Posted by Lucy/IL on 8/7/09 11:48pm
Msg #299237

debt consolidations

There is alot of talk these days with the poor economy about the debt consolidations vs. bankruptcy. Does anyone have experience with the Debt Counseling companys?

Reply by 101livescan on 8/8/09 8:43am
Msg #299252

They will take a lot of money up front, pay themselves first, call the banks and do a work out where they pay less than the consumer would and stretch it out over years to repay.

Meanwhile the consumer's credit rating continues to deteriorate. Just getting a debt consolidation plan in place doesn't take the consumer off the accountability for these debts. In short the consumer is throwing money at these companies to keep the phone from ringing off the hook, but the amount owed increases for the borrower to repay and only digs a bigger hole.

I have a friend who was contacted by a debt consolidation company, and she wanted $5K up front to get it started, had this great script. I looked the gal up on face page, and she lived in Las Vegas, had purple hair, piercings and tatoos. I sent her picture to my friend and asked if this is really the type of professional she wanted to have all her personal and private information and to pay her $5K for "thin air". My friend ended up filing BK.

Does any one else have a different experience with debt consolidation companies. Another ripoff I think.

Reply by MW/VA on 8/8/09 9:20am
Msg #299258

Many of the companies in that business are a sham. If you check your local phone book there is usually a Consumer Credit Counseling service. Also, if people take the time to call their creditors themselves they are often able to work out a repayment plan. I know some people who worked with one of these company's that gets the cc companies to settle to less money. They found out that they needed to claim that "debt forgiveness" on their taxes as income.

Reply by Amanda/Ks on 8/8/09 9:34am
Msg #299262

I have been with a debt consolidation company for almost 3 years, when I was dealing with a worker comp situation, I enlisted the services of one, they arranged payment that I make once a month. I have seen the debt go down by over 2/3 now. Never have a phone call or any other communication from credit card companies, except for monthly bill, with very minium fees if any attached. As long as I make that monthly payment, no problem, if you mess up once they can go back and address starting again. They only asked for 1 month in advance. In my case they were a great option, when one balance is paid off, they apply that money to the other accounts and you see them dropping off one by one. I recommend the one company I'm with.

Reply by CH2inCA on 8/8/09 10:06am
Msg #299266

Are you asking from a professional point of view or personal?
As a signing agent I've gone out to get forms signed to enroll in this type program and my fee has been worth the small amount of work. Usually about 10 pages, and copies.

The customers have been well informed of what they are getting into. I've never been asked to secure any money up front. I don't know how happy they might be with the service.

Reply by Cari on 8/8/09 11:20am
Msg #299280

Amanda, that's great...but how's you're credit rating been

effective with the consolidation, I hope positive...please let us know.

Reply by Lucy/IL on 8/8/09 11:31am
Msg #299283

Can you tell me what co you used? Did it hurt your credit?

Reply by Cari on 8/8/09 1:06pm
Msg #299307

I haven't filed. I'm a bankruptcy petition preparer as well

as a notary signing agent. But seek one that is in your area. Check your PM...

Reply by Cari on 8/8/09 11:26am
Msg #299281

I think that SOME of these companies are in fact rip-off's..

but if you go to the US Bankruptcy Website....

http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm

These are "legitimate" agencies/orgs, where one can go to seek credit counseling assistance. Some are free, some require a low fee, but they will give you legit advice on how you should proceed with your debts.

Some may or may not be debt consolidation agencies, but you can check with your local state to see if they are registered as one.

Hope this helps for some....

Reply by Sonja Valdivieso on 8/8/09 11:30am
Msg #299282

Re: I think that SOME of these companies are in fact rip-off's..

Thank you for your input. It is actually for myself. We are drowning in credit card debt but do not want to file bankruptcy, although that is what our friend that is a bank manager says is best to do. We have had alot of medical bills this past year and it's killing our finances.
I will look at the gov. website.

Reply by CopperheadVA on 8/8/09 12:13pm
Msg #299299

Re: I think that SOME of these companies are in fact rip-off's..

This post is not directed at Sonja, but is meant to be of help to anyone with debt that they desperately want to get a handle on.

The Dave Ramsey program has been very effective for me. My spouse and I have paid off $30K in debt since April 2008, which includes paying off and closing 9 credit card accounts (that includes department store credit cards as well as Visa/Mastercard). We are closing in on paying off our last credit card, and will work on our one car loan next. After that, the only debt we will have is our home loan and that will be paid off in an accellerated manner if we keep working the program.

Of important note: The Dave Ramsey program will only work if you follow the steps and remain disciplined. Try to deviate or do it "your own way" and you will fail (have seen this with friends who took the same class I did). Cost of the Dave Ramsey class was less than $100 through our church - an investment that has paid for itself 300X over (and counting).

