I wanted to share my experience for anyone facing a similar situation, and so far it has been overwhelmingly positive!
We’re a dual-income family making around $90k a year, and we have just under $42k in credit card debt across 17 cards, with minimum payments averaging about $1,400 a month, all with 100% or more utilization.
Initially, we considered bankruptcy, but since we’re in Kentucky, where filing is quite challenging, we were uncertain about keeping some assets, including equity in our home. We also explored consolidation options but found that while they offered similar monthly payments to what Family Credit Management (FCM) proposed, they would significantly harm our credit and provided no guarantees of improvement.
to explain FCM briefly, they’re a non-profit organization that doesn’t consolidate debt but negotiates with credit card companies to lower interest rates and establish repayment plans. Some of these plans may be available directly from your credit card company without needing a credit management service. If you decide to leave the program, there are no penalties, and their documents provide more information on this.
With FCM, your accounts won’t go to collections. Once a payment plan is set, the card is closed, which has a minor effect on your credit.
I contacted FCM on a Friday evening, and they replied Saturday morning with a quote. They offer communication via email, text, or phone, and you can choose which methods you prefer. So far, I’ve only used email and text to communicate.
They provided an itemized list detailing estimates for all 17 accounts based on the initial program response. Interest rates dropped from 0% to 9.9%, along with estimated monthly payments for those rates. The quote included a $75 setup fee and a monthly fee of $50, with potential for those fees to be lowered or waived based on income or personal circumstances.
Our initial quote was $872 per month, or $436 if split into two payments, including the $50 monthly fee. We accepted this offer and signed a DocuSign document that included additional details, allowing us to select our payment dates. A few days later, we received login information to monitor our accounts online.
We were informed to continue making payments on our cards until the first payment was sent to FCM. After that, we stopped paying the cards directly. They warned us about two accounts that might take longer to respond, so we kept paying those until we got confirmations.
Once our first payment was made, the process began right away. About half of our accounts accepted the new terms and sent us documents confirming the new interest rates, monthly payments, and the closure of the accounts. This was crucial for us because our budget couldn’t handle paying an $800 monthly payment alongside our minimum credit card payments.
The other half took longer to respond or sent counteroffers. Three accounts requested slightly higher monthly payments, which FCM asked us to confirm we could manage. These increases raised our monthly payment from $872 to $882.
For two accounts, we made an additional payment as instructed by FCM due to slow responses. These were the accounts FCM had warned us about, taking about 30 days to accept the program.
In the end, we achieved over $500 in monthly savings, with all cards expected to be paid off in under 60 months. All accounts are now closed, and since our credit was already not great, this closure didn’t impact our credit score much.
I hope this helps someone in a similar situation! I’m happy to answer any questions based on my experience.