Debt consolidation

[Buck531]

So I've been seeing these tons of commercials on TV that say "if you have more than 10k in credit debt, call us now!". They claim that the government is blah blah and this and that.

 

Any idea what they really do? I could call them, but I didn't want to waste my time and have them suck me into something I'll regret.

 

I need to somehow figure out how to pay down on my Credit card debt.

 

It's from years ago and I was spending way more much than I was making. Now I'm in such a huge rut that I could buy a lexus with the payment I'm making on my one credit card.

[Putty]

A lot of them are settlement companies. Meaning you pay this company so much a month. They eventually make a one time offer to one of card companies to settle the balance. This impacts your credit.

[Buck531]

A lot of them are settlement companies. Meaning you pay this company so much a month. They eventually make a one time offer to one of card companies to settle the balance. This impacts your credit.

 

So in a sense it's like filing for bankruptcy?

[V8 Beast]

Like stated a lot of them dont pay the credit card companies until they get all of the money from you. When they get an amount the credit card companies will settle for they pay them all at once. People dont realize that they can do the same thing without a consolidation company... The only catch is that you have to have all the money for the settlement amount at the time its requested.

[Stallion Motorsports1647545491]

rumor is all of the "companies" out there are huge scams! there is no govt cc bailout. read up on any of them you decide to go with. like stated above most of the time you can contact your cc company and negotiate payments with them better than the debt companies. i know cambridge is the big one that gets pimped all the time in columbus. i have had a ton of people i work with try and go with them. they constantly complain of late payments caused by cambridge. They have had all kinds of lawsuits, bbb complaints, etc. http://www.cambridge-credit.org cambridge charges monthly fees, sometimes more than you were paying in interest.

 

they say that a debt management plan doesnt affect your credit...however they will close all your cards once your sign on. good luck, there is nothing wrong with looking for help.

 

tom

[Cordell]

If you're ready to throw your credit away just file bankruptcy. Ask me for details if you want them.

[Buck531]

rumor is all of the "companies" out there are huge scams! there is no govt cc bailout. read up on any of them you decide to go with. like stated above most of the time you can contact your cc company and negotiate payments with them better than the debt companies. i know cambridge is the big one that gets pimped all the time in columbus. i have had a ton of people i work with try and go with them. they constantly complain of late payments caused by cambridge. They have had all kinds of lawsuits, bbb complaints, etc. www.cambridge-credit.org cambridge charges monthly fees, sometimes more than you were paying in interest.

 

they say that a debt management plan doesnt affect your credit...however they will close all your cards once your sign on. good luck, there is nothing wrong with looking for help.

 

tom

 

That's what I was looking for.

 

Anyone have any decent ideas to pay off some debt? Total debt (credit cards) is about 20kish. One payment on one card is now $489 as they jacked my rate to 29.9999999999999999999999999%.

 

I can't do a second mortgage because most places won't give you a loan totaling 100% of the house. I guess I'm kinda screwed on this until I pay off the house a little more.

[Buckeye1647545503]

Buck pm Clay on here he is in this line of work (well money) and is very helpfull I plan to use him very soon to un-fuck my credit if possable

[Bam]

You need to focus on the highest interest card/loan first. Pay the MINIMUM on everything else, and throw all available funds at the HIGHEST interest debt you have. Once you knock that one out, move to the next highest, and so on. Other than that there are no tricks or anything, it just takes time and controlled spending.

 

If you qualify you could try and transfer balances on to other cards in order to take advantage of promo interest rates. Try Citi Card for this, my gf has done this twice on her citicard, but remember, you CANNOT charge ANYTHING else on the card that you use for a balance transfer, because the payments will be applied incorrectly and could screw you. And you need to pay these off in the PROMOTIONAL period or transfer them again, because most times the regular rates are high, like the 29% you have now. Also, NEVER miss a payment on this card, because you could default the rate and lose the promo rate.

[Danielle]

I'm going through this place http:// http://www.cccservices.com/

 

They lowered my interest rates drastically, they charge a small fee (like $15) per month, but they are saving me a ton of money. They consolidated all the debt that I had and cut it in half, I'm almost done paying it off now, a year later. It would've taken me like 3 years to do it. They're really awesome to work with imo.

Edited December 31, 2009 by Danielle

[Buck531]

You need to focus on the highest interest card/loan first. Pay the MINIMUM on everything else, and throw all available funds at the HIGHEST interest debt you have. Once you knock that one out, move to the next highest, and so on. Other than that there are no tricks or anything, it just takes time and controlled spending.

