Debt Consolidation

[illusion88]

I admit, I have made some mistakes. I don't make much money and I work in the service industry, ski instructing and waiting tables. Times are tough right now. I only have one job and business is slow. I'm hurting. I have four credit cards and a car payment. With business being so slow I find it hard to make even the minimum payments on them. The next two or three months aren't going to be any better. I probably owe about 1/4 of what I make in a year in credit card debt, maybe more.

Shit

So, how do these debt consolidation companies work? I know that it's a loan that you pay back. Will it lower the amount of interest I currently owe? If I do this will I be making a lower monthly payment then my combined CCs or would it be higher? I know I can't afford anything higher, not right now.

This upcoming ski season I will be making more money, probably double my monthly income. During that time I try and save/pay off as much as I can. In the summer I go back to rationing food and counting pennies.

Has anyone done this? what was your experience? What company did you use? I assume that it affects my credit score. I had a decent credit score until I missed some payments and was late on others. I bet it's a lot lower now.

The past already happened. I know I made mistakes. I thought I could handle it but times changed. It's time to fix it now.

 

[Evadman]

/lawnchair

 

[ViviTheMage]

Might want to check out forums like these :

http://creditboards.com/forums/index.php?act=idx
http://www.debtconsolidationcare.com/forums/

They will have a lot more experience then us

 

[Darthvoy]

I've worked for a legit "credit consolidator" you have to be careful because there are a lot of companies that will tell you to miss payments before they can negotiate with your creditors, which will destroy your credit. Have you attempted to talk to your cc companies? Many of them have hardship programs. They will temporarily lower your payments to something affordable until you get back on your feet. If you are already behind, you can try hopefinancialusa.com. I worked for hope as a csr in the past and I know they are legit. They have in house attorney. You may want to give them a call and see how they can help you. You have to have at least 10k in unsecured debt before they will help you.

 

[EagleKeeper]

Some of the non-profits will assist you.

They will look at your situation and then work with the lenders to either lower your rate, waive fees, and/or write off major interest accumulations.

The commerical ones will try to get you into a loan at a lower rate, but no guarentees that the loan will cleanup your existing problems.

 

[lokiju]

First off they won't do a damn thing to help you if you're current.

Though I would suggest calling them all up and saying you're going to start missing payments unless they can do something to help. Be kind and be firm about it.

I hate to even suggest it but honestly you need to be way beyond delinquent with them before they play ball.

I was in a tight situation back in 2005 where I was in an accident and put on forced leave and workers comp pay at just over 50% my normal pay for over 6 months. I couldn't work, I couldn't make more money and after 6 months of the situation I finally quit and found another job where I could make money. But in that six months I racked up a large amount of credit card debt and am to this day still paying them off one by one.

Just Monday someone came knocking at my door and served summons for a past due debt from then.

The total due was just over $3,200. I just called up the lawyers office that was listed on the summons and played dumb and said "whats it all mean!??!" they explained and I said "of course I'm very low on money, otherwise I would have paid it already, would it be possible to pay less than the full amount" they said the best they could do is $2,100. I said that's more than I have so they asked how much I had. I said $1,500 tops but I'd have to use it for other debts soon.. they put me on hold, came back and said that's doable.

A few key points when doing debt settlement negations to keep in mind is that you need to always get EVERYTHING in writing before you give them a dime.

Always make sure you get something stating the agreed upon amount will settle the debt in full.

Never pay a past due debt with a check or credit card from your personal account, only pay with a cashiers check or money order.

Never call from your real number if you can avoid it, or at the very least do a caller ID block otherwise if things really do go south or you can no longer deal with them they won't be harping on you non stop.

A previous debt about 2 years ago came knocking on my door also with summons for a much larger amount, I was afraid and scared by seeing legal papers, court numbers, etc so I called a lawyer up. He said it'd be a piece of cake to get it taken care of and knocked down to 33% to 50% of the original debt and he'd be done with it all within 3 months.

1.5 years later and they were so terrible at actually doing anything that I was getting no where. I finally fired him and called up the people direct and had that debt settled for 40% the original debt within 3 weeks.

Moral of the story, if you can pay some company to do this stuff for you then chances are, if you're willing to spend some time researching what to do/say/ask online first, then you can probably do it better, faster and for less money.

Credit boards (http://www.creditboards.com) is where I went on the recommendation of RossMan at the time when I was dealing with all these issues back in the day and I learned a lot there. If you search on there you can find nearly all your questions are probably already answered. If they're not then you can sign up and post but all post require mod approval and review so it can take some time to get responses.

 

[jdjbuffalo]

I recommend staying away from debt consolidation companies. Some will do more harm than good.

As others have said go to http://www.creditboards.com and they will be able to help you figure out what's best.

 

[Gothgar]

+1 for credit boards

though, none of us would know anything about having bad credit right? we all have Ferrari

 

[OCGuy]

FYI, a mortgage lender looks at your use of Debt Consolodation companies the same way as they would a BK. Just in case you were thinking about buying/refinancing in the next 4 years.

 

[OutHouse]

Originally posted by: jdjbuffalo
;I recommend staying away from debt consolidation companies. Some will do more harm than good.

As others have said go to http://www.creditboards.com and they will be able to help you figure out what's best.

:thumbsup:

do not use them. our friends son and his new wife did this and got totally fucked. The company did not make any paments on time and did not even make the min payment. late fees upon late fees added up. they had to close their checking account because this company had access. We talked them into filing bankruptcy and it got the creditors off their back.

you sound like a candidate for bankruptcy. but do not do any consolidation service.

 

[quackerww]

Every thing they can do you can do better.

 

[alkemyst]

i tried to use some of the better companies..the problem is if you have good credit rates chances are their 'negotiated' rates are going to be higher. You don't really save too much with principal reductions as the fees and gains on those eat into them...it works for those with shitty rates though and long far gone. The card companies are willing to do anything to avoid having to sell off that debt to a collection agency.