debt management programs

Archive for April, 2010

After careful consideration and with the help of some pprofessionals as to what to do in our financial situation we have decided to handle our debt negotiations ourselves instead of using one of these debt settlement companies out there. I typed up a proposal letter to request setteling on our debt up to 40-50% and am requesting a payment plan. My question is do I send the letter certified mail to the normal payment address on our statements or do I have to ask for a seperate address where this sort of thing is handled?

Honestly, I would call your creditors and try to negotiate a settlement with them over the phone. Once you have reached an agreement you can ask them to fax or mail the settlement letter to you. Then, pay only after you have read the letter and verified that the terms are what you negotiated over the phone.

Credit card companies usually have two addresses: 1) payment address, 2) correspondence address. If you send a letter to the payment address you run the risk of your proposal being ignored.

I chose to use a debt settlement company to help me get out of debt because I liked the idea of having someone who does this professionally handle everything for me from start to finish. It hasn’t been a painless process, but I can’t imagine doing all of this on my own.

Best of luck to you.

What would you suggest for a 20 year old who is about $2500 in debt…I want to improve my credit but I have 4 negative accounts on my credit report. Would you suggest I get a credit counselor and have them give me budget plan to settle my accounts. Would this help my credit score? Has anyone ever went through Money Management or Consumer Credit Counseling?

If you are considering credit counseling, make sure the company is a member of NFCC (http://www.nfcc.org/). These are legit, non-profit companies that can review your finances and advise you how to proceed.

Paying off derogatory items on your credit report will not improve your score. The damage is already done. However, creditors look at your whole report,not just the score. Paid old debt always looks better.

You can negotiate settlement of derogatory items yourself. If the derogatory is more than 3 years old, offer 25%; 2 or 3 years old, offer 50%; less than 2, offer 75%. Lump sum gets the best deal. Payment plans have to be short term — less than 6 months. Get any agreement in writing and keep it, along with your payment proof, forever. Do not give collectors direct access to your bank account.

You will need at least 24 months of consistent, on time payment to see improvement in your score.

in terms of credit reporting

I know they both try to achieve one thing, that’s paying off your debt ..

Credit counseling….I would first and foremost recommend Green Path Debt solutions…I worked with them and they are great. I am not affiliated with them.

With Credit Counseling they go over your budget with you and analyze your debts. They will tell you if they are able to help you or if you should declare bankruptcy. If they can work out a repayment plan without putting you in the poor house each month, they will negotiate with your creditors things like no interest, smaller monthly payments, etc. They may even be able to negotiate amounts.

I was told to file bankruptcy and I did not listen so I signed up for the biggest debt settlement place you see on the internet…someone posts their links on here all the time….supposedly featured on MSNBC (a picture only…they exaggerated that one). Well the debt settlement places promised to settle my debts for 40% of the amount. Well I enrolled a few accounts and found out that a few of the places would not even work with this settlement places which led to me being sued by one of them and then my husband and I decided to just pay off his couple accounts and I would take the hit. So I kept a few accounts that were in my name only enrolled with this settlement place. SOOOOO……they then tell me that there is a 15% fee which is 15% of the total debt enrolled. Well for three months they don’t do anything for you till you pay three huge chunks of money to them. Then after that they start working with your creditors but they don’t contact them. They wait for the creditors to contact them to negotiate.

I had 4 accounts enrolled with them. They tried to settle 2 to no avail. Then they did settle two accounts for me but by the time I calculated it all out…I lost money on it by paying the company their fee and paying off the two settled credit cards. It washed out. So I did not save any money by "settling".

I still ended up having to declare bankruptcy on a few personal accounts that were in my name and not joint debt because of one company trying to sue me and then because the other two places would not settle.

So AVOID the debt settlement places at all cost.

Find a reputable credit counseling service like Green Path Debt Solutions in your area and go see them. They will help you and tell you what you should do. If they tell you to file bankruptcy than do it…I regret not following their advice two years ago and suffering with all these debt issues the past couple years till I finally bit the bullet and filed bankruptcy. I don’t regret filing either.

People can call you names and put you down but no one can pass judgment on you till they have walked a mile in your shoes and dealt with what you have been dealing with.

Good luck.

I have 6000 dollars in bad debt that are hospital bills. Is debt consolidation a good idea? 150 dollars a month for 6 years is what they told me?????

I’m guessing you are using a debt consolidation service based on the numbers you provided. And, yes, it looks like you are digging yourself a bigger hole. Just go to your bank and tell them your intentions (get out of debt) and can they help you with debt consolidation or refinancing of your existing debt.

Debt consolidation, in the generic sense, simply means taking out a single loan and paying off all the others with this loan. You don’t need to pay a service to do this.

The service you are using is asking you to exchange your current credit card debt that I’m guessing you are paying somewhere between 12% to 18% interest for a new loan that you will pay 22% on for six years. Doesn’t sound like a good deal to me.

You bank may be willing to extend out your loans, thus reducing your monthly payments or maybe even lower your interest rate to help you with cash flow.

If your bank isn’t willing to work with you, there may be others that will.