 

If you qualify you could try and transfer balances on to other cards in order to take advantage of promo interest rates. Try Citi Card for this, my gf has done this twice on her citicard, but remember, you CANNOT charge ANYTHING else on the card that you use for a balance transfer, because the payments will be applied incorrectly and could screw you.

 

Citi card is the one's who fucked me to begin with (I fucked myself, but they fucked me by jacking up my rate).

 

That card has a $489 minimum payment. (it's 15k). There's no way I can make anymore on that. All the other cards are minimum payments too.

 

No one will give me any other cards because my debt to income ratio is too large. Tried that already.

[Putty]

I suggest you stop paying on that 29.99999% card, join one if those companies and let them eventually get you a settlement offer. Often times if the company would settle to a lower balance, they will lower the APR quite a bit to get you paying again. Then you beel good. You take a minor hit to the credit, but you save a lot of that acct. Do the same to other cards, too. You choose what Accts you want them to handle for you.

 

This is all if you dint mind a credit blemish.

[JaronsToy]

Did Citi give you a chance to close your account and keep the old rate till payed off ?

[Sam1647545489]

Shawn, you need to talk to Mark(orange TTZo6) or Linn or Jason(yellow TTzo6) They both will tell you any info you wanna know.

[evan9381]

some of you guys need to check your facts.

 

Credit counseling/debt consolidation is WAY different from debt settlement. trust me, i deal with this shit all day

 

consolidation will lower all your rates, and consolidate it into one monthly payment. you can probably get down to single digit interest rates. just do your research and find a company you think fits your needs. remember though to take reviews with a grain of salt, because these are people deep in the hole, and sometimes think these companies are miracle workers, and go in expecting too much.

 

debt settlement is what will fuck you. what they do is tell you to stop paying your bills all together. this is big hit #1. they will have you pay into them monthly, with your first like 4 months going towards their fees. then, you pay them a monthly fee to be in their program. then maybe a year into it, when you have some money saved in your escrow account, they will call and start to try to settle with the companies. by this point though, your account will have already been written off as bad debt. major hit #2

 

with large balances like you're talking about, your credit card company will have probably already started the process to sue you...at least i do after about 30 days after write off (which is once the account goes 7+ months delinquent). their contracts state (albeit hidden), that they can not do ANYTHING to stop creditors from taking action against you. most of these companies if you stick with them long enough to get your accounts settled, most will charge you a fee for how much they saved you.

 

we have a girl at my work who only handles those accounts, and in our monthly meeting, she did a presentation showing scenarios, and she showed us that with average fees you will have to pay (initiation, monthly, % saved), they make it seem like you might settle for 50%, but you're really paying about 80% of the original balance...and 9 times out of 10, as long as you're not a dick, ill settle for a lot less than that. the problem though is most wont give you more than a few months to do a settlement. we got to a max of 3 months, and then, you're not going to get as good a deal as ill give you for a one time payment (ie, today, i offered a guy 55% to settle in december, 65% over dec/jan, and 75% over dec/jan/feb).

 

a settlement will also not look good on your credit report. yes, it looks better than an outstanding bad debt, but a paid in full account will raise your score more than a settled account. this is hit #3

 

it sounds like you need to find a decent credit counseling/consolidation company to get everything down to a low rate. most banks have departments to deal strictly with CCCS accounts. i know i cant even take a payment on one unless they tell us they've dropped out of the program

Edited December 31, 2009 by evan9381

[evan9381]

Shawn, you need to talk to Mark(orange TTZo6) or Linn or Jason(yellow TTzo6) They both will tell you any info you wanna know.

 

lol. nothing against them, but they run a debt settlement company, which will do exactly what i just posted...the companies always try to spin it like its all good, but heres 2 recent things ive seen...

 

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/make-your-debt-vanish-dont-bet-on-it.aspx

 

Make your debt vanish? Don't bet on it

As more consumers struggle to pay off loans, debt-settlement companies promise quick fixes -- and some are scams. There are better ways you can help yourself.

 

The siren song of debt-settlement services is getting harder to ignore these days, especially if your finances are out of control or creditors are knocking at the door

 

Tempting as the ads may be, however, debt-settlement companies can leave you in an even worse mess. Many are outright scams.

 

"If a company's making big promises, it should raise red flags," said Alison Southwick of the Better Business Bureau. "Getting out of debt is not easy. It takes time."

 

Still, it's no surprise that people are vulnerable to promises of relief. It's probably why complaints against debt-settlement services rose by almost 19% in 2008 over the previous year, according to the BBB.

