Peddling Relief, Firms Put Debtors in Deeper Hole

[keepinitreal]

The ArrangementThe PitchThe Coming Crackdown

http://www.nytimes.com/2010/06/19/business/economy/19debt.html?hp=&pagewanted=all

[justbroke]

Wow... I'd rather get a loan from a PayDay loan company.

[copper2]

Listen to yourself first

I made a decision to file BK in 2005, as I had five days before BK Law changed, and one year after my industry began outsourcing to India. I had looked at all the programs, talked to an attorney, but beyond what I heard I was stuck on two things: Law changing, Industries outsourcing.

Five years later, who could have imagined mortgage meltdown, bank failures, bailouts, recession and entire countries on the brink of financial collapse. Banks are not lending.

If you think things are going to "get better" and you can save yourself from the credit nuke, it will help to remove any emotion. Think like a company would think, in your situation.

Whatever nightmare you're dealing with, my vote is that you get yourself free and avoid parasites. I had to return to waitressing, use pre-paid Visa's, and turned the tables on new Credit. I take sporadic cash-advances, not to exceed 30%, and put the cash in an interest-bearing savings account. I pay some interest to pay myself this way, but at any moment I have the resources to pay off a balance immediately.

Good luck, through this horrible experience.

[newbegin]

We have seen people lose everything, by listening to and putting their trust in people like this. Good hearted,well meaning people really have no ideal how low these people will go, until it is too late.

[Flamingo]

The key to all this is the "rush" to get you to sign the paperwork and not read what you are signing. They work on your emotions and the despiration of being in deep debt and working as your saviour. We investigated a place prior to filing (thankfully never signed) who, since we had a lot of equity in our home but could not get it with a job loss, worked up a refinancing that sounded marvelous over the phone. They overnighted a package for us to sign and we had to sign it and get it out the next day or the offer was void due to "deadlines." I actually read the paperwork and when I saw what was on there and the $9,000 extra in charges over and above what they mentioned over the phone, I showed my husband when he got home and we ripped up the papers. When they called the next day to remind us to overnight the signed papers back due to the "deadline," we told them we had changed our minds after reading the documents and we were going to talk to an attorney. We never heard from them again. We filed Chapter 13 two months later. Otherwise with that garbage that came in the mail, we would have lost our house.

[frogger]

Debt settlement companies are nothing more than a scam to prey on desperate people. While there are many independent companies, many of them are owned by the credit card companies.

They are looking to get you every way they can.

Don't do it!

[MarkM]

Given the basis of this site, I suspect it is futile ... but I'll ask anyway. Has anyone had a good experience with one of these companies?

Unfortunately, I've never heard of a shop which anyone with BK experience regards as a good idea. I suspect the coming crackdown is very warranted -- if it occurs. (I've heard promises of a crackdown before too.)

[ForumReader]

Given the basis of this site, I suspect it is futile ... but I'll ask anyway. Has anyone had a good experience with one of these companies?

Unfortunately, I've never heard of a shop which anyone with BK experience regards as a good idea. I suspect the coming crackdown is very warranted -- if it occurs. (I've heard promises of a crackdown before too.)

I am interested in knowing if anybody else has had true success with a dsc (debt settlement company). I think maybe just a few handful has had success, but probably not the majority who signed up with dscs. I sure as heck did not have positive experience with the dsc. I have made some posts in the past about being sucked up by a dsc based in TX and have paid over $4000.00 in fees to this dsc before receiving summons from one of my creditors (BoA). I then had to file for bk immediately. I remember receiving documents in the mail and it repeatedly said no refunds were to be made whatsoever before turning the documents in and ever since regretted doing so. When the rep called to ask where was my monthly fee? I told her I was filing for BK and that I was not going to pay any more fees, she hung up.

It will really be helpful if the FTC can look into this ds industry further and get that all reformed, revamped, anything to stop them taking advantage of customers struggling with debt. at these DSCs.

To the OP, thanks for posting this article.

[frogger]

Given the basis of this site, I suspect it is futile ... but I'll ask anyway. Has anyone had a good experience with one of these companies?

It's not the basis of this site from which I give my opinion on these companies.

I see how they work, I see what they do to people.

Bastards. The entire lot of them.

Debt settlement should be the last resort, not BK.

[beachchick]

I read a really good book, Bankruptcy, How To Survive and Prosper that talks about this very same thing, debt settlement,nanagement and consolidation, and the authors experiences with them, debt ridden people are so susceptible to these "scams", people who do sign up usually quit and file bk and wish they had done that in first place. Don't fall for their lines, they are not there to help you, they are there to fleece you.

[Flamingo]

I read a really good book, Bankruptcy, How To Survive and Prosper that talks about this very same thing, debt settlement,nanagement and consolidation, and the authors experiences with them, debt ridden people are so susceptible to these "scams", people who do sign up usually quit and file bk and wish they had done that in first place. Don't fall for their lines, they are not there to help you, they are there to fleece you.

That is correct - they work first on your emotions and provide quick deadlines to get you to sign before you have the time to fully investigate what you are going to sign. All major financial documents, including mortgage paperwork, should be reviewed by an attorney before signing. The $50/$75 fee for the attorney's review is well worth not getting sucked out of several thousand dollars. Some people are so desperate for relief they will sign anything.

[helpmeout]

Given the basis of this site, I suspect it is futile ... but I'll ask anyway. Has anyone had a good experience with one of these companies?

Unfortunately, I've never heard of a shop which anyone with BK experience regards as a good idea. I suspect the coming crackdown is very warranted -- if it occurs. (I've heard promises of a crackdown before too.)

Before I made the decision to file bankruptcy, I contacted debt settlement agencies. One turned me down and stated that my income wouldn't support the payment. The rest of them would have gladly taken my money even though I was showing almost a negative $1K after the payment to them. I suspect that the first one is the only one that might have done any good. At least they were honest and didn't try to fleece me.

[Dougie011]

I wish I could say I didn't fall for the debt settlement scheme, but I did. I was with them for 6 months and paid over $4000. I was getting sued and then after all I had paid, the lawyer they had called me and asked if I considered bankruptcy. I told her that that I dropped out of the program and talked to a bankruptcy attorney and was going to file chapter 7. I wish I would have filed 6 months ago. I hope to get some of the money back from the dsc but I am not holding my breath.
I filed bankruptcy on June 25 2010, and have not gotten the letter for my 341 meeting yet.

I know everyone says the 341 meeting is pretty simple, but I am very nervous about the whole thing.