I have about $50000 in credit card debt and as of now have a excellent credit history. I just got laid off and there is no way i can pay my minimum payments. I know filing for bankruptcy is one option but is there other options. Paying is not an option.

Only way is to clear your debits and make arrangement with bank to pay it in installments. Or your credit history will get spoiled for issuing of any future credit card or loan.

I own a debt settlement company and am sick of BS live transfers. I do not want to robodial (its ILLEGAL) so don’t bother saying that I should. I want TV leads because they seem to be the highest of quality lead type. I just don’t want to get ripped off…. Personal experiences welcome. Thx

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Hi, I figured this was worth a shot. Here’s my sob story. I lost my job early in the year, didn’t qualify for UE, had to move, and have since gotten a new job and am starting to feel ok. Problem is, I have about 5 credit cards with about $32K that I haven’t paid on in 6 months (maybe 7 at this point). I am ready to start making payments again but now the minimums are so outrageous there is no way. Where do I start? Anyone have any advice on how to get back on track? I have had great credit up until this and I just want to get my head back above water so I can go back to sleeping. I’ve heard nightmares about debt management/settlement companies, and I am skeptical of credit counseling since they seem to be on the credit cards’ side. Please help. I also have a leased car and student loans….oh man.
I know I won’t come out unscathed…you will probably all laugh but I am a loan officer and know how credit works. I’m really just looking for advice on how to start getting back on track. I do not want to claim BK, not do I think I need to. Will credit card companies really work to help you get on track again? I never missed a payment (or was even late) before this all started….

I don’t have enough info about your whole financial/asset situation. OK, you lease a car. Do you own your home or rent? If so, then it sounds like you have no assets.

Lets look at your debt. You owe $32K in credit cards. How much are you paying toward this each month? Unless you are paying $1200 you will be paying this off for the next 5 years. Can you afford that?

Since you haven’t paid on them for 6 months, you can pretty much guarantee that your credit is trashed, and the collection agents will soon be coming after you.

So unless you have found a very good job, you are going to have an uphill battle for the next several years.

Bankruptcy is always the last resort. But you are in a situation that I’ve seen many people fall into.

Credit counseling places are a scam. They are doing the same things that you can easily do yourself, but you just need to do your research.

What they do is contact your creditors and negotiate a lowered balance, and maybe lower interest rate. You pay the credit counsoler to pay off these bills, and you end up paying this guy a fairly hefty fee.

The reason people find it difficult to do this themselves is because most credit card companies are extremely difficult to work with. But since you are already a phone call away from filing for bankruptcy, use that to your advantage.

Figure out exactly how much you can pay on your debts. Lets assume it’s $400 a month. Over a 5 year period you can pay $24,000. Now contact your creditors and see if they will reduce your debt to that amount, and freeze your interest/late fees. Be prepared to put up your financial information to prove you are in a serious situation. If everyone agrees to help you out, stick with that payment plan.

But unfortunately we don’t live in OZ. In the real world the credit collectors are not one bit interested in helping you out, all they want is their money. Just remind them that if you file for bankruptcy, they will get a fraction of what you owe them. Sometimes it works. If they won’t work with you, then file bankruptcy. Your goal is to get out of debt within 5 years. If they won’t help you then the courts will.

Unfortunately, if your job is fairly good, you will not be able to qualify for a chapter 7. They will put you into a 13, but at least all of your credit card late fees and interest will be frozen. You will be placed on a plan to pay this debt over 5 years, and after that you can start clean.

I myself don’t listen to fat slob drug addict lunatic liars or other delusional swine. And I do not quite understand how many psychotic episodes or hallucinations are required to find that degenerate pig making something resembling sense.

But it kind of figures. I mean, the reactionary filth who listen to this scum bag and his moroic delusions are non-working low life types, no jobs, looking for scapegoats, and they very well might be up to their butts in unsecured debt.

Why not? They all seem to be the selfsame uselss, ignorant unapologetic gluttons and criminals. It just makes sense. These pathetic, conscienceless reactionary bozos spend ALL their time looking for scapegoats, and this propaganda-pumping feeb supplies plenty of lies and absurd exaggerations for all the crazies.

See Cheney for examples.

I am approximately $25k in debt, should I use a debt consolidation agency?

well, you got SOME replies but here’s some great reading, might take you a while though:
http://credit-cards.ebookorama.com
http://finance.ebookorama.com
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
if you get any luck please don’t forget about me lol, hope it helped you!

I know a lot of people are filing bankruptcy on credit card debt. I did this myself and got 35,000 dollars worth of credit card debt discharged. That means my credit card companies lost a lot of money on me. I know my credit is ruined but oh well. Unsecured debt should be more difficult to get. It is still easy to file bankruptcy if one meets the means test. Your opinion, please.

I had 20K that was discharged 5 years ago, but I learned my lesson. many people don’t.

I don’t ever want to be in debt and in that position ever again in my life.

I agree that loans should be harder to get, and it may very well come to that point. Banks will be more careful in the future I’m guessing about who they give money to and how much.

Debt is a BAD idea.