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| *Loan,banking and credit>>>credit counseling |
I am using consumer credit counseling to do a credit settlement for 10k in credit cards. Is it a scam? |
I am using consumer credit counseling to do a credit settlement for 10k in credit cards. Is it a scam? most are scams. If not all. they charge for something you can do yourself. If you use one to settle a debt you will be treated as if you filled bankruptcy if you try to get a home loan. 10k isnt much. The average household income is 45k a yr. Just knuckle down and pay it on your own. 2nd job if you need to. go to daveramsey.com and listen to his talk radio show. lots of good advice on money and debt. and cut up those credit cards Depends on what you consider a "scam". They can certainly help guide you in settling with your creditors. They can even help lower the APR or cut it in half. I wouldn't expect to cut the debt in half or anything like that though. Credit counseling companies are Bonded. They are usually very safe. Once you joined, you should get the statements periodically. If there is any problems, your creditors would probably keep contacting you for the money. Credit counseling companies can help you to pay off your debt in 5 years interest free (or reduced). You have to pay them a small monthly fee because they have to pay their overheads too. Did you check with the BetterBusinessBureau? bbb.org It is a better option than declaring bankruptcy. Not sure what agency you are using, but the one that I used got my interest rates lowered considerably and allowed me to make affordable monthly payments. Your credit score and report may suffer for approx the next 7 or 8 years and the credit card companies you are working with currently may give you a bit of trouble getting another card anytime soon, but at least it will show that you are working with your creditors and will not show current late or non-payments. After 7 years those credit cards will no longer appear on your report and you will not have a past bankruptcy hanging over your head. What type of company are you using? Do they specialize in debt SETTLEMENT or debt CONSOLIDATION? There is a big difference in how they operate, which can greatly impact your financial situation. Debt Consolidation basically takes the money you send them each month and distributes a small payment to each creditor - on a monthly basis - until your debt is paid off. They negotiate with your credits upfront for a lower amount, which is how they can receive a lower amount. But beware....you'll be paying them a fee to handle this for you, so make sure it's not actually ending up to cost you more to have this company handle your accounts. Debt Settlement is a different beast altogether. You pay them a monthly fee to handle your accounts. They ask you to begin setting aside each month, a certain amount of money. Some companies ask that you send this amount to them, others ask that you set up a separate bank account for this money....so it is kept separate from your other money. They say they are continually working with your creditors to come to an agreed lump sum amount that you will pay to settle the debt. Once they get the creditor to agree to an amount, you will use the money you should be saving to pay them off. Understand that your creditors will NOT receive a monthly payment with this program....they will at some point months into the program, receive a lump sum. I have learned that in Debt Settlement, they interact very little with your creditors for several months into the program, knowing that as time goes by, most creditors will be willing to settle for a lower amount as opposed to receiving nothing. I continued to receive nasty letters from my creditors, and much to my dismay, few on them were willing to negotiate thru this company. I was hoping for the peace of mind in knowing I was getting my finances back on track, and I certainly didn't get that result with this company. Research the company you choose or have chosen because many of them have been exposed as scam artists - yet I must note - there are many reputable companies who can help you put your debt behind you. READ THE FINE PRINT. I can't stress this enough. Make sure you know all of the fees you'll be expected to pay....how much they charge you each month to settle your debts, and how much is actually going to the creditors. I've included a great website that has lots of info on the credit/debt process. Interesting stuff. Best of luck to you. http://www.creditinfocenter.com/debt/set... |
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