OT - CC Debt help/relief/consolidation?

seanm0520 · Jan 20, 2010

I want to start off by apologizing if this is the wrong forum for this. I didn't want to straight post it in the RR. I doubt I'd get even one serious answer. But if this needs to be moved, I'm sorry!

Anyway,

Simple question: does anyone know if any of these companies are legit or actually do what they promise? Has anyone here ever had to turn to one?

I have 3 CC right now and about $3300 in debt. I know compared to average Americans, that's a very tiny sum. However, being a college student, what I make at my job barely covers rent, my phone, and groceries. At the end of the summer, I lost my old job and couldn't acquire a student loan for the Fall semester so I wound up falling behind. I'm a few months behind on 2 of the 3 so they're looking for some pretty large sums (large for only being able to work 3-4 short shifts a week because of class).

So I'm wondering, if I contact one of these companies (and they're legit), can they consolidate everything (even though I AM behind) and shrink my monthly payment to $100 or less? That I can definitely handle but it's hard to keep track of 3 CC bills at 3 different companies at 3 different amounts at 3 different times of the month.

Is this just wishful thinking or am I going to have to default? Without some kind of aid I know I'll never be able to catch up.

Any help is greatly appreciated.

I'm sure at least one of these has gone to collection as I just got out of class and I have 4 missed calls.

GoBlue34 · Jan 20, 2010

Before I would consider doing anything like this, ask your family for help. $3300 isn't that much money and MUCH MUCH better than allowing it to be turned into collections and worse getting the debt settled for less (that's about as close to bankruptcy as you can get).

All that aside, WTF are you doing on a gambling forum when you can't pay your bills?

ProPokerPlayer · Jan 20, 2010

I dont know a thing about it but Dave Ramsey a supposed Guru on these things always says they are horrible and dont ever do it. Maybe ck his site on more info but i believe his premise is these companies dont do anything you cant do yourself....

"All that aside, WTF are you doing on a gambling forum when you can't pay your bills? "

I know he's not alone in that club....lol

seanm0520 · Jan 20, 2010

I spend a lot of time on here. Great discussions. My family definitely cannot help.

seanm0520 · Jan 20, 2010

If we could not have the thread degrade into slamming me for being on here that'd be nice, haha. I understand it and it is 100% true but if 80 people say it, it adds nothing.

kidman232 · Jan 20, 2010

take the $100 you would pay and put it on a 5 team parlay and your almost home free....

aside from that, maybe check into a bank loan

FairWarning · Jan 20, 2010

Call the credit card companies and try to negotiate with them. Maybe they will waive the late fees as long as you don't use the card. They have an interest also to make sure they get money. Better than taking a him on your credit record at a young age.

myboymagic · Jan 20, 2010

whatever you do, do not let your credit score take a beating. much easier to keep a score up, than trying to bring it back up later on. I speak from experience, your credit score will haunt you the rest of your life if you let it get too low. I know some of you will come on here and tell how you raised your score back up from 600 to 700 or something, but for every person like that, there are a 100 that won't be able to and will be plagued by a low score the rest of their life

GameBreaker · Jan 20, 2010

don't go with one of those companies. Don't do it. It will ruin your credit one way or another.

BlackBart · Jan 20, 2010

Take it from someone who has been up and down credit card mountain a time or two, stay away from the consolidation companies. You can do it yourself.

Somebody above mentioned Dave Ramsey. Find him and listen to him. You will think he's nuts for about two weeks. Keep listening. Buy his book "Total Money Makeover". Do what he tells you to do--good stuff.

Read and believe. He will lead the way.

bigtex · Jan 20, 2010

Found this on the net and thought it might be helpful to you.

Sep 28, 2009 -- Negotiating credit card debt down yourself

Debt-settlement firms promise they can negotiate your credit card debt down to just pennies on the dollar. But are they true to their word?

Too often that promise is an illusion. You usually pay an upfront fee to the debt-settlement firm, plus a monthly retainer. Their strategy is to get you to stop paying on your bills. They typically have you take the money you would have paid on monthly minimums and stash it in a savings account.

The basic idea is to make the credit card companies so desperate that they'll settle with you. The reality, however, is that you just wind up damaging your credit.

Did you know that you can negotiate down your debt by yourself? Begin by figuring out what you owe and what you can afford to pay. Then call up your various creditors and say, "My total debt is X number of dollars and I can afford to pay you X amount every month."

Set a condition that all of your creditors must agree to your terms in writing or no one gets anything at all. And don't give them access to your checking account! You'll want to pay them directly to safeguard your funds.

