Someone please explain credit card consolidation services

#1
OrangeEmpire

OrangeEmpire

The White Debonair
Joined
Nov 28, 2005
Messages
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#1
Honestly, with all the crap that is going on, how in the world does someone go through one of these programs and only end up paying back 60% of what they owe?

Does it kill or destroy your credit?

Does this crap contribute to any thing that is going on?

Is it Bankruptcy?
 
#3
#3
Its what congress should be focusing on right now! They need to fix the credit scoring and its not even being looked at.
 
#4
#4
I don't know anything about it, but it must be lucrative as hell because they spend big jack advertising.
 
#5
#5
Basically they get paid a percentage for brokering a deal between you and the credit card companies to settle for a percentage of your debt. It stops their calls for payment but it will ruin your credit. I know a couple of people who did this and it stopped their harassing calls but they can't get a loan for anything, and especially not now.
 
#6
#6
KB5252 said:
Basically they get paid a percentage for brokering a deal between you and the credit card companies to settle for a percentage of your debt. It stops their calls for payment but it will ruin your credit. I know a couple of people who did this and it stopped their harassing calls but they can't get a loan for anything, and especially not now.
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And the consolidation companies will sometimes let you fall into further default to gain a better bargaining position, this isn't really a positive for you.
If you are behind a few months you can offer a 50-60% settlement and they may take it. It will go on your credit that you settled for less than you owe, but that's better than never paying it. Just make sure that #1. You don't give them permission to withdraw from your checking automatically, and #2 that you get a letter from them stating that the account will be considered settled and closwed before you send in any check or money order.
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#8
#8
crazyguy said:
And the consolidation companies will sometimes let you fall into further default to gain a better bargaining position, this isn't really a positive for you.
If you are behind a few months you can offer a 50-60% settlement and they may take it. It will go on your credit that you settled for less than you owe, but that's better than never paying it. Just make sure that #1. You don't give them permission to withdraw from your checking automatically, and #2 that you get a letter from them stating that the account will be considered settled and closwed before you send in any check or money order.
Posted via VolNation Mobile
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:blink:

It seems really odd to me, so really you are paying the consolidation company and not your creditors?
 
#9
#9
there are different types. Some very good and some very bad. Contact the BBB first. Anyone offering to settle for less than what you owe steer clear of! They will ruin your credit. There are legit companies that can help. Care One Credit will negotiate a new lower monthy payment and you make one payment thru them for all creditors on program. They are legit but you will be responsible for entire balance. The benifit is you get a reduced % rate and late and over limit fees are waived
 
#11
#11
ANTI-DAWG said:
there are different types. Some very good and some very bad. Contact the BBB first. Anyone offering to settle for less than what you owe steer clear of! They will ruin your credit. There are legit companies that can help. Care One Credit will negotiate a new lower monthy payment and you make one payment thru them for all creditors on program. They are legit but you will be responsible for entire balance. The benifit is you get a reduced % rate and late and over limit fees are waived
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Currently my wife and I are going through financial peace university at church. This was brought up and I mentioned that my brother and his wife did it.

My brother told me that the company suspended their credit and that their credit was never really harmed.

From every thing I have read going through these companies really destroy your credit.

I have heard pro's and con's and quite frankly they scare me either way!
 
#12
#12
OrangeEmpire said:
:blink:

It seems really odd to me, so really you are paying the consolidation company and not your creditors?
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Yes. They negotiate a lump sum payment to your ceditors and then you pay the consolidation people. They settle with your creditors for a substantially lower total. Say you owe 10 grand. They settle with the creditor for a lump sum of $4500-$5500, then set up payments for you that will have you paying them about $12 grand. But the payments are low. Best bet if you have lots of credit debt is to take your highest interest debt and add $100 a month to the minimum payment and pay that amount every month until paid. Say the minimum is $90, you pay $190 each month until done. All the while paying the minimum on the rest. Then once the first is done, take that $190 you were paying and add that to the minimum of the next highest interest debt. You continue to do this until you are debt free in just a few years. And as long as you don't take on new debt, this works. You end up the last couple years paying a very high payment on your house or car or whatever and pay it off really fast.
 
#13
#13
superdave1984 said:
Yes. They negotiate a lump sum payment to your ceditors and then you pay the consolidation people. They settle with your creditors for a substantially lower total. Say you owe 10 grand. They settle with the creditor for a lump sum of $4500-$5500, then set up payments for you that will have you paying them about $12 grand. But the payments are low. Best bet if you have lots of credit debt is to take your highest interest debt and add $100 a month to the minimum payment and pay that amount every month until paid. Say the minimum is $90, you pay $190 each month until done. All the while paying the minimum on the rest. Then once the first is done, take that $190 you were paying and add that to the minimum of the next highest interest debt. You continue to do this until you are debt free in just a few years. And as long as you don't take on new debt, this works. You end up the last couple years paying a very high payment on your house or car or whatever and pay it off really fast.
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Thankfully we are debt free but we have never saved any money.

What you are talking about is the snowball in the financial peace university system.

I hate being in a conversation I know nothing about.
 
#14
#14
All I know is I have no credit card and no debt sans my mortgage.

If I can't pay cash for something I don't buy it.

