new guy

[dagger53]

hi all , im concidering finance company, such as elite financial services, for debt reduction, instead of chapter 13, as im still employed bt jutt need relief from several credit cards. any advice is greatly appreciated.

[tobee43]

personally i haven't heard much positive to these credit counseling agencies. you may be better off with a 13 as at least you would get your payments lowered and adjusted.

that being said, if i were you, i would go and take advantage of some FREE atty consults about your situation and see what they suggest. after all, it's FREE and it can help give you a better picture on the pros and cons.

best of luck to you and welcome to the board!!!

[dagger53]

thankyou

personally i haven't heard much positive to these credit counseling agencies. you may be better off with a 13 as at least you would get your payments lowered and adjusted.

that being said, if i were you, i would go and take advantage of some FREE atty consults about your situation and see what they suggest. after all, it's FREE and it can help give you a better picture on the pros and cons.

best of luck to you and welcome to the board!!!

thanks, iv had a ccconsultation at a near by law firm. private local guy low key not fancy or arrogant very trust worthy. he said same thing as you . he did say there are some good agencies, but that he is now representing client that have been scamed by crookrd agencies

[catleg]

you are in a stronger position than most people since Pennsylvania doesn't allow wage garnishment.

[tobee43]

yes, like cat says, you are in a better position than most being in PA...also, if you already spoke with an atty, then i guess you just have to weigh out your options and see or think about was is truly best for you and yours.

again, best of luck and keep posting with your questions, there are many people here going through, or have gone through what you doing now, and this place is a great resource as well as support for you!

[buffetbuster]

I agree....I haven't heard anything good about credit counseling. They tend to make things worse for you.

[shark66]

If you research this site, you'll find many people who went with "debt reduction" programs/agencies/leeches and ended up filing anyway, with a significant loss of funds and time involved.

Unless there's an absolutely insurmountable issue that prevents you from filing, just take your time and do it right. In the meantime stop paying anything to the unsecured creditors.

My $0.02 only...

Good luck to us all.

[markinva]

Going through debt reduction companies (many of whom are funded or paid by banks, btw!) does not provide you with any legal protection against judgements, garnishment, or seizure of your property. In addition, and if I understand my lawyer correctly, being in Chap 13 plan will prevent the banks from charging excessive interest rates and fees. I first tried to go through debt reduction companies, the average interest rate charges while I would be in the proposed plan was over 10% - not good!

[karm43]

They want to make money too. Unlike debt reduction, which tries to get a deal on your debt, you end up paying more anyway by the time they take their percent and you get taxed, you payed the full price, and they act like they did something for you. Counseling charges too. I looked into both. At least with the 13 everything stops harrassment, interest, taxes and judgements. All 3 ruin your credit anyway. The 13 you are protected. Just my thought. It also depends on how much debt, if it is little you may be able to swing it.

[karm43]

I also wanted to mention, alot of attorneys are doing debt reduction programs now. I called one and they weretrying to push me into it at 15 percent for them, after all they would be settling my debt for 70 percent. after I figured it out my payment would have been in high 1600. Really thats crazy. Told them I wasn't interested, after all 13 go by income and I am looking at alot LESS!

[dagger53]

thanks all this has been fabulos info, i so much appreciate the facts, opinions and logic.... very smart and informative..

[catleg]

The key thing to remember is that any debt reduction outside of bankruptcy will potentially cause you to pay taxes on the forgiven debt.
Bankruptcy frees you from any income tax liability.
It is a true "fresh start".
Debt reduction places will never talk about this.