PSA: "Debt Relief" outfits

[Okla-homey]

Today, I watched a lady break down in tears in court who claimed to have paid some out-of-state "debt relief" outfit $8500.00, allegedly to help her negotiate her way out of hock with her creditors but to absolutely no avail. It appears these type outfits are becoming all too common and desperate folks who are already grasping at straws are apparently easy marks. Therefore, although I know the vast majority of you folks are too savvy to be similarly taken in, here goes:

Dear People,

As the economic situation continues to slide south, if you find yourself with too much month left at the end of your paycheck, and the creditors start pressing, try to avoid the temptation to give what little cash you have left to some "representative/advocate/personal negotiator/debt relief specialist," etc.

Perhaps some are legit, but people who ask for money up front from a person already in dire financial straits while promising to fix things too often are not. Use your brains. If it were as simple as paying someone 5 or 8 grand to make 30K worth of debt go away, wouldn't everybody do it?

The simple fact is, short of bankruptcy, it's extremely unlikely anyone can make creditors "go away" for good for a fee. What's more, if you have that kind of cash available, its generally better to contact your creditors, explain your situation and tell them you are sending what you can now in good faith and will send more when you can. Froze, feel free to weigh-in here if I'm off the mark.

That is all.

[OUHOMER]

I always wondered if i owed Visa or Mastercard $10,000.00 how someone could get that down to $3000.00.

Or the IRS for that matter

[yermom]

some of the credit card companies will deal with 3rd parties like this and actually refer you to them. they end up being like collections departments for them

i'm assuming those are not the fly-by-night variety

you can actually pay a fraction of your debt to your creditor and be done. some apparently send tax forms due to the "income" of them forgiving said debt

the banks are kinda nervous about never seeing a dime, so will take what they can in lots of cases.

the collection agencies i've heard pay as little as 7% for the debt that they then add fees/interest whatever and try to collect from you


Homey, this is in addition to what you are saying, which is also true. the thing with dealing with the 3rd party is that even if they don't take your money and run, they gots to get paid somehow. basically they act as a go-between if you aren't willing to negotiate with them yourself

[Frozen Sooner]

Today, I watched a lady break down in tears in court who claimed to have paid some out-of-state "debt relief" outfit $8500.00, allegedly to help her negotiate her way out of hock with her creditors but to absolutely no avail. It appears these type outfits are becoming all too common and desperate folks who are already grasping at straws are apparently easy marks. Therefore, although I know the vast majority of you folks are too savvy to be similarly taken in, here goes:

Dear People,

As the economic situation continues to slide south, if you find yourself with too much month left at the end of your paycheck, and the creditors start pressing, try to avoid the temptation to give what little cash you have left to some "representative/advocate/personal negotiator/debt relief specialist," etc.

Perhaps some are legit, but people who ask for money up front from a person already in dire financial straits while promising to fix things too often are not. Use your brains. If it were as simple as paying someone 5 or 8 grand to make 30K worth of debt go away, wouldn't everybody do it?

The simple fact is, short of bankruptcy, it's extremely unlikely anyone can make creditors "go away" for good for a fee. What's more, if you have that kind of cash available, its generally better to contact your creditors, explain your situation and tell them you are sending what you can now in good faith and will send more when you can. Froze, feel free to weigh-in here if I'm off the mark.

That is all.

There are some legitimate debt-counseling services available. In fact, I believe the Bankruptcy Reform Act requires that debtors go through third-party debt counseling before their 13 or 7 plan can be confirmed.

The only one I would trust is Consumer Credit Counseling. CCC is a non-profit organization that will analyze your bills and will counsel you on whether you should just budget better, whether you actually need help with your bills, or if you are completely insolvent and should file for bankruptcy.

If you are in the second category, CCC acts basically like a Chapter 13 trustee-they collect money from you at the beginning of each month and pay your bills out of that.

Part of their service is that they will negotiate with your creditors and help work out a reaging of any debt you are behind with and a lowering of monthly payments and/or interest rates.

They do not (last I checked) require any direct fees from the debtor. Instead, they are paid a "fair share" contribution of any payments disbursed to the creditor of (I think) 15%.

