In Debt up to My Ears

Before you make any decisions about debt, read "A Total Money Makeover" by Dave Ramsey. It's the best finance book I've ever read.

Hi C.,
This company has a really good reputation in Colorado. They are non-profit and I have had friends use them.
Consumer Credit Counseling Serv
1247 Riverside Ave
Fort Collins, CO 80524
###-###-####
Peace, T.

Hi C. -- don't do the loan consolidation thing. I recommend you get books by Dave Ramsey and/or Mary Hunt. Your local library should have them. Read those first -- you can do this!

L.

The reason credit reduction companies ruin your credit is because they deliberately make your payments late so that the credit companies will be willing to settle. If your payments are all made on time and in full then the credit companies have no reason lower your debt or interest. So the reduction company works out a payment plan with you and then accepts the payments as their fee for (usually) 3 months, once you are sufficiently deliquent, they approach the credit companies about reducing your debt. If you are already late and your credit is already suffering than this might be the best solution. If you are like me and your credit is good, but it is your debt that is overwhelming than you might look into a debt consulidation loan to reduce your monthly outgoing expenses. Make your payment as small as you can, but overpay it every month with the "Excess to principle" and you will be surprised at how fast you can get that debt reduced without the credit damage that reduction companies cause.

Good Luck

I would not recommend a debt consolidation place. They can be incredibly predatory. I would recommend Dave Ramsey's plan. Check out his website... he's all about eliminating debt and creating wealth the right way. Good luck!

Check out Dave Ramsey before you try one of those places. We went to Consumer Credit Counseling at one time, but their fees are high for what they do. Dave Ramsey has some good ideas in the area. I can't remember his website but if you google him you're sure to find him. If you're in Utah, he's on 5.70 KNRS radio in the evenings at about 7.

I can't advise against these debt settlement programs enough!! I work in the financial industry and in particular with these sort of accounts on a daily basis. What most consumers do not realize is that 1- you can negotiate with your creditors on your own without paying a third party to do so; 2- using a third party makes it very difficult for your creditors to communicate with you. which is great if you dont want collection calls, but leaves you out of the loop if something big is going to happen on your account (ie, it is about to be reported to a credit bureau, there is a discount promotion going on, etc). Dont expect that your settlement company will relay any of this info to you! Most of the companies I speak with (if i am advising an account is about to be reported) just tell the creditor, "yeah, most of our clients expect that". 3- This can harm your credit rather than help it. Most settlement companies will have you start putting away money in savings and once you have enough for them to make an offer of what they think is a reasonable amount to your creditors, they will contact the creditor to see if , for example, 50% of the balance is enough to consider the account paid in full. **The creditor is not obligated to accept the offer, many credits in fact will not reduce the balance at all. also they may list the account as "settled" on your credit report, which is better than unpaid, but still not great.

Here is what I would do:
-Make a list of all your debts including the amount, how far past due, creditor contact.
- contact each creditor and ask for a supervisor. find out specifically what your options are. be sure to ask if the account has been sold to a collection agency, and if not, when it will be; same thing with credit reporting. Find out if they will accept a settlement and what the terms would be.
-after you have sone this with each creditr, you can decide which accounts need to be paid first (based on who can give you the best discount as well as based on negative ramifications like legal action, credit damage, repo, etc.
-go back and contact the creditors again to accept settlement offers and set up a payment plan on the rest of the accounts.

If the collection calls are getting out of hand, send a written request that they contact you only in writing. But please please make sure if you do so that you keep on contact with the creditor so you know where you are at with your account.

Please read Dave Ramsey's book , Financial Peace, and listen to his show. Those company's are sharks, they will take your money, keep some for themselves and make a settlement with your debtors( which you can do yourself, and keep your money to pay the debt)Your credit will be damaged either way. It sounds like you have an income crisis if you are in graduate school and barely employed, I can see why thing's are tough. You can also take a Financial Peace class at local churches, go on Dave Ramsey's web sight and you can find a church to do the program, I really reccomend this, we did it and it has really changed our lives. Remember, food, lights, shelter, transportation and clothing in that order, creditors can wait, don't let them intimidate you! Hang in there!

C., God bless you, don't feel alone. We are in the same boat. We used moneymanagement.org. They are reputable, they did negotiate our debt down and are paying the bills. . . they also have an office in Highlands Ranch so you can meet with them in person if you need to. Also, please please please find Dave Ramsey's Financial Peace University. You will take a 13 week class (2 hours a week) and learn how to manage your money so this doesn't happen again. Best of luck!

Several people have already mentioned Dave Ramsey and I too have gone through where you are at and we took the class and loved what he taught. There is a Town Hall meeting occuring Thursday night with Dave Ramsey. Check out his website and find a location near you. Are church is hosting one site but we are in Fort Collins, CO. He is broadcasting through the internet and giving us all a insight on the economy and how to work through it. You may find this a way to see if you like this. It will take hard work, but do not give up. You can get out of Debt, just remember you are not alone.
M.
Please feel free to contact me for more info on the town hall meeting if you want, go through my name.

