Debt reduction question - Companies who negotiate settlements for you..

[busmaster11]

So there's companies out there who negotiate with your CC companies to cut the debt by more than half... They close out your accounts (frozen so no more interest accrues), make you save up about 40% of a given account's debt, then start negotiating for you... On top of that they charge 15% or more of your total debt for attourney fees.


one such place is http://www.consumerlegalcenters.com/ and another is www.zerodebtnow.com

The end result is you pay off your debt in 12-36 months and your credit report will say that you've paid it all off, instead of bankruptcy...

Oh yeah, everyone says NOT to goto a nonprofit Credit Counseling Center, so I was wondering if this was a good alternative.
Has anyone had any experience with these practices, and how good are they? how big of a hit is this to your credit rating?

 

[busmaster11]

bump...

 

[busmaster11]

last shameful attempt at getting a response...

🙁

 

[Evadman]

*Code Blue* Paging RossMAN to Off Topic, RossMAN to Off Topic. *Code Blue*

 

[Vic]

scams that will ruin your credit... :|

 

[aphex]

I used to work for one last summer... They are not for everyone, but can be VERY helpful for some...

 

[BunLengthHotDog]

ANYTHING those companies can do, you can do yourself...Plus it goes on record that you received help to pay off debt which, while not reducing your overall score on credit reports, can indeed hurt you.

 

[tm37]

You credit file will not read paid as agreed rather settlement.

Also some companies will issue a 10-99 so if they settle for 2K on a 4K debt you would have to pay tax on the addional 2K which is infact INCOME.

How much debt do you have?

 

[MrBond]

Originally posted by: Vic
scams that will ruin your credit... :|

Yes indeed. The local cbs station has a representative from the BBB on every tuesday at noon, he was just talking about some online company who spammed out a bunch of emails telling people they could consolodate their debt. They took all the info (ssn, etc), and sold it to people.

Check out whatever agency you plan on dealing with very well. You don't want to get your identity stolen.

 

[busmaster11]

Originally posted by: tm37
You credit file will not read paid as agreed rather settlement.

Also some companies will issue a 10-99 so if they settle for 2K on a 4K debt you would have to pay tax on the addional 2K which is infact INCOME.

How much debt do you have?

Are you sure you're referring to a debt consolidation company as opposed to a consumer credit counseling or nonprofit ccc place?

My debt is top secret. 🙂