Has Anyone Had Experience With Signing Up With A Debt Relief Program?

I am a certified money management volunteer with Consumer Credit Counseling, a non-profit, community-based and accredited credit counseling agency. I have heard from many individuals who tried the debt relief programs advertised on the radio, television and online, and they were not helped. In fact, many were irreparably harmed.

The for-profit firms typically require you to pay substantial up-front fees and then counsel you not to pay any of your creditors. Supposedly, this gives them leverage against your creditors because by the time you are seriously delinquent, the firm figures they'll be more likely to settle. But often this is not the case, and your credit history and score get hammered. You can also be sued and have your wages garnished.

I think it is a far better option to work with a credit counseling firm, such as Consumer Credit Counseling or Money Management International, that is non-profit and accredited by the National Foundation for Credit Counseling. These firms will charge you nominal fees and will let you know if your creditors have accepted you into a debt management program, which is essential before you agree to make any payments to the consumer credit counseling firm. Often, they can negotiate lower payments, eliminate fees, and lower interest rates. Sometimes, they can get part of your debt forgiven.

While you are in a debt management plan, you likely will not qualify for any new credit. But, your credit history and score will not suffer because you signed up for the debt management plan. In my opinion, this is the best option if you find you cannot manage your debt on your own.

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RE Has Anyone Had Experience With Signing Up With A Debt Relief Program?

What was the outcome? Did this program help you to eliminate debt? Explain negative and positive experiences to expect. I need financial help in making the right decision on ...show more

Whether or not you should use a program will depend on your own circumstances. Some of them are not so good, make sure to check them out first and see how their "way" might affect your credit score. Usually they make you give up all of your charge accounts and have them negotiate on your behalf with your creditors to reduce your amount (which will negatively affect your score by the way) and put you on a payment plan where you give them one lump sum (sometimes they will get it directly from your paycheck) and they will distribute the money for you (for a small "service charge").

If you think you might qualify for a consolidation loan I might go that route first, the bank will force you to close all your accounts and send the check out for you - but there is no charge and you can pay the loan back automatically with payroll deductions sometimes. It can be a win/win since your debt is decreasing and you are having a positive note from paying the loan on time in your report.

If your situation is not all that bad I would simply follow the advice of people like Susie Orman and Clark Howard. They both have books, shows and websites to help you out. First try to find some more money in your budget and then use it to pay off your bills.

I expect many people that run up big debts don't have any idea what proper debt relief programs should be or do for them and so they end up scammed or with a very bad credit score.

That's the main bad point.

The Idea is to find a loan at less interests than they pay and with fixed interests.

Credit cards can have high interests so it shouldn't be difficult to beat them.

Then the debt is transferred to the new loan place, and so long as the payments are kept up with, the score will not be affected.

So with lower interest rates the debt can be paid up quicker.

It relies upon on the business enterprise. some lenders won't settle for grants from debt colsolidation companies. inspite of the incontrovertible fact that, if this become the case the DCC would desire to have spoke back back to you pointing out this and not proceed to take money for that creditor. the different subject that would have exceeded off is that in case you basically started this technique, submitting a suit would have already been too a ways in to stop it so which you purchased served anyhow. What ever you do, you may desire to circulate to courtroom, in case you do no longer you have a judgement ruled in default against you. i might shop all your place of work work and once you circulate to courtroom coach the decide which you're making money to the Debt consolidation business enterprise. If the creditor is accepting the money the decide will probable(yet no longer assured) rule on your choose.

I have known many people who have tried these various services but no one was truly helped. They invariably cost you more overall with all their hidden fees and credit rating impacts.