Hi C.. I actually worked at a Consumer Credit Counseling Agency called Family Financial Education Foundation and the office is in Evanston Wyoming. It is a small office (about 60-70 employees) and they do the same thing as the big ones. It is the same program as what you see on tv like CareOne. I worked there for 7 years and this is what I can tell you about that type of program. It does work to help get you out of debt if you are committed to making the payments and not aquiring additional debt. Most creditors as far as credit cards have minimum requirements and if you meet that payment you can get lower interest. Other creditors they negotiate a payment that hopefully can keep them happy and you can afford. Being on the program does show on your credit report but making those agreed payments on time every month still reports as consistant payments, the more your balances come down the larger your available becomes and your credit score can improve over time. It does not show like a bankruptcy which will show on your report for the required time. I was also on this program 12 years ago and used it to pay off credit cards and after my accounts were paid in full, they didn't show consumer credit on them and my scores are now over 800. Over the 7 years I worked there, I did see people get out of HUGE debts and receive education to help them stay that way. If you have anymore questions please let me know. I am more than happy to help.
Good luck!

You don't say where you live, but sometimes there are non-profit organizations that will help you work things out. If you have a church, start there - they may know.

You may want to call your creditors. Most places will work out a payment plan with reduced interest if you are behind (it includes closing the account to future use, too), at least for unsecured debt like credit cards. If you can work directly with your creditors to get help, why pay someone else to do it? Car loans or other things that have collateral are less likely to make arrangements but they also won't work with these other companies to make arrangements - they'd rather repo the vehicle more often. But still call and see what they can do.

Be very wary of places that call you (we've been getting tons of calls lately). Also be cautious of places advertised on the radio/t.v. for "eliminating" your debt or even "settling" your debt (even if they are legit, settling can have negative repurcutions on your credit). The best bet is to go with a Consumer Credit Counseling agency. They will help you go over your income and expense to properly manage your debt, and then can help you set something up to lump everything together and make one payment a month. Make sure that they are non-profit and have a good record with the Better Business Beurau.
You want to be very cautious because you make one payment to the company which they then pay to your creditors. Unscrupulous companies could charge you high fees (although all companies will have a fee, you don't want to pay more to them than you would in interest the other way) and some take your money and split, leaving you worse off than before.

Just for clarification, I want to make sure that you know that if you use those services you will ruin your credit rating. I'm sorry.

C.,
Call American Credit Foundation, Inc. A local source that you can visit in person.
7720 South 700 East
Midvale, Utah 84047
Phone ###-###-#### or 800-259-0601
They are Great to work with and Honest Let us know how you make out. They have helped us Greatly. Dave Ramsey is also a great source for controling Debt.
Live Well, M. H

Be aware that they totally ruin your credit, and as a part of the program a friend did, they weren't able to even apply for a credit card for a certain number of years. That said, if you're just needing to pay off debt & screw the credit for the next 7 years or so, try Consumer Credit Counseling. They don't heavily advertise that I've noticed (a big plus in my book-the more they have to advertise to bring in clients, the more I wonder why they don't have enough clients). You can also try contacting credit card companies yourself-if you're able to agree to a certain payment & stick to it (that's the important part), they sometimes agree to close your account once it's paid but don't charge interest from when you set up arrangements. The problem w/that is that once you skip a payment, the interest you would have been paying is added to your balance & interest starts accruing like normal. Been there, squeaked the payments out to avoid the interest, got my credit up to the high 600s from a bankruptcy & no credit 10 years ago.
Good luck! The important part is that you're willing to pay it, no matter how long it takes.

I did the credit counseling thing and my credit did NOT go down like some people have been saying. Only months after I paid down my 25K credit card debt, my FICO score is the best EVER. I used Care One Credit (www.careonecredit.com). They lower your interest and monthly payments ONLY....NOT your total debt owed...so it doesn't negatively affect your FICO score. I also recommend ready Suzy Orman's book "Women and Money"...what she says in there is VERY true for a lot of us women!

Hi,
we went to Debt Reduction Services and they helped us out a lot. In less than a year we will only have our house payment and 1 car payment left and we will be completely debt free. They try to get you out of debt in 3 years. We took 40 months for us to be out of debt. Try them, they may be able to help you out a lot.
Good Luck!

I just saw that someone said your credit rating would be ruined...I will explain what happens, and that your credit rating will not be ruined. While you are in a debt program on your credit report it says that you are in a debt management program. As soon as everything is paid off, all of that comes off of your credit report and it shows like you paid it off without any help. Your credit score raise significantly. So don't be leary about that. Your credit score does not get ruined.

We went through AAA Fair Credit. They are great. We have been on the plan for four years and we will be completly paid off this December. It's a slow process but once they start getting paid off you see them all getting paid off quickly. We had out set amount that they took out each month. Our payments were never late.

