Our view: In debt? Careful who you call for assistance Duluth News Tribune
Night owls see the commercials more than others. For debt-consolidation companies: the answer to prayers for financial rescue and stability. Many companies are perfectly legitimate and caring, no doubt.
But the reality is, “There are a lot of charlatans out there,” as Mark Peterson, the outgoing president and CEO of Lutheran Social Service of Minnesota, told the News Tribune Opinion page last week. His nonprofit’s well-known financial counseling service is based in Duluth with a call center here and 30 counselors at the ready.
“Imagine the courage it takes to make that call, to say, ‘I need help.’ We are eager for folks to make that call,” Peterson said while in Duluth on a farewell/hello tour of the state with his replacement, Jodi Harpstead. “We want to be that call instead of the charlatans looking to rip people off.”
Credit card debt is an especially relevant issue in the Twin Ports, which tied for third in the nation in terms of the percentage of income its residents owe credit card companies. Equifax, one of three companies that tabulates people’s credit ratings, found residents of Duluth, Superior and the Iron Range owe 16.72 percent of their income to credit card companies. Tied with Toledo, Ohio, the Twin Ports trail only Wilmington, N.C., and
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How much did/do you have to pay for debt consolidation??
I'm seriously considering working w/ a debt consolidation company, and just wanted a rough idea of how much ppl have paid or are paying... and how long it took you to get out of debt?? any answers are helpful!
I dont know your situation but I looked into it last year - from the broker who just wrote my mortgage and he strongly discouraged me from doing it.
He said it's almost like declaring bankruptcy in a sense that these companies negotiate with your credit card companies for lesser payments on whats owed and often the accounts get closed.
If you can consolidate on your own - transfer balances to a card with a lower apr, or if you have a home, take out a home eq loan or line of credit, those are better options.
However, if you do go ahead with the debt consolodation, you could save as much as 50% a month and have an end-date in the payments.
Court action was taken against us. We settled out-of-court with great help from the debt solution company, but a possible judgement was too close for comfort.
I still ended up taking out loans from other sources (that you might not have available) to get the whole thing off my back (including the court action). I'll be paying THOSE off for another 3 years.
Sure, I don't have any 'bankruptcies" on my credit report, but I do have a bunch of "severely delinquent" notes, and, "Settled, but not for the full amount", notations. My credit score is a whole lot higher than I would have expected, but not stellar by any means.
Oh, yeah -- any debt forgiveness counts as income on your tax return (possibly -- I still have to figure that one out for sure). So, if you have a debt forgiveness of $10,000, that's an extra $1500 - $3000 tax liability. I hope I am wrong on this one.
Over all, I would not go through it again. I would get credit "counseling". Those guys can negotiate lower interest rates.
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First off, it shows on your credit as debt consolidation. This is a huge RED flag to Lenders. If this is something that you are really wanting to do contact an Attorney first. If your debt is to high there could be other options. If not there are still other options to help. I have seen so many people hurt instead of being helped in this situation.
For example you pay $200.00 a month to the Company to pay your debt. There is a fee that is included that they take out so that they can divide your payments and send them in for you. In most times the fee that you are paying them adds up to the interest that you are already paying on your debt.
If it is collections that you are working on, there are many different steps to this. They say that you can save money in the long run it hurts you more then helps, it looks as if you can not handle your finances and have to have someone do it for you. Then if you apply for new credit after the fact, some lenders can keep you from getting this until you are 6 months to a year out of counceling. OUCH !!!
Again if you feel this is something that you must do, check fully into the Company. Go to BBB.com in your state and check their rating out, if you do not see them listed, be careful. And if you do, still be careful, there are debt advisers out there that are good from what I have heard.
I work for a Lender and hate the fact that people are told that they have to pay a Company to fix there credit when in truth they can do it themselves for free.
In this business I have seen many people actually pay to get it fixed and the creditors never get paid, then it falls back on the debtor with more money due.
you should pay zero dollars and zero cents.
dont pay someone. you really should consider doing it yourself, and not have a debt consolidation on your record. i hear it makes things worse, like you cant handle your own finaces, and need help.
make a budget and stick with it, and your creditors will let you make payments, they have to, or if you have enough money to pay off one thing entirely, call that one place, and make a deal to have them reduce it by as much as they can for you to pay it off in full, sometimes they can go 30-50% off the total.
but you do not pay for a company to haggle on your behalf.
do not pay. its a rip, you or your bank can do this for free.
I suggest you to join a debt settlement company who will negotiate with your creditors and bring down your principal debt by around 30% to 70% depending on your credit companies. You can make affordable monthly payments and get out of debt within 36 months. Do you know how long it will take to be debt free if you go with a debt consolidation company???
There will be no upfront fees, and hidden costs asociated with the monthly payment options.
