Anyone use a debt consolidation company?

[alkemyst]

I am trying to pay down some debt mostly from college my second time.

My school loans are about $30k, but at 3.5% not really a problem.

The main thing that sucks is another $27k in credit at around 8-12% (about 8 accounts).

I spoke with an agency just a moment ago that sent out a postcard. They can turn that debt into at MOST $14500 with a 25 month payoff at $600/month.

I am currently looking at roughly a 40-42 month payoff at about $1000/month. Between school loans, the CC's and the furniture I have 0% on I am paying about $1500/month in debt.

I was trying to get a 0% balance transfer but due to a high balance to limit (~54k in limit) I am getting rejected with a sub 700 credit score. I am current with all my bills and pay a lot more than the minimums. Many of the things I find online are for those that are only paying the minimums and behind 2-3 months or more...

Anyone have any experience with this and the affect on credit score, taxes, etc? I was told my score will drop 'a bit' and quickly recover over the first 6 months to year. I was told usually there is no taxes owned, but I would need a CPA/tax professional to evaluate my situation. I would also be required to close any cards put into the program...I don't know how those creditors will look to me in the future. If I was dealing with crappy card carriers that would be fine, but I am dealing with better card companies given decent rates, no fees and even cashback.

 

[OCGuy]

Dont do it. They are considered the same as a bankruptsy by many lenders.

 

[dartworth]

try creditboards.com

lots of info on the forums...

 

[DaveSimmons]

Be very careful. Many of the "non-profit" companies trying to "help" you were actually set up as shills by for-profit companies to drive business their way.

For example a non-profit CreditHelpers4Life might help you get a loan consolidation with HappyLoanCo when behind the scenes the same people run both and HappyLoanCo charges more than other loan companies.

 

[JohnCU]

don't do it dude, they close out all your accounts and like, the first month of the consolidation, you go "late" because the first payment goes to them.

they told me that and i said i wasn't interested and yet they still call or email me once a month trying to get me to do it.

 

[EagleKeeper]

A write off of more than $1200 or 20% becomes taxable income - you should know that:disgust:

 

[Walking in Circles]

no, i'm not stupid

 

[alkemyst]

Originally posted by: Common Courtesy
A write off of more than $1200 or 20% becomes taxable income - you should know that:disgust:

there are a lot of things changing now in regards to debts.

I am trying to explore options that work for both parties.

I will check out creditforums.

It's just sucking the debt is so slow to go down. I can manage the payment, but $1200 or so can go a long way each month.

 

[dlx22]

I think if you use one of those companies the debt shows up on your credit as settled in full rather than paid in full once paid off, which is a negative mark on your credit, but it is better than not paying at all and having the accounts charge off.

 

[sportage]

They actually have little power in lowering finance charges or terms.
So basically, instead of writing out 10 checks a month to creditors, you write out one check for the same total as the 10, give it to the dept consolidation comp., and they do the stamping and mailing to the 10.
In short, you might as well deal with creditors directly, and do your own stamp-mailing.
They have little if any power on your behalf. Do the direct dealing yourself.
And its true, on your credit report it is looked upon as bankruptcy. Your credit will be
trashed on your credit reports.

 

[Injury]

Just keep in mind that most of these places aren't doing charity work here and that they are just looking to make fast money off of other people's inability to manage money.

The way I understand it is that they buy whatever debts they can by trying to settle with your creditors for lower amounts, tack on a small percentage then STILL charge you interest as you try to pay it down.

The best plan to get rid of debt is to:

a) Stop purchasing on credit
b) Set up a strict budget with a realistic timeline that can tell you, down the the month or week, when you will be rid of these debts.
c) Ignore anyone that tells you there is a magic way to make it all go away. You didn't get in to debt in a few months, you aren't going to get out of it in a few months.

 

[PokerGuy]

Originally posted by: alkemyst

Originally posted by: Common Courtesy
A write off of more than $1200 or 20% becomes taxable income - you should know that:disgust:

there are a lot of things changing now in regards to debts.

I am trying to explore options that work for both parties.

I will check out creditforums.

It's just sucking the debt is so slow to go down. I can manage the payment, but $1200 or so can go a long way each month.

Huh? There are lots of things changing? As far as I'm aware the rules of the game are still the same. They say they can "reduce" your debt, that means they are going to turn around and tell your creditors that you'll pay half or file for bankruptcy. The creditors will then write off half of the debt, and you're going to get a 1099 and the 'forgiven' debt will become taxable income. You're going to owe a lot of money, and your credit is going to be shot for a looooong time. Forget this 6 months BS. Remember that they are not out to benefit you, they are out to benefit themselves and line their pockets, and they'll tell you anything to get you on board.

 

[alkemyst]

Guys, in a thread like this 'I think' and the like probably mean you don't need to make a comment. Also no one was asking for all the debt to just go away. There are plenty of legitimate debt CONSOLIDATION places. I am trying to find one.

