Anyone here have experience using a Credit Counseling Program?

[chump]

I've seen tons of ads on this. They take your credit cards, close them and make your payments for you after you pay them. They claim it saves you lots of $ on interest and fees. I'm wondering if anyone here has used one of them, I'm a little leary of sending a company $ each month and have them distribute it.

Thanks for the input.

 

[yyz]

You can most likely do the same thing.

• Call the companies you owe money to
  This is the same thing the "broker" will do. Tell them your situation. They will probably forward your call to one of the people there who specializes in this area.
  
  Let's say you owe $8000 over 4 credit cards. They want thier cash, but they would rather have "something than nothing". If you are this far into the situation, you more than likely have soem huge interest and late fees. Ask them to cut off those fees, and get right down to what you actually put on the credit cards. They will counter with something, but tell them you are in no position to get out of debt with them, unless it is handled this way. (Sure, they would like the fees, but the bottom line is, they want their money first!)
  
  Right there, you will knock off some serious jack! Do this with all the creditors. You need to know what you can pay each company. Most will want a schedule that pays it quickly, but I'm sure they will work with you. The important thing is to call!!!! They will work with you!
  
  Tell them they are not the only one with their hand out. You have other obligations, too. Don't lie, or try to sell them a story....they hear that shit every day.
  
  They will set something up over the phone for you to pay by automatic withdrawl from your checking account. Again, you know what you can pay.....make sure if all you can pay is $500 a month between the places you owe, that you don't say "I can pay $600". If you bounce a check to these guys, you may get slapped with all the back interest again! (Don't screw around!)
  
  If you tell a company you can pay $125 a month, they will say, "We would really like you to pay $250." Be polite, but tell them you are doing what you can, and that is all you can muster at this time. What are they going to do? Tell you to piss up a rope?
  
  This is the same thing these companies do, (I would think) and they obviously get a cut out of what you pay them.
  
  You are not the only person these people deal with, and I know it might seem embarrassing, but you will feel much better getting this off of your chest.
  
• Don't get back into the same trap!
  
  It will take you a vary long time to get back on your feet, if you are talking some substancial ching, here, but don't fuhk it up by getting anymore cards when the offers copme along!
  
• Quit gambling!
  
  Sucks to hear, but that was probably one of the reasons you are where you are. It might sting like a bitch, but guess what? Tough shit!

That's about all I can tell you, so good luck!

[This message has been edited by yyz (edited 11-29-2001).]

 

[Nick Douglas]

I used one called Debt Management based out of Florida for my college debt. I think it helped a lot. Basically they just get a lawyer to negotiate with your debtors and then add everything up into one lump sum payment per month. I strongly recommend it if you find a reputable company.

 

[JSMOOTH]

Before I was married, I ran up about 10,000 on 3 different credit cards. Now, that's peanuts compared to some, but it was enough for me.
I enlisted the services of one of these companies...( a local one ). It's the best thing I ever did. I went from paying about 350.00 per month to 125.00 per month through the debt/credit service.

It took about 3 years.....but now....5 years later....I'm only "in debt" with my car and my house!

I recommend it.

BTW- none of those charges were a result of gambling.....Always have and always will deal with cash.

[This message has been edited by JSMOOTH (edited 11-29-2001).]

 

[SixFive]

You can do all that yourself like yyz mentions. Consolidation loans are bad because they don't fix the problem. Behavior is the problem, not finagling you interest rates to be lower. If the behavior is not corrected, the problem and debt will keep accumulating. I advocate no credit cards. If you have never read anything by Dave Ramsey, check out his book, "Financial Peace". It is a quick read, very motivational, and it can help u knock out your debt. Put your debts into the "debt snowball". Good luck, and hope u get out of debt soon. Ramsey also has a nationally syndicated talk show M-F. His website is www.daveramsey.com.

 

[Neemer]

I mostly agree with the suggestions already made. I've always had the frame of mind that if you can not pay your credit card in full every month, then you shouldn't be carrying one. To me, they are simply a convenience vehicle which allows me not to have to carry a big wad of cash around. If you do currently have a credit card then for God's sake, limit it to just one or two. If you've unfortunately maxed yours out, then for Pete's sake, don't make the same damn mistake with 3 or 4 others. Lots of folks have the type of mindset that if you have your debt spread out among lots of credit cards, then it makes things appear to be more manageable. As you know, there is no damn difference b/t having $10k on one card or $1k on 10 different credit cards.

But first things first, take a pair of scissors and cut that mutha fukka up and don't you dare get back in the same damn mess once you get your card cleared off. If you have somone that you know at your local bank, give them a call and tell them what kind of predicament you have gotten yourself into. Try and negotiate a % of money that you can borrow and use that money to pay off all your credit cards. This is a very good time to be taking such actions b/c short term interest rates are really really really low! You should be able to find a short term note for around 6-8%. It will sure beat the hell out of the 12-22% your credit card company will be charging you. This is essentially the same thing that these credit counseling programs are gonna do. If you don't have any acquaintances that work at a financial institution, then this particular program might work best for you. However, if you do have a contact, then do the steps above and save yourself some more money.

Good Luck, and it would be a very good idea to check out Dave Ramsey's book to avoid getting in this mess again.....