Check out this debt settlement company who has helped me with the unsecured debt situation.
http://www.debtfreeafterall.com
Good Luck
Credit card debt consolidation company. Who is legitimate?
I ran out of cash meeting uninsured broken arm surgury, then started using credit cards. Did the low rate transfers and all that stuff. Now back to work, but could not make payments last few months. Hounded by their phone calls all the time. Have not answered their calls. But I am now working again and can start making payments. I am ready to contact the credit card companys. Before I do, I would welcome any advise (or benefactors, Ha,Ha). Totally, by rough calculations I owe about $80,000.
As an after thought, I am aware there were changes in the bankruptcy laws but do not know the specifics. Is bankruptcy a good option. Basically I have zero assets, no real property.
In closing, who is a reputable debt consolidation company, is bankruptcy a viable alternative, or is their an an alternative I do not know of? Thank you for your advise.
P.S.
Spend $10 for a non-slip pad for your bathtub. Money well spent !
http://www.debtadvice.org/ has an online lookup for legitimate credit counselors. Look for an organization that will look at your situation in detail, instead of producing a cookie-cutter plan.
The new bankruptcy laws have made it more difficult to qualify for Chapter 7, or the kind that releases you from all of your debts. Here's an article with more details: http://www.nolo.com/article.cfm/objectId/B0B66870-4C52-4303-919B10B9611D3EF9/213/161/176/ART/ A bankruptcy stays on your credit reports for seven years, so it should be your last resort. See what a credit counselor says first.
Good luck!
A debt consolidation company can't do anything that you cannot do yourself. Once credit card accounts become very late....such as five to six months late....It can be possible to offer a settlement in the 50% range. You don't need to hire a debt settlement firm to arrange such a deal. Many card firms will accept settlements at 50% as opposed to loosing everything if the customer file for bankruptcy.
Most...but not all card companies would be expected to accept such an offer....but not all....so be careful. Some might not respond well to such an offer and they might decide to sue. Note: The IRS considers forgiven debt to be the same as earned income, so whatever debt you manage to get forgiven in any settlement will have to be added to your next year's adjusted gross income....So if you managed to get a 50% settlement ($40K)...you'd have to add $40 to your next year's income and pay whatever additional taxes on that amount.
If you take the settlement route: Get any and all terms IN WRITING FIRST. Never make such offers verbally over the phone without written documentation.
With this level of debt I wouldn't bother with Consumer Credit Counseling Services (CCCS)....the best they can do is lower the interest rate...They do not negotiate debt settlements...Note: They are partially funded by the credit card industry.
Regarding Bankruptcy: This level of debt is high....but I don't know the circumstances regarding your income. If your income is not high, filing for bankruptcy should be on option on your table.
IMPORTANT: DO NOT let anyone on the board (or elsewhere) try to guilt-trip you into not filing for bankruptcy if you need to do this. Corporate America uses bankruptcy all the time without people accusing them of not paying their bills...
Filling for bankruptcy does NOT stay on your credit report forever...it stays for ten years....It will not destroy your credit forever....It's very possible to get back into the mid-600 credit score just two years after filing for BK.
It doesn't cost anything to have a consultation for bankruptcy....You have to pass a means test to qualify for Chapter 7...so the consultation will clarify that issue.
I went through an ID theft and bankruptcy and still got my score up from a 486 to 730 in a little over a year, so this is an area I've had experience with!
I'd direct you to my website at this point. I uncover the most often used scams in debt consolidation as well as ways to improve your credit, bankruptcy options, consolidation loans and how to go about challenging and removing negative items from your credit reports!
Thanks for the advice about the non-skid bathmat! I don't have one now and I almost fell in the tub last night as a matter of fact! Good luck to you and happy holidays!
Duane
Should you declare bankruptcy?
Bankruptcy makes it possible to:
Give you a fresh financial start by erasing certain debts. This means you are not legally required to pay those debts.
Stop most wage attachments from your pay. Creditor can’t discount your wage to repay the loan.
Creditors and debt collectors can’t bother you
Other alternatives than declaring bankruptcy:
Financial Management
Simply exercise tight financial management until your financial health is restored. This is easier said than done especially if you have a large debt and unable to work.
Talk to your creditors
Some creditors will waive certain part of your debt or even waive the interest of your debt, provided that you agree to make payment to them. They will agree to do this because they know that some debts are hard to collect and they are better off negotiating this deal with you rather than taking it to the court.
Refinancing
If you own a home, and have some equity in the home, consider refinancing your home to pay off all of your high interest debt. You may be able to obtain long-term financing at a much lower interest rate, allowing you to consolidate your debts.
Please be careful when dealing with companies which offer to consolidate all of your debts into a single low payment loan. Some of these companies collect large sum of fees while they are offering a consolidation loan package to you. Sometimes the package is lousier than bank or credit union.
Is debt consolidation the best answer for me?