 

Before you pick up the phone, here's what you need to know.

 

How it works

The premise is that debt settlers will negotiate with lenders, usually credit card companies, to whittle down your balance. You pay the negotiated amount in a lump sum. Some companies promise to lower your debt by as much as 70%.

 

The incentive for lenders is that they salvage at least part of what they're owed.

 

Prices vary, but a company might charge you up to 20% of however much you owe. So the fee for settling a $10,000 loan might be $2,000. Fees are usually demanded upfront before a settlement is delivered.

 

Apart from the fact that a settlement might never be secured, the offer is riddled with traps (more on that later).

 

You should know that the BBB automatically lists all debt-settlement companies under its new "inherent problem" category, meaning the bureau has concerns about the entire industry

 

Companies can apply to be removed from the category by demonstrating they deliver on their advertising claims. None has been removed yet, though some are in the application process..

 

 

Some better alternatives

The bottom line is that there's no need to hire anyone. You can negotiate a settlement directly with your lender.

 

"They have a complete picture of your finances. They will know if you're a candidate," said Gail Cunningham of the National Foundation for Credit Counseling, or NFCC, a nonprofit group based in Silver Spring, Md.

 

Before you even reach that point, however, be sure to exhaust all other options. A negotiated settlement comes with serious consequences and should be a last resort.

 

If you feel overwhelmed, ask for a free consultation at a nonprofit credit-counseling agency. You might be able to develop a budget that lets you meet your debt payments if you work with a counselor.

 

You can search for a local agency through the NFCC or the Association of Independent Consumer Credit Counseling Agencies.

 

If a tightened budget doesn't do the job, a debt-management plan might be in order. This is when you and your lender agree to more-manageable repayment terms, usually over a longer period.

The credit-counseling agency will likely charge a monthly fee of about $20 to work out a management plan, but the fee can be waived if it's unaffordable. The plan will be noted on your credit report, but it won't hurt your credit scores.

 

You could also try negotiating a loan modification directly with your lender. Banks have gotten more flexible about adjusting terms in the past year or so. A modification can include a lower interest rate, the elimination of fees or a reduction of the monthly payment.

 

If you decide that a debt settlement is your only option, call your creditor directly. Some credit card companies refuse to work with settlement firms, Cunningham said. So if you hire one, you might be throwing your money away.

 

 

The terms of the settlement will vary depending on the size of your debt, your financial circumstances and your credit card company. Your lender might ask about your income, assets and other debts to determine the size of your settlement.

 

A lump-sum payment is usually required, but you might be able to pay the amount over a couple of months.

 

The repercussions

Hiring a debt-settlement company won't stop the collection calls. Even as a company tries to negotiate, collection notices can still arrive, interest and financing charges can rack up, and your lender might even sue you.

 

Aside from the fees you pay, the total amount of your debt is likely to grow, too, if a settlement isn't reached.

 

And it usually takes about three years to complete a settlement, said David Leuthold, the executive director of The Association of Settlement Companies, an industry group of about 200 debt-settlement companies. That's because clients typically don't have enough money to pay the settlement amount demanded by the creditor right away. So the settlement company will run interference while the client saves up that money.

 

The strategy might not make sense to a lot of people. But Leuthold said people nevertheless use settlement services because they're daunted by the prospect of dealing with creditors on their own.

 

It's not all roses even if you do get a settlement. It will be marked on your credit report for seven years and can hammer your credit scores.

 

Coming regulations

The Federal Trade Commission is reviewing regulations for the debt-settlement industry. One proposed rule, for instance, would ban companies from taking fees before services are rendered -- a common practice now.

 

"That's before you know whether anything is going to be successful," said Susan Grant, a spokeswoman for the Consumer Federation of America, an advocacy group based in Washington, D.C. "In some cases, it's quite possible that no results are achieved."

 

 

New York Attorney General Andrew Cuomo last spring launched a nationwide probe into the industry. As part of the investigation, an Arizona debt-settlement company was ordered last month to pay nearly $200,000 in penalties for defrauding customers in New York state.

 

Cuomo said Nationwide Asset Services had failed to deliver on promises to reduce debts by 25% to 40%. The attorney general said fewer than 1% of its 2,000 New York customers saved that much.

 

At the very least, the case should be a warning to anyone considering debt-settlement services.

 

Published Nov. 12, 2009

 

 

 

 

http://ezinearticles.com/?Shocking-Facts---What-Debt-Settlement-Companies-Dont-Tell-You&id=14774

 

If you're thinking about using a debt consolidation or debt settlement service to help you get out of debt faster and save money on your monthly payments, make sure you do your homework before choosing a company. There are definitely shams and scams out there.

