recommendations for credit counseling to avoid bankruptcy

[jgcortese]

Anyone have any suggestions for honest credit counseling company? Make too much to file chapter 7...don't want to file chapter 13. I've heard there are companies that take your money but don't pay you bills. Anythoughts on take charge america?

[disconapper]

I've read the non-profit ones are the most legit.

[frogger]

Credit counseling or debt settlement?

[Napoli1986]

Anyone have any suggestions for honest credit counseling company? Make too much to file chapter 7...don't want to file chapter 13. I've heard there are companies that take your money but don't pay you bills. Anythoughts on take charge america?

Most credit counseling agencies are honest but when they figure out how much you would have to pay them per month to pay off all accounts the amount they come up with is almost as much as what you'd pay by just making the minimum payments. The only benefit of using a credit counseling companies (debt consolidation) is that they MAY be able to reduce your interest rate!
Debt settlement is a rippoff since these companies charge as much as 15% of you debt as their standard fee. Also while these companies 'negoiate' with your creditors they advise you not to pay anything and put the money aside but late fees etc. keep adding up and in the end you owe more that what you started with. Also if a settlement is reached with a creditor and you pay a portion of your debt you will get a 1099 at the end of the year for everything waived over $600 and you have to add that to your income for tax purposes.

[kornellred]

There is no easy way out of debt. Credit counseling is mandatory before filing for bankruptcy (any Chapter) - so everyone who has filed for bankruptcy since 2005 is familiar with what happens. Based upon a thorough examination of your debts, income, and expenses, the counseling service will propose a payment plan which will free you of indebtedness within a certain number of years. In essence, it is similar to a Chapter 13 payment plan, except you do not get the US Bankruptcy court involved and the counseling service acts as the trustee of your estate. Most credit counseling services receive compensation from major banks when they persuade a debtor to accept their payment plan.
In my own case, CCCS (Consumer Credit Counseling Services) proposed a $1400 per month payment for 5 years in order to wipe out about $80,000 of unsecured debt. I am three years into my Chapter 13 60 month payment plan and paying $311 per month. That should tell you something - namely, that all the credit counseling services do is get the interest on unsecured debts frozen. Any lapse in payments and it's off to the races. It could actually be a decent deal for high income individuals who need to keep control of their own finances, but generally, bankruptcy is superior in most every respect.

[jgcortese]

Thanks everyone!

[IamOld]

Right Kornellred - and all it takes is ONE - ONE creditor not to agree and ultimately sue (which is what pushed us here) and you're done...