Debt consolidation companies - yes/no?

[jb4lcm]

I have tried searching around for posts about debt consolidation companies but not finding them? Thot they would run wild here.

What is the over all opinion of debt consolidation companies? I think they are a ripoff but my wife thinks we should look into them. What's the overall opinion?

I have a 13K situation with AMX who has sent it off to an attorney ... they are saying 9K to even think about settling. Anyone have experience with AMX like this?

Thanks!

[LadyInTheRed]

Discussions of debt consolidation companies do come up here and the overall opinion seems to be the same as yours: They are rip offs. Many have come to BKforum and said that they tried debt consolidation, but had to file BK anyway and wish they had just filed BK in the first place instead of thinking it was the worst thing in the world to do. Some are surprised at how much in fees went to the company instead of the creditors. Not all creditors will agree to participate. Some who finish a plan and think all of their debt is taken care of, are surprised later when creditors come after them for unpaid portions of the debt because the creditor didn't actually agree to reduce the debt, but accepted payments and then sued when the payments stopped. It is also probably just as bad for your credit as bankruptcy.

[bcohen]

There have been many posts here about "debt consolidation" companies, as well as about "credit repair" companies, and the consensus is that both of these types of services are worthless at best, and a scam at worst.

While "debt consolidation" companies can sometimes negotiate a better settlement than you could on your own, most people find that the cost of using such a company negates any savings, and furthermore the settlements that are offered are unaffordable, hence why the person is having difficulty paying their debts in the first place.

"Credit repair" companies are completely worthless as they cannot do anything which you could not do yourself for free.