CAUTION: IF YOU AVAIL YOURSELF OF CCC OR ANY "DEBT RELIEF COUNSELING SERVICE" IT WILL AFFECT YOUR CREDIT

[Okla-homey]

There are some legitimate debt-counseling services available. In fact, I believe the Bankruptcy Reform Act requires that debtors go through third-party debt counseling before their 13 or 7 plan can be confirmed.

The only one I would trust is Consumer Credit Counseling. CCC is a non-profit organization that will analyze your bills and will counsel you on whether you should just budget better, whether you actually need help with your bills, or if you are completely insolvent and should file for bankruptcy.

If you are in the second category, CCC acts basically like a Chapter 13 trustee-they collect money from you at the beginning of each month and pay your bills out of that.

Part of their service is that they will negotiate with your creditors and help work out a reaging of any debt you are behind with and a lowering of monthly payments and/or interest rates.

They do not (last I checked) require any direct fees from the debtor. Instead, they are paid a "fair share" contribution of any payments disbursed to the creditor of (I think) 15%.

CAUTION: IF YOU AVAIL YOURSELF OF CCC OR ANY "DEBT RELIEF COUNSELING SERVICE" IT WILL AFFECT YOUR CREDIT

That's kinda what I figured but didn't articulate well. IOW, if the debt counseling service doesn't get paid via a reasonable percentage from the revenue stream, and instead asks for up-front fees or retainers...RUN AWAY!

[soonerbrat]

There are some legitimate debt-counseling services available. In fact, I believe the Bankruptcy Reform Act requires that debtors go through third-party debt counseling before their 13 or 7 plan can be confirmed.

The only one I would trust is Consumer Credit Counseling. CCC is a non-profit organization that will analyze your bills and will counsel you on whether you should just budget better, whether you actually need help with your bills, or if you are completely insolvent and should file for bankruptcy.

If you are in the second category, CCC acts basically like a Chapter 13 trustee-they collect money from you at the beginning of each month and pay your bills out of that.

Part of their service is that they will negotiate with your creditors and help work out a reaging of any debt you are behind with and a lowering of monthly payments and/or interest rates.

They do not (last I checked) require any direct fees from the debtor. Instead, they are paid a "fair share" contribution of any payments disbursed to the creditor of (I think) 15%.

CAUTION: IF YOU AVAIL YOURSELF OF CCC OR ANY "DEBT RELIEF COUNSELING SERVICE" IT WILL AFFECT YOUR CREDIT



and if you don't have enough money to pay your bills and you get behind, that will affect your credit too.

[Oldnslo]

CCC has done some really wonderful things for the folks I've sent their way. The ones who listened, anyway.

[OUHOMER]

Who the hell do call to get visa and mastercard to lower my interest rate? I saw a popup some where that promised to lower my interest rate by half. Than I deleted it

[Preservation Parcels]

Credit card companies have "retention specialists" whose sole job is to get you to stay with them. They are authorized to reduce your interest rates, erase late fees, and do everything short of sing and dance to keep you as a customer. Call the number on your bill and explain that you're considering moving your credit card to XYZ company that has offered you a better rate. You probably get these offers in the mail every day. Ask if there is someone with whom you can discuss your account before you move it. Be nice, and there's a good chance they'll at least meet you halfway.

[Frozen Sooner]

Disclaimer:

My mention of Consumer Credit Counseling Service should in no way be taken as an endorsement of them as a debt counseling service over any other debt counseling service and is not meant to imply that other services do not provide advertised service.

I am happy to say that in my 12 years of consumer credit experience, CCCS has been the only company that I can recall that has always followed up on their promises to both debtor and creditor.

That being said, pay your bills. :D

[Frozen Sooner]

and if you don't have enough money to pay your bills and you get behind, that will affect your credit too.

Yes, it will. If I implied otherwise, I apologize. I sort of thought that was a given.

My point was that many debtors get the impression that simply because they are on a credit counseling plan that their credit rating does not suffer. This is almost 100% of the time not true (though many creditors have begun to report a tradeline being handled by CCCS as being paid as agreed but handled by CCCS.)

[fadada1]

"Moose. Rocko. Help Judge Smails find his checkbook."