If you are interested in checking him out, you can read Dave Ramsey books for free through your local library. His class consists of watching a series of DVD's and applying the principals he advocates. The class is available in many communities (through churches and community centers) and also on-line through his website.

Reply by CopperheadVA on 8/8/09 12:58pm
Msg #299305

Re: I think that SOME of these companies are in fact rip-off's..

Here are the Dave Ramsey book titles:

Financial Peace Revisited
The Total Money Makeover
More than Enough: The Ten Keys to Changing Your Financial Destiny

The Dave Ramsey class is called:
Financial Peace University

Reply by Lucy/IL on 8/8/09 1:15pm
Msg #299309

Re: Dave Ramseys class

I have recently heard about this class but do not know much about it. Will look him up.
Thanks.

Reply by BrendaTx on 8/8/09 6:54pm
Msg #299341

There's a woman in my SS class who mentioned this

program for our church. I'm going to tell her to go for it. I think anyone who attends could really benefit from what you say.

Good job, Copper!

Reply by CopperheadVA on 8/8/09 7:22pm
Msg #299346

Re: There's a woman in my SS class who mentioned this

Brenda, it can change someone's life IF they let it. They have to embrace the program. The spouse must embrace it too, or it will not work. Dave's program has completely changed my life - I never thought it possible when we first started that we could pay off so much debt within 15 months. And the peace of mind it gives is just fabulous.

However, some people take the class and just don't implement the actions within their lives - and they remain in debt.

Reply by MW/VA on 8/8/09 3:41pm
Msg #299329

Re: I think that SOME of these companies are in fact rip-off's..

It is amazing how many people will recommend the bankruptcy route. Granted, it will get all that debt off your back. It will also remain on your credit report for 10 years and you will have to start from scratch to try to rebuild. I agree that bankruptcy doesn't have the shameful stigma attached to it that it once did. Been there/done that. IMO it is better the seek the services of a legit credit counseling service to help work out a plan. Dave Ramsey has some good books & programs, but I don't think they offer the immediate help someone who is facing bankruptcy might need. My .02

Reply by CopperheadVA on 8/8/09 7:17pm
Msg #299345

Re: I think that SOME of these companies are in fact rip-off's..

True, Dave Ramsey's program takes approx two years to pull yourself out of debt - of course it depends on how much income and debt you have as to exactly how long it takes.

Reply by Lucy/IL on 8/8/09 9:32pm
Msg #299354

Re: Debt

Well if you think about we didn't get into debt overnight so why should we get out of it overnight....
Kind of like dieting...better to loose gradually or it just comes back...

Reply by jba/fl on 8/8/09 10:09pm
Msg #299355

Re: Debt

It is all mind over matter....most of what one thinks matters really doesn't in the long run.

Thinking this thought makes it easier to not buy something when you think you need it. If I really need it, it is on a list. If I think I need it, I shop, look and go home. If I still think I need it tomorrow (my, how many times I've just forgotten the item I can't begin to tell you) then I will search on the web, craigslist or www.freecycle.org . Many times I've asked for something on freecycle and others have offered so I save all around. I love it - and the more I give, the more I receive.

I have been on a cash only basis since 1999, when I filed bankruptcy. I have one CC for emergency that I do use on occassion but pay off in full every month. I have rebuilt my credit to mid 700's and am happy to turn down any special that I do not really need. Funny, but when one begins to declutter ones life of all the junk and excess, one finds a freedom heretofore unknown. The breathing room is tremendous.

I always hear in the back of my mind: If it is worth having, it is worth waiting for. One example: It took me 3-4 months of comparison shopping to buy a new set of silverware, 6 or 7 stores, web, and finally a sale of the pattern I wanted that I could live with the rest of my life. Not real silver, stainless, but I treasure and value this purchase more than I ever would have in the past.

Clark Howard, Everyday Cheapskate, freecycle, craig's list, flea markets, garage sales: never pay retail except on sale. Don't carry cash, credit cards at home, no checkbooks either. Budget, envelopes w/food money, gas money, etc. Get a system, tweak it till it fits like a glove for your life.

Simplicity....Goals....Commitment. All attainable, but not easy at first. Mindset.

Reply by jba/fl on 8/8/09 10:32pm
Msg #299357

PS

I have an allowance - the money I carry can be used for giving away, spending, losing, burning or doing something I love to do. I am accountable to no one for this money, but I cannot borrow from next week's allowance to get something I want today. Today I have to save to spend next week if I want something I can't afford until then.

The 6 P's: Prior Planning Prevents Pi$$ Poor Performance.

Reply by Lucy/IL on 8/9/09 10:10pm
Msg #299387

Re: Good advise!

Great advise! Wish I had done that years ago. Better late than never though.