It's important to know that this approach will foul up your credit and you'll get a tax bill from the IRS for each settlement. If you owe $10,000 to one creditor and they take $2,000, then the $8,000 that's written off is considered taxable income for you.

The power you have lies in the fact that credit card companies are scared you'll go bankrupt and then they get zero. More than a million people are expected to file bankruptcy in 2009. That means creditors that wouldn't deal with you before now probably will.

Finally, there is another option. You can use NFCC.org to pay off your debt over time in a negotiated settlement. Those who are particularly burdened may qualify for a hardship debt-management plan (DMP) through the above link. 21 comments | Permalink

seanm0520 · Jan 21, 2010

I could easily pay each company $50-60 per month but some are past due. Would they really be willing to waive the past amount and take what they can get? If that's the case, I'll easily talk to them. So I should STOP avoiding the 30 calls a day?

I'm pretty sure taking out a small personal loan at a bank would be the best option, for like $4,000 but I'm afraid all of this has made my credit to low to qualify.

DrunkenHorseplayer · Jan 21, 2010

Here's how to get rid of the calls; send each collection agency a cease comm letter.

http://www.budhibbs.com/cease_comm.htm

gatorjon25 · Jan 21, 2010

Let me first start off by saying I am a partner on a mid-sized debt settlement firm.

I constantly work with people who have low and high credit card debt, you are nowhere near in the situation of needing help from a settlement company. First off, you don't have enough debt. $3300 dollars is so minimal, I know it may seem like a lot; but it really isn't.

Not all settlement companies do what they say they are going to do. I can tell you this, if you are already behind on these accounts, just let them go further back. When they get to collection companies, settle the debt yourself if that is what you need to do.

I am more than willing to do the negotiation for you at no cost if you would like me to. I will do it just to help out a fellow rx'er. Keep in mind that when you do this your accounts will say that they are settled on your credit report.

That is a better option than just not paying your bills and letting them go. Your debt is too low for any debt settlement firm to work on. Industry wide we have a minimum credit number of 5k.

Good Luck

Jon

DollarDay · Jan 21, 2010

Nothing against GatorJohn but as a collection agency owner I can tell you the work the debt settlement companies do you can do yourself at no cost.

Most banks are now allowing pre-charge off accounts to be settled (especially Bank of America & Chase) at some pretty low amounts (like 40 cents on the dollar or so).

But to do a settlement you've got to make the payment in a lump sum or over maybe 2 payments, depending on the bank.

If you send a cease and desist letter you run the risk of getting sued so be careful what you wish for.

PM me if you want more info from a bill collectors perspective.

seanm0520 · Jan 21, 2010

Thank you everyone, I do appreciate the help/advice.

gatorjon25 · Jan 21, 2010

baccy said:
Nothing against GatorJohn but as a collection agency owner I can tell you the work the debt settlement companies do you can do yourself at no cost.

Most banks are now allowing pre-charge off accounts to be settled (especially Bank of America & Chase) at some pretty low amounts (like 40 cents on the dollar or so).

But to do a settlement you've got to make the payment in a lump sum or over maybe 2 payments, depending on the bank.

If you send a cease and desist letter you run the risk of getting sued so be careful what you wish for.

PM me if you want more info from a bill collectors perspective.

Bacci,

You are most certainly right. I am willing to help out seaman at no charge because he has such little debt and he is a fellow rx'er.

DollarDay · Jan 21, 2010

gatorjon25 said:
Bacci,

You are most certainly right. I am willing to help out seaman at no charge because he has such little debt and he is a fellow rx'er.

sean - if he's willing to help for free i would probably take it.

While we might bitch and moan as collectors about dsc's, i would definatly accept his help as he probably has a chart as to which agency settles at which percentages for each client already.

Gator - nice of you to do that for him. :103631605

seanm0520 · Jan 21, 2010

Certainly something I'd greatly appreciate though I will say, lump sums is not something I am able to do at this time. $100 a month I could swing pretty easily. If that matters at all. And I do realize $3300 is not a hefty amount but managing classes and work...it is, hah.

Furmanski · Jan 21, 2010

Just FYI,

If you do get relief from your credit card company, and you can prove that you are "insolvent", you will not be required to include the "forgiveness" as income for tax purposes.

IRS Form 982 is what you would fill out. Option 1b is what you would claim.

This is a little known tax form, but is very useful for those that need it. Otherwise, you will be required to pay ~30-35% of the "forgiveness" from the credit card company.

It always helps to know tax law. :toast: