Has anyone tried CCCS and Debt Management Plans?

[hooloovoo]

I've decided for the time being to hang in a while longer and see if I can pull out. Really I have nothing much to lose and while BK would be easier and lower my stress, I really don't want the ramifications of it. I know I can rebuild my credit but I'm more worried about things like renting an apartment, or loans that ask if you've ever filed for BK even after it's off your credit report. Also since I'd likely be on a Chapter 13 plan (granted, a much more affordable plan than what I pay now) I'm going to have to attempt to pay it back.

One step I'm considering is contacting the Consumer Credit Counseling Service. Has anyone tried that and did you have any results from it? I figure it doesn't hurt to try but my concern now is that given the economy they're not likely to be able to do much. I know they are fronts for the credit card industry but hell, if they could get my rates down I'd take what I can get. I have several cards at 28% and they refuse to lower them, and I suspect they won't until I'm seriously delinquint. Yes, I've also contemplated getting intentionally behind so that I can negotiate. I figure right now, I pay the minimums on a large balance at 28%, I'm their perfect customer... There's no way they'll lower my rates if they don't have anything to lose and until I demonstrate they are about to lose they'll keep milking me. Anyone think CCCS might actually be able to get me decent rates?

In the meantime I'm trying to pick up some extra freelance work and really trying to get rid of my car. Unfortunately I'm in a lease but I've put it up on a lease transfer site with a $2,000 cash incentive, which I will beg/borrow/do whatever it takes to raise. If I could get that out of the picture and buy a cheap used car I can get out from under my debt in about 4 years without the black marks on my credit. If I can't, well, I'm in trouble... It's also tempting to just let them have it and hopefully work out a payment plan for any deficiencies on the lease. Although that will destroy my credit, well, it seems that defaulting on one debt will do less damage than defaulting on all debts...

[Flamingo]

You need to realize that your credit is bad right now with what you are describing and if you do go with a debt management plan, your credit will also take another bad hit and also if you negotiate on your debt as you mention you considered. Do a search on this forum as to debt management plans or CCCS - you will find most people advise against going that route because most people that do end up having to file anyway. You need to figure out exactly how you stand financially and also if you are even able to qualify for filing BK. The best way to find this out is either post all your debt and asset information on here for some posters to help you (also state in which you live) or get a free consultation with a BK attorney who can review your situation and advise you exactly where you stand and if you would a candidate for BK or a debt management program.

Best of luck to you.

[LuciluS]

I sent all my information to CCC last August and had a conference call with them. The guy told me he couldn't help us and we needed to see an Attorney and file Bankrupty.

As we just moved to this area in 12/07, I had no clue what Attorney to call. I finally 'wiggled out of him' the first 3 letters of an Attorney he recommended.

We met with the Attorney end of Sept. 08 and he told us to quit paying our credit cards immediately except for one I had a large balance transfer on in August. He told me to make 3 payments and send in $50 more than the minimum on that card.

We will not be able to file until Sept. 2009 as I received monthly checks from ex-husband's 401k plan. The last check was in Feb. 2009 due to the stock market falling. It was supposed to be a 10 yr. payout, but it only lasted 6 years. May have some problems with some of the earlier payments with the IRS; however, I was awarded SSD in 7/06 back to 11/14/04, so think I won't owe the IRS much, IF they ever catch it LOL!

We will be under the AR median income as my husband is a Truck Driver and only makes .31 a mile. Plus, he had 5 bypass surgery in 2/07 & a pacemaker in 6/07 and has to take off quite a bit for that.

Also I found out in February of this year, I have skin cancer. Scheduled Monday for the Mohls Surgery with a Dermatologist and then will have reconstructive surgery that afternoon with a Plastic Surgeon.

The phone call have started again, due to non-payment since 8/08. I answer some of the phone calls and just inform them I have skin cancer and need to make sure I'm completely cured before we file.

Attorney has been paid in full. Now I just have to get my taxes done. I haven't even gotten to the itemized deductions Yet and TurboTax already shows a refund of $2,222. We will spend it on getting new tires for both of our cars and some home maintenance (wood fencing needs to be fixed & 2 leaky faucets).

Luci

PS They didn't charge me anything either

[hooloovoo]

You need to realize that your credit is bad right now with what you are describing and if you do go with a debt management plan, your credit will also take another bad hit and also if you negotiate on your debt as you mention you considered. Do a search on this forum as to debt management plans or CCCS - you will find most people advise against going that route because most people that do end up having to file anyway. You need to figure out exactly how you stand financially and also if you are even able to qualify for filing BK. The best way to find this out is either post all your debt and asset information on here for some posters to help you (also state in which you live) or get a free consultation with a BK attorney who can review your situation and advise you exactly where you stand and if you would a candidate for BK or a debt management program.

Best of luck to you.