I would suggest the consolidation loan not the debt reduction route. What they don't tell you is that this can hurt your credit as much or more than a bankruptcy. Go talk to your bank for suggestions... Please!

We found out I was pregnant during our last year of college, and my husband and I were both full-time students with no insurance. I had something similar to a stroke and was on bed rest. I went into labor the first time at 16 weeks, then my body kept trying to go into labor at least once a week thereafter until our son was finally born. We ran up a $75K tab with the hospital, and because I was on bed rest and everything, we maxed out every credit card we had. It felt awful. We were drowning in debt. I completely understand how you feel.

We ended up being referred to CCCSSF by some friends who also used them (and then found out three other sets of friends were using them). I know it's not ideal to have to use one of these services, but once we were paid off, our credit scores increased tremendously. I would definitely recommend them. I think that stands for Consumer Credit Counseling Services of San Fransisco. Their number is 1-800-777-7526. Their website is just cccssf.org. While the monthly payment was still big, it was much smaller than the bills individually, and our debt amount dropped much more quickly.

Good luck in whatever you decide!

C.

I feel your pain big time! I did In Charge Debt Solutions, reputable company. They contact the companies, work down a payment that is reasonable and have a five year plan. They reduce the interest rates and so on. They send monthly statements so you can see where the distribution is going to so it is legit. If you can make a payment monthly they will do all legwork. They will take into account your monthly bills, income and work with you to figure out a plan.
It affects your credit a bit, not severely.
I am actually having to contemplate bankruptcy as with my divorce and other economic issues I am not even able to make much of a montly payment! It is stressful but when I worked with this company in the past they were good. They charge a montly fee, not much, I think it was $20, but they do all the legwork and distribute the funds for you.
Good luck and God Bless

Dave Ramsey is a great voice to listen to whether it be the radio tv or his books. You can check them out of the library. He is a great motivator and has great finance advice and getting out of debt.

Hello C.,

My name is B. and I live in Colorado.
I also am still paying off some old debt, but I am able to do so with my home business with Arbonne. Are you interested in being your own boss, making great income potential, and being at home with your daughter.
Please let me know if you would like additional information. I would love to help you. B.

It looks like you already have a lot of advice, but I figured I'd give you my info too :)

Several years ago, my husband became addicted to ebay and racked up tons of debt (I can't remember exactly, but it was around $60K-$70K). We were referred to a debt consolidation company called Delray Credit Counseling (www.delraycc.com). They're out of Florida, so our only contact was through emails and phone calls. But, they were very helpful, negotiated lower interest rates and monthly payments with most of our creditors (one company did not want to work with them so we kept paying that card separately), and we got everything paid off in about 5 years. They do have a small monthly fee, but once everything is set up you just make one monthly payment to them and then they pay all your creditors. We would receive our regular statements from our creditors showing our payments each month, as well as a statement from Delray showing how they had split up our payment among our creditors. I found our monthly payment was about 2/3 of what I was paying in total to the individual creditors, but that little bit helped and it resulted in getting all our debt paid off quicker than I could have by myself. They do not allow your accounts to go delinquent (unless you don't pay them on time) and it did not adversly affect our credit. There was a note on our credit report that we were working with a debt consolidation program, but we were still able to buy a house and a car while making our payments to them. Now that we're finished with their program and have paid off all that debt our credit is great.

I completely understand how stressful and scary it looks right now, but just remember that if you're serious about this it is possible to get your financial situation turned around and get yourself out of debt.

Good luck!

Hi C.,

I'm sorry you're having to deal with all of this right now. I'll think good thoughts for you.

I worked with Debt Reduction Services in the past. They were a great organization to work with and my credit was not ruined. Be realistic when you go in - they can help a LOT but cannot work miracles. They use their relationships with the creditors to your advantage - some will forego charging you additional interest and fees - but not everyone is go forgiving (ahem, Discover). They cannot erase already bad credit - once it's gone it takes a long time to clear up.

One nice benefit is that there is no early payoff penalty and their monthly fees are very reasonable. There is no fee to sign up and the staff that I worked with was very nice.

Hang in there and best of luck to you!

I haven't tried it myself, but my husband and I are both about to give 'em a call- Freedom Debt. There's a representative for them on the news program I watch every morning and it sounds very on the level. Go to:

www.freedomdebt.com

The guy says they work with your credit card companies etc. and lower your debt. They have experience lowering people's payments by almost 50%....

Have you checked out your local United Way to see if they have a program that can help you. I know in Utah they have what is called Utah Saves, its free. It's a good place to start. Anyhow, good luck.

Besides using a service you can always call your credit card companies and ask them if there is any way you can reduce your finance charge (usually by simply asking they will do it). Then I don't know about you but I am always getting balance transfer deals in the mail that say transfer money to this card and have 0% for 6 months or 3% till balance is paid off. Then you just keep card hopping till you pay it off.