HAS ANYONE GONE THROUGH DEBT SETTLEMENT HERE? I AM DEALING WITH THIS COMPANY TO SETTLE MY CREDIT CARDS BECAUSE I AM HAVING MAJOR FINANCIAL DIFFICULITIES. I STARTED PAYING THEM IN JUNE. THE CREDIT CARDS DO NOT RECIEVE PAYMENT UNTIL THEY SETTLE WITH THE COMPANY BUT I AM SEEING MY CREDIT REALLY GETTING SCREWED UP RIGHT NOW BECAUSE THEY ARE NOT GETTING ANY PAYMENT. THEY ACTUALLY WILL NOT GET PAYMENT FOR ABOUT 30 MONTHS. IS THIS A GOOD WAY TO GO OR SHOULD I JUST FILE FOR BANKRUPTCY?

 

IMO, the best way to settle credit card debt, if you can swing it, is to get a consolidation loan from the bank. It's like a second mortgage on your home, the interest rate is only about 6%, and the terms are 10 years. Second piece of advice - tear up all the credit cards except one. Been there and done that.

I distrust the companies that say they will take care of your credit cards because they are in the business to make money and like you say, the credit card companies are not paid promptly which hurts you. With the consolidation loan, the credit card bills are paid immediately. Good luck.

John (DH)

 

YEA BUT CAN I DO IT WHEN I ALREADY HAVE A HOME EQIUTY LOAN ON MY HOME FOR REPAIRS?

 

Call the credit card company directly, explain your situation, and work out a payment plan that allows you to pay them off and stay out of the poor house. Took me 5 years to get back outa that hole, and it put a spot on my record, but everyone is happier in the end. The companies still got their money and I got out of debt without declaring bankruptcy.

 

We used a Christian Debt service and will be 100% debt free in 4 more years with greatly reduced interest rates. PM me for details.

 

Fortunately, I've never had to use one of these services, but this arrangement doesn't sound legal or ethical at all!

You're making payments, but the credit card companies are still reporting you late for the next 2 1/2 years??? That means that until 7 years after that, you'll still have that mark on your record. I always thought a reputable company would work with the credit card companies to suspend collections and reporting immediately while you're paying the bills.

Is the company you're working with non-profit or for profit? Because if it's the latter, then I believe at least your first payment to them goes straight into their bank account and your debtors don't see a penny. Then they skim off from each payment for their fee.

I would suggest working out a plan with each of your debtors directly. Lots of leg work, but in the end, it will save you money. And you can negotiate with them a debt reduction or interest rate reduction and payment plans; what your debt reduction company should have been doing from the get go, rather than taking your money and not paying your bills!

Wish I had more to offer. You can probably find a lot of information by Googling "Debt Reduction" or some variation of that. Good luck!

 

ITS A COMPANY CALLED DEBTXS. I MAY HAVE MADE A BAD CHOICE

 

I just checked online with the Better Business Bureau. Here's what I found:

Link is here.

 

If you take one of the settlements, it will go on your credit as a charge off, which isn't good. They are probably talking about taking about 1/2 the balance or so right? You're credit report will basically show that you paid about 1/2 what you owed and they closed your account. Not good.

 

A quick look at their website shows that they are simply getting you to set up a savings plan (of which they take 15%) and they try to negotiate your debt down. In the meantime, you are still delinquent in your obligations to your debtors and they will still dun you, charge you exhorbitant interest rates and, of course, report your "deadbeat status" to the credit reporting agencies.

Personally - being a type A sort - I'd call each of my creditors and ask them to reduce my debt, lower the interest rate and establish a payment plan. If they won't reduce your debt, try asking if they will freeze your balance (eliminate interest) and let you pay off what you owe now over XX months. Most are willing to work with customers who are up front about their difficulties and want to honor their debts.

Of course, your ultimate "trump card" is bankruptcy, which none of your credit card companies want to see you in, because then they lose any say in how much money they can recover. You might remind them - if the seem unwilling to work with you - of this fact and that if you can't reach some agreement, then that may be your only option.

Bankruptcy does have it's very bad side and it's not something you want to have to do, because it causes you as much trouble as your debtors, so keep that as a last option. And if you do have to do that, don't EVER sign anything that says you will pay a company anyway... it's even illegal for them to ask, though they will.

Disclaimer: just information I've picked up along the way. I'm not a financial professional.

 

I am currently using a "debt management" group to dig our way out. After 2-3 months, the group was on track & paying our bills. Discover was the last to get on board and the least willing to negotiate. I think the monthly charge is $25. Reduced or eliminated all of the interest rates. Of course, now we have no emergency funds, but we've seen a drastic dip in our balances. Should have everything paid off in 5 yrs or so. PM if you want more info.

Personally, I would avoid bankruptcy and only as a last resort. I've heard they have been tightening the rules for bankruptcy because some have abused it.