Need some help from my bk friends

[helpless]

I have a friend that does not want to claim bankruptcy for reasons I understand, but they do want to find a reputable credit counseling service. Has anyone had a good experience with any out there??? Thanks.

[magyar123]

Want to find a "REPUTABLE" credit couseling service??? Get NASA to fly him'/her on a mission to Mars or Venus.

[Granny]

I have a friend that does not want to claim bankruptcy for reasons I understand, but they do want to find a reputable credit counseling service. Has anyone had a good experience with any out there??? Thanks.

I don't personally have any experience with one, but from what I've read, there aren't many. Being a non-profit agency does not guarantee you will get a reputable firm. The one most recommended in my area is CCCS, but I'm not sure even they don't sometimes have the interest of the creditor most at heart.

[lrprn]

I have a friend that does not want to claim bankruptcy for reasons I understand, but they do want to find a reputable credit counseling service. Has anyone had a good experience with any out there??? Thanks.

Is your friend considering credit counseling/debt management or debt settlement/negotiation? These programs are not the same.

Credit counseling/debt management works only with your credit cards trying to get them to reduce APRs and rescind late fees. Once the agency is done talking with your creditors, you send one check to the agency who then disburses the agreed-on payment to the creditors who agree to participate in the plan.

Of our twelve credit cards, only seven agreed to participate and even these made few concessions. The remaining five refused to participate and continued charging us >30% interest and late fees if we didn't make full payments on time. And the credit counseling did nothing for our non-credit-card, non-secured loans.

Debt settlement/negotiation agencies negotiate with your creditors to get principal balances owed reduced. Again, there's no guarantee that all creditors will participate - it's voluntary. And any reductions the debt settlement agency does negotiate, you pay income taxes on the difference between the original balance and the new negotiated balance,

Lastly, the credit hit you take using these programs are almost as bad as if you filed bankruptcy.

Have your friend read the following webpages that cross-compare credit counseling and debt settlement with bankruptcy:

http://www.chs-law.com/2007/08/credit-counseling-versus-bankruptcy.html

http://www.bankrate.com/brm/news/debt/20030919a1.asp

http://www.thinkglink.com/Non-profit...gencies%20.htm (ignore the embedded commercial links)

Frankly studies show that by the time a debtor is looking at debt management, it's usually too late for a half-fix. The majority of those who try credit counseling and debt negotiation have it fail and end up in bankruptcy anyway.

After two years, even though a bankruptcy is on your credit report, most filers with good credit records after filing are getting loans and credit cards at the same levels and terms as those who haven't filed bankrutpcy with the same credit scores. Tell your friend not to be scared off bankruptcy by the "life will be over and you'll lose everything if you file" stories out there being pushed by creditors....they just aren't true.

My apologies for the length here....thanks to those still reading . I just hate for people to think that their financial problems are going to be solved by these agencies when the majority of people who use them find themselves in worse shape than when they started and end up filing bk anyway. If your friend can't let go of her mis-information about filing bk, she is going to find out the same thing the hard way just like we did. Hope she's smarter than we were.