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- inactive, on 04/01/2008, -0/+32As the article mentioned, getting out of debt on your own is a long/taxing experience.
Even after I paid off all my debt, I had to deal with the fact that nobody wanted to do business with me for basically being a dead beat on paper. I couldn't get a credit card, rent an apartment, or open a bank account. It was even more embarrassing when work would have to submit my information for a corporate credit card or cell phone, and they'd have to co-sign after I would be promptly denied.
I spent 7 years living in a crappy apartment repairing-repairing-repairing. I begged the manager at the bank to let me open an account, fought hard to get a secured credit-card with a real bank, and dealt with multiple heartaches every couple of years when I'd try to find a better place to live - continuing to be denied promptly.
This year I was finally able to get my dream place. I had enough credit to have the good outway the bad, and most of the bad has finally fallen off. At the moment I have only one negative account, and that is scheduled to drop off next year.
Ruining my credit almost ruined my life. The years I spent in that crappy apartment were hell. The constant denials, begging, and having to suck up my pride on more then one occasion has led me to never, ever, mess with my credit again. It was worst feeling in the world to have the resources & funds to do make my dreams happen, and be rejected at every turn.
Your credit is your history. Be careful with it. - mechman, on 04/01/2008, -2/+27I defaulted on a credit card a few years ago (young and stupid), and eventually the bank sold it off to a debt collection agency. They called, called, and called. After doing some research, I came up with this solution (pertaining to credit card debt):
1) Tell them to show you proof. They are, within 30 days, legally obligated to come up with copies of the receipts with your signature on it to prove you made those charges. If they cannot, then they must drop the debt. Sounds easy, right? Of course not - if the company cannot find it within a certain amount of time, they simple sell your debt to another collector, and the process starts over again.
2) Don't bother changing your phone number. These people have your past addresses, social security number, spouse's name, children, etc. - changing your number won't do anything except delay them for a bit and probably cost your more money and hassle.
3) If you decide to pay it off, speak with an attorney first. I owed $800 on a credit card four years ago. By their numbers and interest rates, they wanted $2200 from me - on top of the $800!
Just my pennies - take it or leave it. :) - UberNick, on 04/01/2008, -0/+23I don't see any value in your vague advertisement/comment.
"they are in no way a debt settlement company"
- Then what do they do? How are they different?
"...does whats right 100% of the time"
- What's that supposed to mean? Do you have a personal experience you can share?
"they offer services that no other can"
- Like what? What do you have experience with?
"and even offer an business opportunity"
- What are you talking about? Do you mean to go working for them? - moulin1, on 04/01/2008, -0/+22I can't help but thiink that debt settlement companies are founded, perhaps secretly, by credit card companies. If you try to negotiate your own debt they will always helpfully suggest a debt settlement company.
- purzzzell, on 04/01/2008, -1/+21I've done the debt settlement ***** - this was about 5 years ago - this report is dead on - they say "we'll help you negotiate x y and z" yet their contract IS unreadable.
I ended up paying off when I got two JUDGEMENTS against me from creditors.
I'm in much better shape now, but my credit is still damaged.
For those interested in fixing this THE RIGHT WAY, go to www.creditboards.com , enroll, read the newbie faqs and start asking questions. - kingmanic, on 04/01/2008, -0/+17Someone advised me a long time ago that "It's really expensive being poor". It seems a lot of business are set up to gouge those who hit financial problems. Slums houses that are triple the rent of normal rentals catering to those with poor credit scores who can't rent anything else. Car dealership who sell POS cars with insane interest rates to those with poor credit ratings. Loan shark like pay day loan corps which charge insane rates. Mortgages which are 4 or 5 times the prime rate (ARM balloon) which catered to the poor with confusing rate schemes. Most cheap food is unhealthy, fattening, and chock full of sugar and preservatives. Many retail stores have high interest rent to own deals. Most utilities will sell you crap at inflated prices and inflated interests to pad their "debt" for tax purposes. The world is generally out to get the poor, and the poor are often not smart enough to notice until their nostril deep in debt.
