I'm close to $8500 in credit card debt...and I simply can't afford to make all of my payments every month. I keep paying the minimum and my one card is extremely late and maxed out. I really feel like there is no help.

So, I contacted a debt management company. They set me up with this plan to pay $200/month for 31 months. Which I plan on, hopefully, paying more on it whenever I can. I  havent signed anything yet though.

I'm just really worried about hidden scams. I've done as much research as I can and I've read the policy they sent me. I was wondering if anyone could help me out with this. I don't know anything about it...this is all new terrain for me. The policy said the money I send them every month will be put into a trust account and will then be sent to my creditors. They said they are going to lower everything and pretty much cut down my balance as much as they could. I'm aware that I need to pick a date that my payments won't be late to the companies...I've read all about the processing etc. of my money, to them, to the creditors.

Are they going to strike up some sort of deal with the credit card companies??
Is this just a fancy way of pretty much claiming bankruptcy?...which is something I don't want to do.
Will this hurt my credit score even more??
I read something about reporting anything not paid over $600 to the IRS as income...I dont quite understand this so I am going to call tomorrow.

Any info will be greatly appreciated!! I'm trying to do this all on my own and without any help from family etc. Thanks again!

Run. Don't do it. You could do this yourself. If you pay someone else you will still have to deal with the credit card co calling you. What I would do is stop the payments, at about 6-10 months they will offer or you will offer a settlement.
Option 2 Find a consumer counseling service they will get a smaller monthly payment. You will pay them direct but you will see the payment on your credit card statement. This service will cost about $25-$45 a month.

As for your Credit both options will make your credit take a hit. But you need to get out of dept right now and aquiring more credit and more debt are not good. How much money do you make a month? How much are you working? Any chance on getting more hours or taking a part time job?

As far as the IRS if the creedit card co settle for less than the orig balance, EX you owe $6000 and settle for $3000 The credit card co would send a 1099 form with the $3000 of income to you.. They would send a copy to the IRS as well and you woulsd pay the tax on the $3000 if you are in the 10% bracket that would be $300 but it would be worth it.

I agree with Tomtastic.  Don't use the service.  I have heard that having a debt management company on your credit report is just as bad as bankruptcy.  I also agree that you should look into getting more hours at your job or trying to increase your regular income in some other way.

I'm sure you can find templates of letters online that can be sent to your creditors.  These kinds of letters will explain to them what your situation is like and that you fully intend on paying them back.  The letter almost always includes a suggested payment plan that, although it takes longer, includes payments that are small enough for you to be able to breathe some.  If you choose to stop making payments in hopes they will offer a settlement, be prepared to answer relentless collections calls until an agreement to settle is made.

Finally, if you haven't already, stop using your credit cards.  Put some money aside so that if an emergency comes up, you can pay for it without getting yourself further in debt.  Then cut up your cards and work hard on paying them off.

I agree, Finding a way of getting some extra income (maybe you could find a work from home job) and pay your debts that way. It would be well worth it and a better option than a debt management company.

Firstly DONT DO IT.
Yes they will succeed in getting oyu cheaper paymnets, but they will also succeed in getting oyur accounts closed.
Credit card companies will work with you, just  need to be starn with them and explain your situation.

What I would do is first go through your expenses with a fine toothed comb, and create a budget so you know exactly where all your money is going. You will be suprised what you may find hidden that will give you some extra cash to deal with your debts.

Seconed Focus 100% on eliminating the debts one by one.

How  many CC cards do you  have and what are the interest rates.?

Sometimes CC companies can put your account in foreberance which can help you catch up. 

Need some more direction please feel free to ask.

Good Luck
-G-