WhoRUSupposed2Be Posted June 30, 2009 Share Posted June 30, 2009 I just recently applied for this coorporation called "The Debt Consolidation Group" based out in Florida. They have been incredibly helpful but it seems like five years to resolve your debt is an eternity (well, considering I do have five major credit cards and counting six). Are there any out there who are involved with these programs? Edit: It is called "The Debt Management Credit Counseling Corp." Link to comment Share on other sites More sharing options...
Rdskn4Lyf21 Posted June 30, 2009 Share Posted June 30, 2009 First thing that comes up in Google: http://www.ripoffreport.com/reports/0/319/RipOff0319247.htm Link to comment Share on other sites More sharing options...
Capt. Kaos Posted June 30, 2009 Share Posted June 30, 2009 I hear all the time: " Do not use a debt relief company to fix your debt". That along with the ripoff report from above I would suggest to get out as quickly as possible. Link to comment Share on other sites More sharing options...
sly Posted June 30, 2009 Share Posted June 30, 2009 Why pay someone else to basically hold your debt over your head? Also, using "debt relief" programs can make problems look worse on your credit report. If you really feel like you have to consolidate your debt to help pay it off, why not try a bank or local credit union? Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 First thing that comes up in Google: http://www.ripoffreport.com/reports/0/319/RipOff0319247.htm Ouch, I would like to know exactly who his representation was. I have a direct contact and website address where I can keep track of my payments on a daily basis. Link to comment Share on other sites More sharing options...
Elessar78 Posted June 30, 2009 Share Posted June 30, 2009 Yeah I wouldn't use those guys. I have heard many negative things about debt relief entities. Sorry to be blunt, but how bad is your debt problem (you don't need to give a dollar amount, if you don't want to)? Are you getting harassing calls from collectors? Is it credit card, auto, student loans, or mortgage (the type does matter)? Are your monthly payments for debt not leaving you enough to survive on? I'm asking because not all debt is the same and just having a strategy to deal with it can ease a lot of the pain. Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 Why pay someone else to basically hold your debt over your head? Also, using "debt relief" programs can make problems look worse on your credit report. If you really feel like you have to consolidate your debt to help pay it off, why not try a bank or local credit union? The banks (credit union included) are no different than these consolidation groups. A loan is given with the expectations to pay it back... but there are other players involved also such as interest payments and finance charges: http://www.wisegeek.com/what-is-a-loan.htm Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 Yeah I wouldn't use those guys. I have heard many negative things about debt relief entities.Sorry to be blunt, but how bad is your debt problem (you don't need to give a dollar amount, if you don't want to)? Are you getting harassing calls from collectors? Is it credit card, auto, student loans, or mortgage (the type does matter)? Are your monthly payments for debt not leaving you enough to survive on? I'm asking because not all debt is the same and just having a strategy to deal with it can ease a lot of the pain. It is insurmountable because I do not make that kind of money to satisfy these inclementing late fees. Link to comment Share on other sites More sharing options...
SnyderShrugged Posted June 30, 2009 Share Posted June 30, 2009 Your best bet is to simply start an open and candid dialog with your creditors. Debt consolidation still is murder on your credit and you can do everything they are doing at less cost and credit impact. Just be honest and straightforward with them and never (I repeat...NEVER) ignore thier calls to you. Link to comment Share on other sites More sharing options...
twa Posted June 30, 2009 Share Posted June 30, 2009 I would be very wary of using them, my step father lost tens of thousands with one....of course he is a idiot,so maybe you will have better results. Link to comment Share on other sites More sharing options...
Elessar78 Posted June 30, 2009 Share Posted June 30, 2009 It is insurmountable because I do not make that kind of money to satisfy these inclementing late fees. I'm asking what type of debt you have. For example, credit cards are unsecured debt. You can walk away from it. Collectors will harass you, but they have no recourse. It will screw up your credit rating, but who cares? After this, you'll never use a credit card again. BUT, you can also talk to a credit card company. Once they realize that they're not gonna get another dime out of you, they'll play ball. Give them a dollar amount and tell 'em take it or leave it. Auto loans, mortgages, and hospital bills are different they can take your car or house. But since you used the term "late fees" I think you're talking about credit cards. Link to comment Share on other sites More sharing options...