 

First let me say that debt consolidation is *not* the same as debt settlement/negotiation, which most people don't realize.

 

Debt settlement companies charge hundreds of dollars as an initial "admin fee" to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.

 

Such companies take your money every month, but don't make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there's enough in your account to pay a creditor in full.

 

That can take *years* depending on the amount of debt you have with each creditor. Meanwhile, you can be sued by your creditors and your wages can be garnished! (Or just don't make payments to your creditors. You'll end up in the same spot without paying someone to help you get there!)

 

Settlement companies don't ask your creditors to stop all interest, late fees and overlimit fees from accruing. That means while the negotiations are ongoing, your bills will continue to grow! So if you're sued and a judgement is brought against you, you'll owe more money than before!

 

And shoddy companies, which there are alot of, don't tell you *any* of this up front. I call it "getting permission by ommission" because they simply don't tell you how their program works *before* you sign an agreement with them. Or after, for that matter. But if you ask the right questions, eventually you'll figure it out. (Or when the crap hits the fan. Whichever comes first.)

 

Let me give you an example of how debt settlement works.

 

Let's say you have $20,000 in unsecured credit card debt. You owe $10,000 to one credit card company, $6,000 to another and $4,000 to a third. You agree to a 5 year plan where you pay $250 a month to the settlement company. (After all, $250 a month for 60 months is only $15,000, so you're saving $5,000 and you'll be debt-free in 5 years, right?)

 

The admin fee will cost you $750. Your first 3 monthly payments go towards that and nothing gets put into your trust account until your 4th month.

 

The settlement company keeps $50 of your $250 payment each month for the service fee. That means $200 a month is being added to your trust account.

 

Most debt settlement companies claim to be able to negotiate your debt for about 50% of what you owe. So let's use the lowest credit card debt as an example.

 

If you owe $4,000 and your creditor agrees to accept $2,000 as payment in full, it will take 10 months at $200 per month to have enough in your trust account to pay off just that one credit card.

 

But remember, your first 3 payments to the settlement company only paid the admin fee. That means your first credit card settlement is 14 months *after* you started sending them money.

 

So what's the problem? It's simple. Your creditor won't agree to accept half of your actual debt unless, or until, it can be paid in full. Otherwise, you're expected to make your normal monthly payments.

 

Since you don't have $2,000 in your trust account, and you won't have it until more than a year after you stopped paying your creditor directly, they'll probably take you to court and request that your wages be garnished long before you have that $2,000 built up.

 

And what about your other creditors? Well, they'll be waiting even longer to get their money from the settlement company. The $6,000 debt will take 15 *more* months to pay off, assuming your creditor waits that long and agrees to 50%. And that $10,000 bill? You do the math.

 

On the other hand, if you signed up for a 3 year plan with the settlement company, your debts would be paid off sooner. But, the question is, will your creditors wait that long? Probably not.

 

The facts are, you can negotiate with your creditors yourself. Most will agree to take a smaller monthly payment from you and stop all interest and fees from accruing. And, of course, you'll save thousands of dollars in fees to a settlement company.

 

Before signing up for any service, please be sure you check out the company thoroughly. And don't let the words "non-profit" fool you either. Alot of debt settlement companies claim to be non-profit.

 

Going back to the example above, if you pay them $15,000 over a 5 year time frame and they settle your debts at half of what you owed, they'll make $5,000 from you. I'd call that a profit, especially since they might not have actually helped you in any way.

 

Most companies will allow you to cancel your account and get a refund of what you've paid, less the non-refundable admin fee and the monthly service fees. If you feel you've been mislead about their program, don't hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you're getting nowhere.

[evan9381]

and here shawn...BBB accredited since 1981, and 1 single complaint in the last 36 months, which shows it was addressed.

 

http://www.bbb.org/centralohio/business-reviews/credit-and-debt-consultants/consumer-credit-counseling-service-of-the-midwest-in-columbus-oh-972

 

Name: Consumer Credit Counseling Service of the Midwest Inc.

Phone: (614) 552-2222

Fax: (614) 552-4800

Address: 4500 E Broad St

 

Columbus, OH 43213-1360

Website: http://www.cccservices.com

 

 

if im not mistaken, i think this is the little office infront of alliance data systems on broad street, just to the left of applebees (looking at it from the street)

[Danielle]

and here shawn...BBB accredited since 1981, and 1 single complaint in the last 36 months, which shows it was addressed.