Yes, I've spoken to two attorney's. I'd almost certainly be on a chapter 13 plan, unless the trustee bought several exceptions (i.e. although I only have a family size of 2 since I claim 1 dependent, I have 3 kids 50% of the time and really that's a household size of 2.5). My chapter 13 plan would be about $300 a month compared to minimums of nearly $1k right now.

My credit right now is not bad. Actually my score was lower than expected but I checked my credit report and saw several bogus lates, so I've disputed those. My reason for not filing BK is not so much to keep great credit thought, but to avoid the lifelong discrimination of BK. Regardless of what my credit score is, or whether the BK is off my credit report or not, if I file the rest of my life I have to check that little box on every loan and rental application. That's my big concern, while it may be off my credit report in 7-10 years, that mark will still follow me around the rest of my life. If I can avoid that, it's worth it in my opinion. But realistically I've got about 2 months to avoid that unless I start generating more cash and/or get rid of my car...

[Flowers]

I went to cccs as a part of the bk filing. It is mandatory in this state.

[BrokeinCA]

I talked to two reputable non-profit Credit Counseling Services before ever considering bk. Both agencies stated that they would have been able to get lower interest rates on most of my cards based on what they had been able to negotiate for other clients; however, the minimum payments required by the credit card companies would have been higher than what I am currently paying. This was not an option for us as we were struggling as it is. It can't hurt to contact them. Just make sure to do the research and make sure you are dealing with a reputable company.

[Silver26]

Me and my wife went the CCCS route before deciding to file bk. We were in the plan for 4 months. Initially it was very good, but many creditors did not accept our plan or they wanted higher payments sometimes double what we were paying. We tried to make it work and it just wasn't making sense.

The only way it works out in my opinion is if you have a reasonably high income and if all your creditors accept the plans they give them and your debt is low but high interest.

[Flamingo]

Yes, I've spoken to two attorney's. I'd almost certainly be on a chapter 13 plan, unless the trustee bought several exceptions (i.e. although I only have a family size of 2 since I claim 1 dependent, I have 3 kids 50% of the time and really that's a household size of 2.5). My chapter 13 plan would be about $300 a month compared to minimums of nearly $1k right now.

My credit right now is not bad. Actually my score was lower than expected but I checked my credit report and saw several bogus lates, so I've disputed those. My reason for not filing BK is not so much to keep great credit thought, but to avoid the lifelong discrimination of BK. Regardless of what my credit score is, or whether the BK is off my credit report or not, if I file the rest of my life I have to check that little box on every loan and rental application. That's my big concern, while it may be off my credit report in 7-10 years, that mark will still follow me around the rest of my life. If I can avoid that, it's worth it in my opinion. But realistically I've got about 2 months to avoid that unless I start generating more cash and/or get rid of my car...

You are correct as to what I bolded in your posting above; however, the stigma of bankruptcy is not what it used to be and in many situations, one has to worry about the present moreso than the future. The "little BK box" also used to be on my mind quite a bit but I have not yet encountered it on applications of any sort but if you are higher in management and have to be on various Boards or be a director or officer of any company/corporation, there are documents that one must sign and have notarized periodically and there is always a checkoff box/statement asking "Have you ever been judged a bankrupt?" But I would not live my life in fear of that little box. I would worry about what is going on right now and handle something like that later if it ever pops up. The odds are low for the average, middle-class person.

We too did not want to file and tried despirately to avoid it just making things worse for us along the way but if you feel you have a way out and can make it work, by all means do it. Just know that any debt management program is going to put a bad hit on your credit reports that will stay there for 7 years and also if you negotiate your debts for debt settlement/forgiveness. You would be responsible for taxes on any forgiven amount if you go that route.

[EricaCallaha]

The problem with CCCS and debt management is that your creditors do not have to work with them. In fact, a lot of them up the payments when they find out that you are in CCCS or debt management.

Really the stigma of bankruptcy isn't what it used to be. If you are considering these options then your credit really isn't as good as you think. Besides, bankruptcy falls off your credit report in 7-10 years. After that..that little box does not apply. And the further away you are from bankruptcy, the better your credit becomes. With debt management and CCCS you have to wait until your balances actually start to go down significantly before your score improves. Plus CCCS and debt management show on your credit report...almost as bad as bankruptcy.

Good luck. Sounds like a tough spot you are in....just on the fence.

[hooloovoo]

Well really the big thing I worry about is renting. I like to rent private single family homes, since I have kids and dogs. These places are usually rented out by a person who has a few investment properties and not a big company. They don't have policies about tenents, they just mostly go with a gut feeling on whether they trust someone or not. And if I have that BK on my report, well, I'm not a safe bet to them. I know several landlords who won't rent to someone who has filed, regardless of income/budget/credit score.