- joeanon, on 04/01/2008, -1/+16There are actually two types.
Debt Consolidation and Debt Settlement.
Debt Consolidation is definitely run by the credit card companies.
Debt settlement is most likely not since you ultimately attempt to settle 50 cents on the dollar.
I have used both, and both COULD work.
However, the trick they fail to tell you is that YOU CAN SETTLE ON YOUR OWN.
You just stop paying and 6 months later offer the company half of what you owe. They will try to talk you up, so start low.
I settled Discover on 10k at 53% or 53 cents on the dollar. It took merely an extended time of not paying and then a phone call negotiation.
However, most people cannot manage to save up a large chunk of money, BUT if you can you can pay your credit debts at roughtly 50%. AND most companies just give up on charging you ongoing interest because they know you just won't pay it.
When negotating, keep it simple and make the terms very clear.. I OWE YOU NOTHING AFTER THIS PAYMENT. Get a receipt of the transaction also.
I think it's a fairly practical solution IF you can save up the money, but few people can, which is the reason they have credit debt in the first place.
Debt consolidation is more practical, but in my experience they want you to pay MORE per month and in return will offer one payment for multiple cards and a slightly lower APR depending the company.
Once you've stopped paying the minimum payment debt settlement makes more and more sense.
Ultimately they have few means to get that money back cost effectively. However, if you have a lot of equity them might sue for real.
I've gotten letters saying they WILL take me to court, but the reality is that would cost them money and they would get nothing.
Be frank with them and say .. you developed cancer or some other medical condition. You have a one time lump sum and you want to settle NOW while you have the money.
They will basically ***** themselves trying to get their manager on the phone to pay that debt off. They know however your got that money, they need to act fast to make it theirs. 50 cents on a dollar is a hell of a lot better than nothing.
However, if you use a company they charge fees and it's a total waste because you can easily save more doing your own negotiation even if they get a better rate the fees offset the rate.
I think most credit companies suggest Debt consolidation, no settlement, but either way they are happy to get their money, so they could very well run both. I doubt they would be into informing people in general that you can settle for less than you debt.
When I talked to the debt settlement woman over the phone, she told me how it worked and how they negotiated 40-50% off your debt and charged a fee.
She could have kept it all a secret and just told me they have a special arragment.
By telling me what they do, she informed me how to do it myself, so I found that very helpful and never would have happened without calling up a debt settlement company. - saturnx8, on 04/01/2008, -2/+17shameless plug ... debt settlement is a sham and shouldn't be used, better yet learn how to not use credit cards, or learn how to use them properly.
- drgirlfriend, on 04/01/2008, -1/+13Here's a great way to get out of debt---stop paying interest on soap and tacos, ie don't use credit cards.
- kingmanic, on 04/01/2008, -0/+12I'm glad your out of that situation. When My parent Came to Canada they did the same thing but not for credit reasons. they just assumed thats how everyone lived. Live in the cheapest place you can tolerate, sock as much money away as possible, eat as cheap and as healthy as you can, never buy new cloths unless you really had to, skimp on every aspect of life you can (we only got cable when i was in gr. 10), and never eat out. Subsequently they managed to raise 3 kids, send them all to college and buy the first house and paid it off in 5 years, bought the second house with a cashiers check, and settle in for a secure retirement all on not that much more then minimum wage. I think I need to learn from that. I just looked at my eating out bills and noticed it exceeds all other monthly expenses i have.
- akatherder, on 04/01/2008, -2/+13"By their numbers and interest rates, they wanted $2200 from me - on top of the $800!"
Am I missing something or do you not understand "interest"? I'm surprised it was ONLY $2200 after 4 years of penalties and monthly APR. - DrAudiology, on 04/01/2008, -1/+11So if I understand this correctly. You purchased stuff you could not afford, decided not to pay for it, and are keeping the items and happy to be screwing the company that lent you money? hhhmm.. Maybe I should offer to buy your car and pay you 50% of the negotiated price and drive off with my finger in the air... same thing.