 

http://www.bbb.org/centralohio/business-reviews/credit-and-debt-consultants/consumer-credit-counseling-service-of-the-midwest-in-columbus-oh-972

 

Name: Consumer Credit Counseling Service of the Midwest Inc.

Phone: (614) 552-2222

Fax: (614) 552-4800

Address: 4500 E Broad St

 

Columbus, OH 43213-1360

Website: http://www.cccservices.com

 

 

if im not mistaken, i think this is the little office infront of alliance data systems on broad street, just to the left of applebees (looking at it from the street)

 

It is that office.. I posted the wrong website earlier.. oops. Thats who I deal with though, and they're pretty awesome.

[evan9381]

It is that office.. I posted the wrong website earlier.. oops. Thats who I deal with though, and they're pretty awesome.

 

sounds good.

 

you wanna come out for the games friday at my place? i invited shaun and a bunch of others, but i haven't heard from him yet.

[Guest Hal]

Shawn, you need to talk to Mark(orange TTZo6) or Linn or Jason(yellow TTzo6) They both will tell you any info you wanna know.

 

That's what I came in here to say.

 

Personally, I'm catching myself early. I'm paying the minimum on all but one card. Once that card is paid off, I move that payment to the next card and so on. I should be completely debt free, including my 3 cars, in 26 months with a fairly low amount going out each month.

[Danielle]

sounds good.

 

you wanna come out for the games friday at my place? i invited shaun and a bunch of others, but i haven't heard from him yet.

 

Uhh, maybe. Lol. I have to work until 6, so that kinda ruins doin much for me unfortunately.

[evan9381]

well if so, we'll be here til probably late night. we're going to keep it going for the cincy/FL game which starts at 8. call shaun or me 374-7741

[OSUGT]

no magic pills to getting out of debt...I admire the fact that you want to and you want to do it the right way. When ever someone defaults, that is just more slack the rest of us have to pick up.

 

Pay off the lowest balance cards first. When one is paid, throw that payment at the next lowest. This is called a debt payoff snowball. It doesnt happen over night, but it does happen. Can you destroy your CCs and not add any more to the current balances?

 

http://www.daveramsey.com

 

Dave doesnt preach rocket science, but his techniques work if you apply them.

[HotCarl]

no magic pills to getting out of debt...I admire the fact that you want to and you want to do it the right way. When ever someone defaults, that is just more slack the rest of us have to pick up.

 

Pay off the lowest balance cards first. When one is paid, throw that payment at the next lowest. This is called a debt payoff snowball. It doesnt happen over night, but it does happen. Can you destroy your CCs and not add any more to the current balances?

 

http://www.daveramsey.com

 

Dave doesnt preach rocket science, but his techniques work if you apply them.

 

I was waiting until someone posted about Dave Ramsey. Thankfully Im not in debt (save for my car of course) so I dont neccessarily use his advice but from listening to his talk show, and hearing the stories of people going from 80k in unsecured debt to paid off in a rather short amount of time his advice and 'gameplan' does work and there's really nothing fancy about it. He's not a debt consolidation agency and in fact he passionatly disagree's with most of their practice's and has a good argument for it. I would HIGHLY recommend at least reading his book before you sign up for any debt consolidation company or plan. What do you have to lose? spend 15$ on the book and if it works you saved yourself a ton of money, if it doesnt go ahead with a debt consolidation plan.

 

http://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/0785289089/ref=sr_1_1?ie=UTF8&s=books&qid=1262451294&sr=8-1

[Bam]

no magic pills to getting out of debt...I admire the fact that you want to and you want to do it the right way. When ever someone defaults, that is just more slack the rest of us have to pick up.

 

Pay off the lowest balance cards first. When one is paid, throw that payment at the next lowest. This is called a debt payoff snowball. It doesnt happen over night, but it does happen. Can you destroy your CCs and not add any more to the current balances?

 

http://www.daveramsey.com

 

Dave doesnt preach rocket science, but his techniques work if you apply them.

 

While this approach works, it definitely isn't the most cost effective, but its mainly geared towards people that need that quicker "satisfaction" They "feel" themselves getting somewhere because they have paid off a card, and while this is good, realistically it's probably costing them MORE in interest charges and taking them LONGER to be debt free. The reason this is is because your balances do not always correlate to your interest rate. You may owe $1000 on a card at 5% and $5000 on a card at 29%. Yes you can pay the $1000 balance off quicker, but you would be better served at paying the minimum on that card and applying the most you can to the $5000 balance that has a higher interest rate.

 

Just my .02