Credit Counselors
Just an FYI to all these good BK filers in here and any guest viewing this:
I would be very, very, very careful here.
There are credit counseling services that attempt to manage your debt by trying to get creditors to lower interest rates. They often charge monthly fees. They take one payment from you and then pay your creditors.
Then, there are Debt Settlement companies, which looks like what these folks are. They indeed tell you to stop paying your creditors. You pay them so much per month instead (usually whatever you would normally pay your creditors). After about six to twelve months of these payments they supposedly contact your creditors and propose settling your debts for substtantially less than full value. Usually, the first and sometimes the second payment that you make to the Debt Settlement firm is its nonrefundible fee for the services that it promises to render.
No creditor is legally obligated to work with either concern. But, many creditors, once they get that letter from one of these debt settlement places will just automatically refer your debt to its "legal dept" with the idea of suing you.
These places will tell you that the stigma of bankruptcy last ten years and that with the recent changes in the bankruptcy law, it is harder to get your debts discharged anyway. While there are elements of truth in both statements, there are things that you should think about. To wit:
1. Once they have collected that nonrefundible fee, how hard do you really think they are going to work for you?
2. If you have many creditors, what is the statistical likelihood that every single one of them will agree to cooperate with a Debt Settlement company? It's one thing if you owe 20 creditors $1,000 each versus you owe a single creditor $20,000. However, the likelihood that 20 creditors are all going to agree to debt settlement does not strike me as being particularly high.
3. If you only have a few creditors, such as one or two, how does the Debt Settlement company know that these particular creditors will agree to a debt settlement plan vs just taking you to court? The more you owe, the greater the likelihood that you will get sued. It seems to me that either the Debt Settlement company is going to hit a home run or its going to strike out. If they hit that home run, you likely are ahead of the game. If they strike out, you probably wind up filing bankruptcy anyway. I just think that there are lot more "strike outs" than home runs in this business.
BTW, run, don't walk, away from any firm that tells you that this one is "slam dunk". It ain't.
People who are in serious financial difficulties are often ashamed of their situation. They are sometimes vulnerable to unscrupulous individuals who encourage them to make decisions based upon emotion or who desperately want to believe that there is some magic wand out there that will makes these messes go away.
BTW, there are also outfits promising to do debt settlement that will take your money and then disappear when the time comes to approach those creditors. It is definitely a "buyer beware" business. You really do need to research any outfit that you propose to use. Don't just rely upon the salesman's pitch that the company is reputable.
Catchmeifyocan
I would be very, very, very careful here.
There are credit counseling services that attempt to manage your debt by trying to get creditors to lower interest rates. They often charge monthly fees. They take one payment from you and then pay your creditors.
Then, there are Debt Settlement companies, which looks like what these folks are. They indeed tell you to stop paying your creditors. You pay them so much per month instead (usually whatever you would normally pay your creditors). After about six to twelve months of these payments they supposedly contact your creditors and propose settling your debts for substtantially less than full value. Usually, the first and sometimes the second payment that you make to the Debt Settlement firm is its nonrefundible fee for the services that it promises to render.
No creditor is legally obligated to work with either concern. But, many creditors, once they get that letter from one of these debt settlement places will just automatically refer your debt to its "legal dept" with the idea of suing you.
These places will tell you that the stigma of bankruptcy last ten years and that with the recent changes in the bankruptcy law, it is harder to get your debts discharged anyway. While there are elements of truth in both statements, there are things that you should think about. To wit:
1. Once they have collected that nonrefundible fee, how hard do you really think they are going to work for you?
2. If you have many creditors, what is the statistical likelihood that every single one of them will agree to cooperate with a Debt Settlement company? It's one thing if you owe 20 creditors $1,000 each versus you owe a single creditor $20,000. However, the likelihood that 20 creditors are all going to agree to debt settlement does not strike me as being particularly high.
3. If you only have a few creditors, such as one or two, how does the Debt Settlement company know that these particular creditors will agree to a debt settlement plan vs just taking you to court? The more you owe, the greater the likelihood that you will get sued. It seems to me that either the Debt Settlement company is going to hit a home run or its going to strike out. If they hit that home run, you likely are ahead of the game. If they strike out, you probably wind up filing bankruptcy anyway. I just think that there are lot more "strike outs" than home runs in this business.
BTW, run, don't walk, away from any firm that tells you that this one is "slam dunk". It ain't.
People who are in serious financial difficulties are often ashamed of their situation. They are sometimes vulnerable to unscrupulous individuals who encourage them to make decisions based upon emotion or who desperately want to believe that there is some magic wand out there that will makes these messes go away.
BTW, there are also outfits promising to do debt settlement that will take your money and then disappear when the time comes to approach those creditors. It is definitely a "buyer beware" business. You really do need to research any outfit that you propose to use. Don't just rely upon the salesman's pitch that the company is reputable.
Catchmeifyocan
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