- IZZ0, on 04/01/2008, -0/+10The whole idea is to HELP people get out of debt not give them more. Primerica/Citibank and their pyramid scheme is not the answer and neither are counseling services....why pay for something which you can do yourself?
I''ve dealt with these kind of companies for 15 years and the author is right in the regard that very few services like those actually help. Forget what you hear on television or the radio that they can stop collection calls and reduce interest rates....they can't and there isn't anything they can do to make a lender do so. When I receive correspondence from any company like that I usually toss it and try to work something out with the customer instead. - smacksaw, on 04/01/2008, -0/+10You don't need a company. My ex-wife and I did it ourselves after we got divorced. Quit paying everything you don't care about losing. Just pay them $20/mo. Get a pager or an extra number and change every bill to that phone number. Tell them not to call you when they do.
If you paid $200/mo on 5 cards, save that $200 for 2 months so that you have $2000. Call every creditor, ask to speak to a supervisor and tell them you will settle right now for 10 cents on the dollar and the first person to take that deal gets it. Then, in writing have them send you a settlement letter and mail your payment via certified mail. Repeat until all are done. Side note - AMEX won't do that. The lowest they will go is 40%. Not all will actually close your account, and amazingly some will offer you credit right after you closed the account. Vultures?
Then, check your state laws. If anything has been turned over to collections, usually after about 2 years it's no longer collectible. Dispute it.
Finally, once your accounts are closed, bombard your credit bureaus every few weeks with certified letters disputing the disposition of your accounts. The creditors won't give you good marks. Tell them they were paid as agreed. Eventually, the companies archive your account or just get tired of responding and will acquiesce. The law says they have to correct things wrong with your profile.
That's what we did. Try it at your own risk. - airwalkery2k, on 04/01/2008, -0/+9Great, now I am going to cringe every time I see an ad or a commercial for one of these companies.
- purzzzell, on 04/01/2008, -0/+9PRIMERICA A BUSINESS OPPORTUNITY?? call a spade a spade, it's an MLM. and they're financial planners. that has nothing to do with debt settlement scum - and they're an MLM - which is another word for "*****"
AND YOU ***** JOINED TODAY TO DO NOTHING ELSE BUT MAKE THAT COMMENT...grr...reported as spam. - akatherder, on 04/01/2008, -0/+8A fellow I met in NC referred me to Dave Ramsey. I guess he is big in the religious community because of his stance on tithing, but if you ignore that component of it, his advice is great (if not obvious).
- slvrbullet87, on 04/01/2008, -0/+7By not paying a bill for 6 months you destroy your credit rating. Try this instead, dont spend 10k on a credit card if you cant pay it off.
- inactive, on 04/01/2008, -1/+8Especially considering that the APR jumps from something low to over nine thousand percent if you are late or miss one payment.
- Conwaysb0718, on 04/01/2008, -1/+8Never, EVER "settle" your debt... unless you plan on never borrowing money from any legitimate lending institution for at least 10 years.
- Albear89, on 04/01/2008, -2/+9boo.
boo I say.
CCS and the like is a horrible sham. If you ever. ever ever ever ever ever find yourself in financial outs. I would suggest a guy named Dave Ramsey.
I have worked for ten years in credit and collections and this guy is the real deal.
http://www.daveramsey.com/radio/home/ - Changa, on 04/01/2008, -0/+6Primerica is a damn evil company.
- Pstmann, on 04/01/2008, -0/+6Worse than spam, they are the scientologists of the finacial world. A huge mulit-level-marketing (read: pyramid scheme) cult.
- BESTenemy, on 04/01/2008, -0/+6***** guaranteed.
- sovereign3, on 04/01/2008, -0/+6Don't bother replying. It looks like total spam to me.