My husband and I were recently told by a lending company that if we put all of our debts on payment plans, and got a credit card to start out our credit, they would give a loan. Would it be easily to consolidate all of our debts, which don't include any credit card bills whatsoever, or simply call each place and put them on separate payment plans?
Normally, all debt except for credit cards, is already on a payment plan. The one exception being a home equity line of credit, where you might just be paying interest for the first 5 years. But, you write that you have no credit card debt.
I would use a different lender. Any lender that advises you open a credit card and consolidate the rest of it doesn't sound like they have your best interests at heart.
The only reason you might consider consolidating the debt is if you can get a lower interest rate doing so. This would impact your ratio's for getting a loan. Otherwise, manage your own debt or see a financial adviser with nothing to gain by the choices you make.
If I were you, I would just call each place and make payment arrangements. Pay more the minimums on them if you can. The quicker you pay them off, better it will look for you.
Good luck
what's the best way to consolidate credit card debt and from ur experience which company do u suggest using?
i would need answers from people that went through credit card debt consolidation themselves to answer, please no advertising or financial company, thanks.
I did go through credit card debt consolidation, I paid $25 to a firm that supplied me with a selection of about 50 banks to choose from.
These are smaller banks which don't spend tons on advertising their products so they can do amazingly low interest rates.
I chose the one closer to me, went to have a talk etc, to cut it short they paid the debt for me and I paid them a monthly instalment, at 6.5% interest.
Since there are $25 to be paid and you ask for no financial company then I won't advertise anyone, just look for something similar, it worked for me and my experian report comes up clean.
Don't use debt consolidation companies. Do it yourself. They aren't necessary. If you consolidate your debt with a company, and you don't address your spending habits, you will just run up more credit card debt.
I will hereby talk from my personal experience.
I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,
a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :
http://umgarticles.atspace.com/debt-consolidation.htm
if it helps kindly remember me in your voting!.. cheers!
Bankruptsy/Debt Consolidation Question. Please Help! Serious answers only please... ?
I'm 25 years old, married with no children. My husband and I are struggling financially, to put it lightly. We owe about $8000 on our car, and have about $10,000 in other credit card debt. And we're total morons and bought a time share when we had extra money last year. Now we just can't keep up and my husband's work has been very slow while I've been trying to go to school full time and work around 55 hours a week. I'm about at my breaking point. Should we file for bankruptsy? The thought of a house seems impossible anytime in the near future anyways. My payments on the credit cards are just covering the interest and the balance isn't going down. Any financial suggestions would be helpful. I've considered debt consolidation but I know that won't help with the car, time share and other stuff. And I want to find a trusted debt consolidation company. We also both have student loans. We're a mess!! Please help.
Bankruptcy will haunt you for a lot of years. Avoid it if at all possible.
See if you can just give the condo back to the seller, or somehow get rid of it.
Then think Debt consoling -- the counselor might suggest consolidation or some other approach.
BE VERY careful to find a credit counseling agency that is not for profit -- preferably free (no need to go further into debt)
meantime lock up your credit cards these are for emergency use only. Start carrying lunches to work, no more nights out until things get settled.
You might have to drop out of school for a semester, or find part time work.
It will be tough for a time, but you will learn a valuable lesson
if i wer u i would file for bankruptsy. best of luck :)
Does hubby have a 2nd job?
Find a CCCS Consumer Credit Counseling Service in your area BEFORE filing BK and see if they can get the interest lowered or eliminated etc. Use only CCCS as other services are just rip offs.
Good luck
I'm thinking about debt consolidation.Can you suggest company that i can trust?
If you did it: who did you call? There is so many of them,and i need to find the best one.
Thanks for your answers!
If you can consolidate your debt through another loan rather than with a consolidation company or organization, that would be preferable. The fees these companies typically charge normally amount to much more than the interest you'd pay on a personal loan, and the consolidation will be a huge black eye on your credit report. The drawback is that since you are looking into such a service, you probably have a credit history that will make it difficult to obtain the loan. In that event, a cosigner or collateral may help.
If you do choose to consolidate with a service, make sure it is a TRULY non-profit one. Most of the organizations call themselves non-profit, but in many cases that just means that all of the profits go directly to salaries and administrative costs. Your best bet would be to use an organization that is directly tied to a Christian ministry. You will find local ones in your yellow pages.
Is debt consolidation really the answer? ?
I currently have a student loan, car loan, four department store credit cards, and three credit cards from various companies (Capital One, MBNA, and Bank of America Visa). I owe about $8,500 collectively on all my debt and my payments are well over $600/mo. I'm starting to think I can't afford it anymore. Do you think I qualify for debt consolidation? I just don't want to get in a position where I can't pay my debt. I need help.
Huge credit card debt...Need advice on consolidation?
