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Debt consolidation companies - 10/27/2008 9:09:56 AM
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deliveredarling
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A friend of mine is considering using a debt consolidation company to lower his monthly payments and reduce the interest rates on his cc. I don't know anything about them but it sounds like a good idea verses filing for bankruptcy. Does anyone out there know about them? Are they good or bad? Are there any recommendations I could pass along to him? Thanks in advance.
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RE: Debt consolidation companies - 10/27/2008 1:00:55 PM
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Ps103
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Is he behind now?
He needs to make really sure that the consolodation company does more than just stop paying on his accounts and then settle with the creditors, which is what most of them do. This is a bad or worse than BK, and it destroys your credit.
Also, when you get a creditor to settle for less than you owe them, the part they write off is considered income to you for that year, if I am not mistaken.
There are some credible companies out there. He can call CCCS in Atlanta and they can put him in touch with someone in his area. CCCS is legitimate.
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RE: Debt consolidation companies - 10/27/2008 1:33:50 PM
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DeeAnnBailey
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Agree with all Ps103 said, also many creditors will make arrangements to reduce interest themselves with the debtor if they call and explain the situation to them. CCCS is great but be wary of many of these companies.
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RE: Debt consolidation companies - 10/27/2008 5:29:31 PM
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Lady_of_Faith
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A close friends of mine tried a debt consolidation company for the same reasons as the OP's friend. After a while, she couldn't keep up with the payments, thus having the account with them closed and being back on the creditor's list with the phone calls for payment.
So, she filed bankruptcy. After a couple of years of paying her bills on time, her credit score improved and she has a clean slate (well, sort of). I heard that some debt consolidation companies will show a chapter 11 or 13 on your credit report anyway if you decide to use their service.
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RE: Debt consolidation companies - 10/27/2008 6:02:02 PM
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deliveredarling
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Thank you for your answers. It sounds like that's probably not the best route for him to go.
CCCC sounds like his best option. I'll let him know.
_____________________________
"Now no one after lighting a lamp covers it over with a container, or puts it under a bed: but he puts it on a lampstand, in order that those who come in may see the light."
Luke 8:16
http://www.myspace.com/egaip
Come visit
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RE: Debt consolidation companies - 10/28/2008 9:50:04 AM
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Row1
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debt consolidation company: maybe, maybe not.
but if he has not gotten in control of his money management, it will be a wasted effort in the long run. and you will get your feelings hurt because you cared and helped and he will be in the same position again.
there is the income, and the outgo. if outgo exceeds income, trouble is coming.
does he still have and use credit cards?
does he have a written budget for each month, with every dollar devoted to some budget area?
if so, you could review this with him, and see how much "disposable" income he has. from that, you can look at his debts, and figure out whether his current plan can keep pace with, or outpace, his snowballing debts.
has he found a second job? is he working a plan to get a higher paying job?
if someone has chronic headaches from hitting themselves in the head with a hammer, it is gonna be a waste of time to pour your concern and energy into helping the person decide whether they should take advil or tylenol.
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RE: Debt consolidation companies - 10/29/2008 10:37:42 PM
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MrsTracy72
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We used a company called Take Charge America. They are always helpful when we call, all of our payments get made on time and they work with us if we have a month that we can't afford a payment. But we have been on the program only two years and have paid off more than half our debt.
NEVER settle and if you can avoid bankruptcy, do so. That stays on your credit just as settlements do. Credit counseling shows up on your credit report that you are paying through a third party, but once you pay off all of your bills or quit the program, that comes right off of your credit. I raised my credit score over 200 points and now I still have to finish paying, but my credit score goes up month by month. I love it.
As for not being able to afford the payments, ANY company you go through should tell you your monthly payment up front and if there are any fees that they charge. If you know the payment is too high, then bankruptcy is probably the best bet, but if you can squeeze out that payment, not only will you pay your bills in full, but you will have totally fulfilled your financial obligations to the credit companies.
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RE: Debt consolidation companies - 10/30/2008 7:58:38 AM
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DeeAnnBailey
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quote:
ORIGINAL: MrsTracy72
We used a company called Take Charge America. They are always helpful when we call, all of our payments get made on time and they work with us if we have a month that we can't afford a payment. But we have been on the program only two years and have paid off more than half our debt.
NEVER settle and if you can avoid bankruptcy, do so. That stays on your credit just as settlements do. Credit counseling shows up on your credit report that you are paying through a third party, but once you pay off all of your bills or quit the program, that comes right off of your credit. I raised my credit score over 200 points and now I still have to finish paying, but my credit score goes up month by month. I love it.
As for not being able to afford the payments, ANY company you go through should tell you your monthly payment up front and if there are any fees that they charge. If you know the payment is too high, then bankruptcy is probably the best bet, but if you can squeeze out that payment, not only will you pay your bills in full, but you will have totally fulfilled your financial obligations to the credit companies.
Great advice and congratulations on reaching the point you have!!!!
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D. Ann Bailey
My Blog Dee's Delights and Delusions
<<<<<<The love of my life - precious Erin!
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RE: Debt consolidation companies - 10/31/2008 12:05:06 AM
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MrsTracy72
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Thank you!
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