- GreatSunJester, on 04/01/2008, -0/+6If you have greater than 20% on any card and have not been late in payments -- try calling them yourself. Simpy ask if there is anything that can be done to reduce your percentage. The worst is they say no, on the other hand you may end up pleasantly surprised. Now, if they DO reduce your rate, do yourself a huge favor and reduce your payments by half the difference. You still have a bit more money to use and are paying down your card(s) faster.
- kipmartin, on 04/01/2008, -2/+8Primerica is one of those 'Work for us. We don't pay you until you find clients for us and then we kick back a small percentage." If you work for them for a year, you'll be making $18K in no time--providing you work 70 hours a week pestering your friends, family, and signing more slobs up to work for Primerica like Racjac, the obnoxious moron who posted the Primerica ad here.
Work for Primerica and turn you best friends into business prospects! - willsani, on 04/01/2008, -0/+6In most cases you can negotiate with your credit card company to lower your interest rate. It is a matter of proving that your hardship...
- akatherder, on 04/01/2008, -0/+5This article just about gave me a heart attack. Just last month I sent off a check to settle one of my wife's old debts. The original amount was around $380 and they offered to settle for $257 (even pay it in 3 installments if I want). I was really leery because it sounded "too good to be true". Well I wrote the check for $257 and they even sent me a letter saying "we all good". But the description from this article makes it sound like they were going to come rob me.
- neodem, on 04/01/2008, -0/+5Sounds like a whistle-blower lawsuit in the making..
- yohnstoppable, on 04/01/2008, -0/+5I'd also advise staying away from those payday loan places. I always see those around military bases, and they are chicken hawks. Those places will ***** you sideways at the drop of the hat. I'm not sure where else they are, but they were always around bases due to the option of notifying someone's chain of command who couldn't pay back the loan. They'd charge insane interest rates that would end up being far more than initially loaned after just a week or 2. Basically, don't go for the quick fix
I normally don't read the consumerist, as a lot of it is just sensationalist garbage, but this was actually a good article - kipmartin, on 04/01/2008, -0/+5racjac--you making any money? or does that come 'later'?
- jacobonline, on 04/01/2008, -0/+4Makes me want to watch fight club and dream about taking all those default 30% ***** down.
- RustyJ, on 04/01/2008, -1/+5Long story short... Unless you completely understand credit, don't ever get involved with it.
- zimmp, on 04/01/2008, -1/+5Blame Best Buy!
- slvrbullet87, on 04/01/2008, -0/+44 years isnt one payment
- Rikkochet, on 04/01/2008, -0/+4Primerica is the only company that I've been tempted to bomb. They are scum, pure and simple (Google them, it's delicious), and anyone involved with that organization who can see what they're about can die in a car wreck for all I care. They prey on the poor, the ignorant, and the desperate. In college my girlfriend got roped into one of their "recruitment open houses" (I was of course dragged along) where they showed how easy and profitable it was to work for them as an insurance sales agent! Just call your friends and family, sell them insurance, get rich! Oh, but first, you have to become a "certified salesperson" and that's a $400+ course. Plus materials and some additional costs for "graduation" and rubbish. Yep, you have to pay them money to work for them.
For the rest of my life I will continune to boycott every company in the Citi group for having such a disgraceful subsidiary. Burn in hell. - dodgejon, on 04/01/2008, -0/+4This article makes me sick. I hope these people rot.
- SpectralSounds, on 04/01/2008, -0/+4A couple years ago, I worked as a skip tracer on weekends for a second job. Trust me, you can change your number successfully and not be found. Some of the data logged on you is so bogus you would be amazed. Not to mention so many people I skip traced were victims of identity theft or perpetrators of identity theft, because of multiple names using same SSN.