My friend and her husband have a huge credit card debt (42,000) and she recently had to stop working due to a difficult pregnancy. They cannot make their payments any longer. The debt is in her name only and they are considering a credit card debt consolidation company but she is wondering would it affect her husbands credit if she filed it in her name only. Anyone been through this or have advice? Serious answers only please...they are having a really rough time right now.
Okay... here's what's up... you are using the term "debt consolidation" but a consolidation is simply taking the debts you owe and combining into one loan. Unless they can drastically reduce the interest rates to a manageable monthly bill that they can pay off on time, it's no different to owe $42K to one creditor or 15 creditors... the reality is they owe $42K. With that said, I believe you are asking about a debt management company like Consumer Credit Counseling. Yes, she can file her own bills with them but she's going to end up not having the income to repay the debts since she has no income. That's not going to work. There's no reason for hubby to go into a CCCS type of plan if he has no debts. You may be thinking of the kind of company that settles debts with creditors for pennies on the dollar. The problem there is that it's one step shy of bankruptcy according to the credit reports and scores so it's really not going to be of much advantage to owe $20K of the $42K that she cannot pay either. That leaves bankruptcy. That's a last resort option but sometimes people have to do what they have to do and at least they can get a fresh start. The problem with bankruptcy is that being married, it doesn't matter whose name is on a debt because in many states, his bills are hers and her bills are his and even if he doesn't want to file bankrutpcy, he may have no choice is he's pulled in. Also bankruptcy puts your finances in the hands of the court. You do not choose who you pay and not pay. Some people are forced to sell homes and cars and other assets while others can keep such possessions depending on what the court deems to be the best route for the consumer. The real answer to the question isn't really the debt. For some people $42K is 50% of their income and to others $42K is only 10% of income. What's alot to you and I might not really be alot depending on equity in the home or a variety of factors. The debt settlement companies turn you into a deadbeat with the creditors and then THEY make the money that you would have paid to the creditors anyway. What's the advantage there??? The first step might be to call the credit card companies directly and ask what kind of hardship programs they may qualify for. Perhaps they can suspend credit priviledges and payments until she returns to work. They may suggest a program like CCCS. The thing is if her income is zero, that's all she can pay. Give your friends the website or phone #s on the "take the first step" link below to the NFCC.ORG consumer credit agency below and ask what options, pros and cons, are available to your friends. It'll be the best phone call they can make.
which is better credit card consolidation or debt settlement? I need an honest answer.?
I also would like to know if anyone has been thru this and what company they used. I do not know which way to go I hear conflicting stories about each.
Think of debt settlement as "bankruptcy on lay-a-way", cause the bank looks at them similarly. Settling the debt for less than the amount thay you rightly owe the your creditors will have show on your credit report.
Assuming you qualify for a consolidation loan, this is only a temporary fix if you don't correct what got you here to begin with.
List your debts from smallest to largest. Pay only the minimum on everything but the smalles, and pay as much as you can on it. Once it's paid off, take what you were paying on and apply it to the next smallest, pay it off and work your way down the list.
Cut up the cards, pay for cash and spend less than you make.
Debt Consolidation?
Ok, I am about 4 thousand dollars in debt. They were originally hospital bills but have been forwarded to the collection agency. They are about a year old now and as much as I don't want to pay them I figure it's better to get it over with now and not let it remain on my credit. I was looking to consolidate my debts. The hospital bills are sent to 3 different agencies so I want to consolidate it and perhaps lower it (I've heard things about that but I don't know how it works.) I was curious about the process, trusted companies. I have a max of 60 dollars available p/ month. Come on people, give me some answers. I wish there was something I could do because I was on medicare until I was 18, now 21 and somehow in debt. If someone knows some alternatives to actually PAYING then feel free but right now I'm looking to reduce and simplify my debts
First of all, a hospital should not have sent your bills to a collection agency unless you haven't attempted to pay any of the bills for a very long time. A year is probably pushing the limit, but it's not 2 or 3 years. Contact the hospital and see if you can work with them on a payment plan. Let them know you can afford to pay $60/mo and see if they will work with you. They should, especially if they know they'll get payment.
If not, contact the collection agencies and see if they will work with you as well. Some, if not most, agencies will not only work with you, but may also cut a deal so you won't have to pay the full amount.
If neither of these options work, look into getting a consolidation loan from your bank. I would NOT suggest using a credit counseling agency - not only do most require a fee (which obviously you can't afford), but from someone with contacts in collections, I've heard many of them do not follow through properly and actually end up hurting your credit worse, and you'll still be getting those harassing letters and calls from the collection agencies.
If none of that works, my last suggestion would be to call back the hospital administrators and give them an ultimatum - either they work with you directly (on your terms - no collection agencies) or they won't get anything at all. If the 1st 3 options aren't available, then they're not going to get their money anyway, right? Your credit has already been damaged.
