years. Having the |
| interest rate or reduced payment amount, but if the | | | | bankruptcy on your report will keep your scores low |
| software he uses won't allow the change, it might | | | | and could cause you to pay as much as a couple |
| automatically report your payments as insufficient. | | | | percentage points more in interest, if you can even get |
| Another occurrence that could hurt your credit scores | | | | a loan. |
| is getting involved with the wrong credit counseling | | | | In today's tight mortgage market, only those with the |
| agency. While you make payments to the agency to | | | | best scores are qualifying, so it is in your best interests |
| disperse, not all agencies send out payments on time. | | | | to make decisions now that will affect your credit |
| Every late payment will appear on your credit report | | | | report and credit scores most favorably over time. |