I paid cash for all my furniture (saved for 1 year), my wife's engagement ring (three years) and my plasma TV. I have a $10,000 emergency fund for acts of god so I don't have to go into debt if something happens. And I just checked my credit score and it is in the excellent range.
 
#15
#15
OrangeEmpire said:
Currently my wife and I are going through financial peace university at church. This was brought up and I mentioned that my brother and his wife did it.

My brother told me that the company suspended their credit and that their credit was never really harmed.

From every thing I have read going through these companies really destroy your credit.

I have heard pro's and con's and quite frankly they scare me either way!
Click to expand...


My credit score did nothing but rise while enrolled. I have purchased new cars w/ great intrest rates, and am now two payments from being debt free w/ a 700 score. With there help I turned our situation around, and now also adopt the philosophy that if I don't have cash I don't buy it. That is w/ the exception of my house and vehicles....
 
#16
#16
ANTI-DAWG said:
My credit score did nothing but rise while enrolled. I have purchased new cars w/ great intrest rates, and am now two payments from being debt free w/ a 700 score. With there help I turned our situation around, and now also adopt the philosophy that if I don't have cash I don't buy it. That is w/ the exception of my house and vehicles....
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:good!:
 
#17
#17
Has been a long road to get to this point but I feel great about overcoming the debt, and know I will do what it takes to not be in that position again. Is a great feeling to know you truly own your belongings! I do not regret going thru this program and would recomend it to anyone!
 
#18
#18
Man I was lucky in the fact my older brother has shoved this stuff down my throat. So I saved as much as I could the first day I got paid (after college) so I had plenty saved for when I got married a few months ago.
 
#19
#19
JZVOL said:
All I know is I have no credit card and no debt sans my mortgage.

If I can't pay cash for something I don't buy it.

I paid cash for all my furniture (saved for 1 year), my wife's engagement ring (three years) and my plasma TV. I have a $10,000 emergency fund for acts of god so I don't have to go into debt if something happens. And I just checked my credit score and it is in the excellent range.
Click to expand...

I'm similar except I do owe on the engagement ring (12mos no interest was the reason). I owe on house/car but nothing else. I still use a CC for everything but pay it off every month. It builds miles and the protection of using a CC is very much worth it.

My fiance went thru the credit counseling service before I met her and it didn't do her credit score many favors. She is now starting to see an increase in the score but they always mention the credit counseling when going over it.

An emergency fund is almost required nowadays. I finally got her to start putting a part of her paycheck directly into savings. She was amazed at how easily it grew and she never missed the money. We paid off the wedding with it and still have over 3mos in reserve. So if posting on VN was to get me fired I have some time to find another job. :)
 
#20
#20
utvolpj said:
I'm similar except I do owe on the engagement ring (12mos no interest was the reason). I owe on house/car but nothing else. I still use a CC for everything but pay it off every month. It builds miles and the protection of using a CC is very much worth it.

My fiance went thru the credit counseling service before I met her and it didn't do her credit score many favors. She is now starting to see an increase in the score but they always mention the credit counseling when going over it.

An emergency fund is almost required nowadays. I finally got her to start putting a part of her paycheck directly into savings. She was amazed at how easily it grew and she never missed the money. We paid off the wedding with it and still have over 3mos in reserve. So if posting on VN was to get me fired I have some time to find another job. :)
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Good stuff. The only reason I was able to pay cash for the engagement ring is because her cousin owns three estate jewelry stores so I got one hell of a deal.

I've thought about doing that with a CC but I think I'm not disciplined enough yet, and I know my wife is not!
 
#21
#21
i TOO NOW CATCH MYSELF ON A SOAP BOX WITH MY YOUNGER COWORKERS AND COUSINS. I feel that had someone enlightened me a little earlier on I could have had a much easier row to hoe! But all is well now and Feels great especialy with the news my wife is expecting now!
 
#23
#23
JZVOL said:
All I know is I have no credit card and no debt sans my mortgage.

If I can't pay cash for something I don't buy it.

I paid cash for all my furniture (saved for 1 year), my wife's engagement ring (three years) and my plasma TV. I have a $10,000 emergency fund for acts of god so I don't have to go into debt if something happens. And I just checked my credit score and it is in the excellent range.
Click to expand...

That is how I was before I was married. My wife and I am not exaggeration had over 40 credit cards. We have closed most of them out but some reason if she sees a sale she can't help but open a credit card!

LOL!
 
#24
#24
ANTI-DAWG said:
My credit score did nothing but rise while enrolled. I have purchased new cars w/ great intrest rates, and am now two payments from being debt free w/ a 700 score. With there help I turned our situation around, and now also adopt the philosophy that if I don't have cash I don't buy it. That is w/ the exception of my house and vehicles....
Click to expand...

Maybe this is what my brother did. I think he went through a company called gnowles....?????

So really all your company did was lower your interest rate but you paid back every thing your had borrowed on a credit card?
 
#25
#25
OrangeEmpire said:
That is how I was before I was married. My wife and I am not exaggeration had over 40 credit cards. We have closed most of them out but some reason if she sees a sale she can't help but open a credit card!

LOL!
Click to expand...

40!?!?! Holy crap.

I've only been married a little over 2 months and am already trying to find ways to keep my wife out of stores.
 
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