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| *Loan,banking and credit>>>credit debt |
What's the difference between debt settlement and Credit Counseling? |
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. Outstanding answer Kris...I wish you could be around every time someone asks if these debt settlement companies were legit! But you didn't answer his question! LOL When you settle on a debt, the creditor will put "paid for lesser amount" or "settled" on your report. This looks just as bad as not paying it! Your credit report now reflects that you went through debt management. To a potential lender, that looks almost as bad as a bankruptcy. And as Kris says....they rarely ever deliver on their promises, and they charge a fortune. This is work you can easily do yourself. Credit counseling is just that (if they are being truthful to you). They will sit down and look at your entire financial picture. Then they will figure out how much disposable income you have and try to figure out a payment plan to get out of debt. The problem is that there are people who call themselves "credit counselors" but are actually fronts for loan companies trying to sell consolidation loans, or some other such nonsense. There are several good non-profit companies that do credit counseling. Just look around. |
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