 

[ponyo]

http://nfcc.org/

If you can make the payments, suck it up and deal with it. It sounds like you were living beyond your means with your 0% furniture when you don't even have to money to pay for it when it comes due. $27k and $1,200 a month payment is definitely manageable. You need to bust your ass and get a second job like delivering pizza or something if need be.

 

[zixxer]

You're a complete train wreck.

 

[rasczak]

Originally posted by: alkemyst
Guys, in a thread like this 'I think' and the like probably mean you don't need to make a comment. Also no one was asking for all the debt to just go away. There are plenty of legitimate debt CONSOLIDATION places. I am trying to find one.

I have done this several times. TBH, if you are ABLE to make your monthly payments and stick to a good budget, then you are better off just paying the cards down yourself. I say this because my credit has been shot mostly due to dealing with most companies like this thinking it would help me and make things easier. unfortunately, i did not realize what they did in order to get my "payments" lowered. Just deal with the lenders directly and see if you can negotiate a lower monthly payment for each card, then the savings you get from lowering your total monthly paymetns you can put into one card to start paying that down. then move on to the next card.

Cliffs: If you value your credit score, then talk to the lenders directly and get your payments lowered through them.

If you do not value your score and want the easy way out then pm me and I will forward you a link to a debt consolidation company that was fairly decent.

 

[cKGunslinger]

They don't do anything you can't do yourself, without a 25% fee.

 

[mmallern2000]

I've noticed something interesting here. Alkemyst is often thought of as a troll on the forums, yet when asking for help, a lot of others troll for him.

 

[rudder]

Just stop paying your bills. Relief is only a couple of months away. I have already stopped paying my mortgage. After I am in the arrears for 90 days I can get a much better rate.

 

[Vette73]

Originally posted by: JohnCU
don't do it dude, they close out all your accounts and like, the first month of the consolidation, you go "late" because the first payment goes to them.

they told me that and i said i wasn't interested and yet they still call or email me once a month trying to get me to do it.

Yep how it works, as my brother in-law looked into it, is you give them money and they call maybe once a month. If they lower the price then they pay if not then they don;t. The don't pay for a long time, i.e. you are missing payments, and hope they will take what they can get. The problem is by the time they cut the amount owed it might be back where it was before all the late fees and % built up.

There are some good ones but most are scams and/or like i said above.

 

[OpenThirdEye]

Check out Dave Ramsey. This guy saved my ass financially!

I had a very good chunk of debt and although the process was slow and a bit painful at first, it all started coming together more quickly as time passed. I'm on my second year of trying to rid myself of debt, but it's definitely lower than what it was!

Yes, I did end up taking on more sidework to help out with this.

I still take some of his advice with a grain of salt (i.e. I'm not going to try and pay off my mortgage in 5 years), but his books have helped me tremendously!

If you don't feel like reading a book or two of his, you can always just Google the snowball effect. Just try and have a small emergency fund built up (~$1000) first so that you don't have to resort to using credit cards.

 

[alkemyst]

Originally posted by: Naustica
http://nfcc.org/

If you can make the payments, suck it up and deal with it. It sounds like you were living beyond your means with your 0% furniture when you don't even have to money to pay for it when it comes due. $27k and $1,200 a month payment is definitely manageable. You need to bust your ass and get a second job like delivering pizza or something if need be.

WTF???? I really didn't have much of a choice going back to college the second time, but take on debt.

While the payment is manageable I was looking for some way to move the balance quicker. I hope you are still living with mom and dad with such a self-righteous attitude like that.

Where the fuck did I say I cannot make my payments. I have not been late, I am current and I pay MORE than the minimums...excuse me if you have a learning disability or something though. You may want to stick to simpler threads if that is the case.

What I am trying to find is a place that can take on a consolidation really...if they give me a break on the principal that would be great (not looking for them to then short pay my current creditors though).

I haven't been able to find a place that looks at the consolidated debt instead of the full consolidation PLUS the existing debt.

I am checking out some of the other links suggested though.

 

[alkemyst]

Originally posted by: rudder
Just stop paying your bills. Relief is only a couple of months away. I have already stopped paying my mortgage. After I am in the arrears for 90 days I can get a much better rate.

Thanks for helping screw up our economy. You do realize that 'relief' is not free. Both tax payers will cover that plus we all get screwed by what is basically billions of dollars being created out of pixie dust.

 

[alkemyst]

Originally posted by: mmallern2000
I've noticed something interesting here. Alkemyst is often thought of as a troll on the forums, yet when asking for help, a lot of others troll for him.

QFT.

They are just pissed I am right all the time. Thank God I am not damned to their lives.

 

[TallBill]

Originally posted by: zixxer
You're a complete train wreck.

Well, not really. If he can pay his bills every month then it could be a lot worse. I personally wouldn't go to a consolidation company.

I was laughing about the furniture thing as well, only because I know someone who carried a lot of debt and bought 2 couches for like $4,000 on credit. I don't know what OP's furniture situation was. I spent about $1200 on all furniture including a bed and got a free couch from a relative. I'm cheap though