Plus, there is a statute of limitations on debt collection. It varies by state ( I believe the maximum is 10 years and the shortest is 3?), but legally after that date nobody can attempt to collect debt from you and it has to be wiped off of your credit report. The second you make ANY payment on an account though, the statute of limitations is reset back to 0. - purzzzell, on 04/01/2008, -0/+3the forum section isn't too bad, and the reason I recommend them is because they're help has let me pick my credit back UP after the mess that DebtXS left it in
DebtXS is one of the bad guys that the consumerist article is about - Ascus, on 04/01/2008, -0/+3One great thing about having bad credit it gets you off many mailing list and call list. The combination of nothing owed and bad credit, no body wants to sell you anything. I went through that with a divorce, just kept my house payment up and my car was paid off. I closed all my cards, after that I was on cash only basis. I found out the interest does not accrue once in collections. Every card company settled in full for 50c on the dollar (many would have gone lower, but I felt I would pay at least my half). I continued living in my house for another 7 years (making payments), and had to buy my next car with cash. But when I went to buy my next house, my credit was good, but with 35% down, they really didn't care.
- CedEx, on 04/01/2008, -0/+3Your credit card must have had a rate close to 30%, so after 4 years of non-payment, $2200 is about right.
- smacksaw, on 04/01/2008, -0/+3I didn't say to lie. Business is about negotiation. They have all of the laws and resources to ruin you.
- inactive, on 04/01/2008, -0/+3I have worked in the Collection industry for 20 years, and it is well known that these "debt settlement companies" are shysters. WE can settle debt with the consumer for FREE (other than the reduced balance they now owe- no "fees"). Also, the chances of getting sued and garnished if you stay in touch directly with your creditors is VASTLY reduced than if you just stop paying them and involve a third party, which is a hassle for creditors.
One other point: Debt-Consolidation/Counseling companies are indeed owned as subsidiaries of credit card companies. Often we are asked to directly connect a consumer behind on a debt with the lending company's own DCS (Debt counseling service).
Whether you like collectors or not (and the industry has changed vastly in regard to harassment and customer service) a simple bill collector has as much power - if not more - to handle your settlement request FOR FREE than a debt settlement service, AND we can freeze interest and late fees while you pay only a pre-negotiated amount. Seriously. Better to deal with debt collectors. If you get a nasty one, ask for a supervisor (we're required to actually put only true supervisors on the phone; it's illegal to claim you are a super or manager unless you are). - Jeffiner25, on 04/02/2008, -0/+3what if the "smallest debt" has no intrest rate but the largest has 18%?
The STRATEGY is to pay off the one with the HIGHEST intrest rate 1st. Why pay 1,000 off when your going to have more in intrest on the 18%? - cgbspender, on 04/01/2008, -0/+3So you save money for a few months and pay the debt settlement company's fee instead of using all available money on paying off the debt (and thus paying less interest to the creditor and no fees to others)? Even without a horrible contract it sounds stupid.
What I heard works over here is the following: Get a relative or friend mail the creditor a check for roughly 50% of the owed money. There should be a letter with the check that says your relative would like to settle your debt, but they may only cash the check if they agree to waive the remaining debt (including fees, interest etc.). If they cash the check and still want money from you you can go to court. Just make sure the check is not in your name (and your relative does not owe them money, too) or else they can get the money without agreeing to the terms. And, of course, get some legal advice if you plan something like that. - mgithens, on 04/01/2008, -0/+3I am a fan of Dave Ramsey... the best part about his ideas is that he doesn't need your money!! He gives 100% of his info away for free on the radio... the books and live events are just to boost your enthusiasm about getting out of the rut of debt. On top of all this, it is a whole life plan... a way to go from 20 something to a millionaire... how much life insurance, college funds for your kids, home mortgage "smarts"... I whole heartedly recommend that anyone who is losing sleep at night over money - give him a listen. www.daveramsey.com
- flip2trip, on 04/01/2008, -0/+3There are no non-profit debt settlement companies(that I know of) but there are non-profit debt consolidation companies.
- Bodhinature, on 04/01/2008, -0/+3No ads, douchebag. Sell your ware's someplace else.
- joeanon, on 04/01/2008, -0/+3Good plan.. i like how you pit them against each other.
I also tell them I am unemployed and have a medical condition such as cancer and I have this lump sum RIGHT NOW... take it while you can. -
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