Debt Consolidation???

[TooBrokeToJoke]

I am really not considering this, but was wondering what it really is, and is it just a scam? Can they really lower all your payments, how do they make their money? My cousin wants me to do it, but it doesn't sit well with me... I just can't see something like that working for me... We've always had horrible luck and been scammed too many times to count. Any input, has anyone ever used them with success?

[Dirk Squarejaw]

A friend of mine has been using one for the last few years and has gotten pretty much nowhere with it. Just like everyone I've read about, now that he has paid them for a few years, he is almost ready to finally swallow his pride and file bankruptcy. Creditors constantly call all day long. He pays out extra money to the credit counselors and overall it sounds like a big ripoff to me.

[TooBrokeToJoke]

thanks for ur reply, yeah, thats what i think of them too. again, thanks!

[Flamingo]

I am really not considering this, but was wondering what it really is, and is it just a scam? Can they really lower all your payments, how do they make their money? My cousin wants me to do it, but it doesn't sit well with me... I just can't see something like that working for me... We've always had horrible luck and been scammed too many times to count. Any input, has anyone ever used them with success?

How these companies work is that they get the percentages lowered on your credit cards but they have fees they add for their services (what business do you know of that would do anything for you for free?). It appears on your credit reports and many people who sign up eventually file bankruptcy. Some of the places are legit and some are scams. Anyone who considers debt consolidation should always check with the Better Business Bureau as to the company before signing any papers.

[FreshLikeADaisy]

I should add to Flamingo's post that, in order to negotiate the percentages down, it is common for them to withhold payments for several months: in theory, this is supposed to make the creditor grateful to offer you a reduced interest rate and/or settlement plan, but in reality it trashes your credit even further. There is also no guarantee that your particular creditor(s) will work with them at all.

And if that weren't enough, it's not uncommon to find that payments were withheld forever; i.e. the debt management company took your cash and ran. Above and beyond the fact that your payments never got made and you're worse off than you were when you started, if this happens you can count on your credit being COMPLETELY trashed, far worse than bk would trash it.

Your gut instinct was right. Bankruptcy will give you a much safer shot at a new beginning than debt management will. And from your other posts, it doesn't sound like you have the cash to make *any* payments right now, so even if you could get an "honest" debt management offer (laugh) it's probably not an option for you right now anyway. Good luck to you!!!

[CATCHMEIFYOUCAN]

SCAM !

I went through the whole process and ended up filing BK. I lost my initial fee of $550 to them! Had I stayed in it would of stood to lose $3000 ! The only good I got out of it was prepping for BK. They even told me that my BK would fail ! When you file for BK you have to take a credit counseling service (similiar to a non legit debt mgmt program) but the ccs is approved by the courts. They figure your debt to income ratio (if they find you are unable to finance a payment plan they recommend BK: this is your ticket into the BK process!) You will be issued a certificate that you took the class and go from there!

Catchmeifyoucan