Basically right now I've got a few months time. The big big thing is if I can unload my car. My car payment right now is $540 a month, if I can get rid of it and get a beater to drive for a while I can pull out of this. I've got enough cash on hand to last me 2 months. So I'm looking at it as that I have 2 months to get rid of the car, or file BK. In the grand scheme of things, losing my nice car and driving a junker is MUCH preferable to filing for BK. It's just a question of whether I can do it or not... So far I have one guy who I've talked to an is interested, waiting to hear back from him. Since it's a lease I'd take a bath trying to sell it (realistically, more cash than I can come up with), so I put it up on swapalease with $2,000 cash to take it over. If someone takes me up on it, I'll sell some stuff and borrow some cash to cover the $2k. Then, buy a car for maybe $5k on a two year loan. That gives me about $700 a month in disposable income which is enough to live on, and make a dent on my debt if I'm frugal (per my budget, I can get by pretty well on $500 a month for food, gas and entertainment).

So basically right now I'm just crossing my fingers hoping I can unload my car. If not, I've spoken to the lawyers and know where I stand. When I'm out of money, I'll stop paying credit cards and give the lawyer their retainer.

In the meantime I've set very strict budgets to make my money last as long as possible. I'm actively seeking freelance work. And I've made a solemn vow that I will not use a credit card again no matter what. If I don't have enough cash to live on, then instead of charging stuff I just don't pay a CC bill. No more getting in deeper... If I get to the point where I have to file I'll probably call up the lease company first and see if they'd be willing to do a voluntary repo, and work out a payment plan for deficiencies in exchange for keeping it off my credit report. I seriously doubt they would, but it'd be worth a last ditch effort before filing.

[dogbone33]

We went and they told us they couldn't help to contact an attorney to file bk. So here we are!

[Flamingo]

Really the stigma of bankruptcy isn't what it used to be. If you are considering these options then your credit really isn't as good as you think. [B]Besides, bankruptcy falls off your credit report in 7-10 years. After that..that little box does not apply.[/B] And the further away you are from bankruptcy, the better your credit becomes. With debt management and CCCS you have to wait until your balances actually start to go down significantly before your score improves. Plus CCCS and debt management show on your credit report...almost as bad as bankruptcy.

Unfortunately, there are some BK questions on documents which ask "Have You EVER filed bankruptcy" or "Have you ever been judged a bankrupt?" Or similar verbiage. One needs to answer yes even if it is beyond the 10 year limit for Chapter 7 or 7 year limit for Chapter 13.

[EricaCallaha]

To Flamingo: I realize that...but only in rare situations. Like high level management or working at certain levels of government. Usually those questions are followed by when or how long since your discharge.

To OP: We also rent single family homes. We have never had a problem. We have always been upfront about our situation. Our silver lining is that we have perfect rent credit and excellent references. Both of those go a long way. We are renting right now and signed the lease 1 month after filing, were upfront about the bk and we had no problem.

So yes, it is a stigma, but only to the point that you let it be.

Good luck.

[Flamingo]

To Flamingo: I realize that...but only in rare situations. Like high level management or working at certain levels of government. Usually those questions are followed by when or how long since your discharge.

It all depends. I just notarized two documents this week (one business related and one for a co-worker on a personal level) in which one question just stated "Have you ever been judged a bankrupt?" Nothing after that, just a box with "Yes" or "No." Next question related to any arrests or felonies. On the co-worker's document was the question, "Have you ever filed bankruptcy?" Again, nothing there after, just yes or no. The document was for her to rent an apartment in TN as she was transferring to another office and required by the apartment complex. So I can understand the OP's concern with that little BK box and just realize it can pop up and one will just have to answer correctly when it does. You just can't base your life worrying about it because what matters most is now and not what may or may not happen in the future as to signing documents or applications.

[hooloovoo]

Well, good to know some people don't have too many problems with apartments and such. I guess my big concern is that it's an unknown, you never know when it may pop up and cause a problem even after it's off your report.

I'm still hoping to avoid it but we'll see. I have an appointment with a CPA next week to figure out how to divide some decudtions with the ex, that's a big factor in what I do. If I end up owing taxes I may be pretty screwed. If I can't unload my car pretty soon or bonuses don't start up, I'm definitely screwed.

On the means test my monthly payment would be $265. This is compared to the $1,000 a month I'm paying in minimums currently. I guess that demonstrates how well over my head I am. The $1100 a month child support just eats up all my income. If I could argue an extra $150 a month for housing and an extra $35 (max) a month for food/clothing I pass the means test. Don't know how likely that is. My means test is based on a household size of 2 (one dependent) but that neglects the fact that I have custody of 3 kids 50% of the time, which increases my expenses to about 2.5...

Still, $265 a month would be a huge relief. I'd actually be able to have a budget! I keep finding myself extremely tempted to file just to get rid of the stress. But again, the potential for it to pop up and cause problems in the future makes me want to fight it out...