Elessar78 Posted June 30, 2009 Share Posted June 30, 2009 Myth: Debt consolidation saves interest, and you have one smaller payment. Truth: Debt consolidation is dangerous because you treat only the symptom. http://www.daveramsey.com/the_truth_about/debt_consolidation_3035.html.cfm Link to comment Share on other sites More sharing options...
Smoot Point Really Posted June 30, 2009 Share Posted June 30, 2009 There are benefits for some in these plans that people are not talking about... 1) For 5 years (or for as long as you need the service), you will be forced to live without credit... If you have a very bad habit of abusing credit, this will help you get off of it. Make sure you have no penalties for leaving the program early. 2) You only get a reduced interest rate from all your creditors based on enrolling in the program because you agree that you will close all your credit accounts and you will make these monthly payments at reduced rates. 3) Over 5 years, it will help your credit score. Your credit score is already piss-poor... saying it will hurt your score in the short term is non-sense... you already have a crap score and you won't be applying for new credit while you are on the program. So you won't need a high score. The important thing is to continue to make payments (and as long as you do, your score won't go down) and have a healthy score at the end of the program for when you need it to buy a house or a car... you are freeing yourself from unsecured debt, so you can eventually enable others to trust you with larger ticket secured debt. As for the guy who ****ed about losing his $1,100 (and he isn't wrong to *****, but he is painting a flowery representation of his life without debt consolidation)... He would've probably pissed that away in interest and not been on his way to reducing his credit score without the service. Anyway, it depends on your situation and how badly you are addicted to debt... Go in with your eyes-wide-open... Know that you may lose your initial payment, but remember why you are in debt consolidation to begin with... You need help... Link to comment Share on other sites More sharing options...
zoony Posted June 30, 2009 Share Posted June 30, 2009 Myth: Debt consolidation saves interest, and you have one smaller payment.Truth: Debt consolidation is dangerous because you treat only the symptom. http://www.daveramsey.com/the_truth_about/debt_consolidation_3035.html.cfm I like Dave Ramsey's overall message, but he's a little to militant for my tastes. He's about 1/2 as smart as he thinks he is. However, the article you linked was a good one Link to comment Share on other sites More sharing options...
Southtown Posted June 30, 2009 Share Posted June 30, 2009 The OP is doing debt management, not debt consolidation. I think this is the Dave Ramsey link that fits better. http://www.daveramsey.com/the_truth_about/debt_management_3020.html.cfm Link to comment Share on other sites More sharing options...
Elessar78 Posted June 30, 2009 Share Posted June 30, 2009 I like Dave Ramsey's overall message, but he's a little to militant for my tastes. He's about 1/2 as smart as he thinks he is. Agreed, I like (and use) some of his principals, but I think it's a good starting point for people in debt trouble. His methodology and theory is sound, but there's always more than one way to skin a cat. Link to comment Share on other sites More sharing options...
Smoot Point Really Posted June 30, 2009 Share Posted June 30, 2009 The OP is doing debt management, not debt consolidation. I think this is the Dave Ramsey link that fits better. http://www.daveramsey.com/the_truth_about/debt_management_3020.html.cfm Sorry, but the link is full of crap... I know someone who went through this and then got an FHA loan afterward. They don't treat it as if you filed for bankruptcy. Link to comment Share on other sites More sharing options...
Elessar78 Posted June 30, 2009 Share Posted June 30, 2009 The OP is doing debt management, not debt consolidation. I think this is the Dave Ramsey link that fits better. http://www.daveramsey.com/the_truth_about/debt_management_3020.html.cfm This is where I think Dave Ramsey gets off message. His "truth" says to not use credit management companies because your credit score will be trashed, but one of his other tenets is to not care about your credit score because it's just an instrument to allow you to borrow more money. Which he is very opposed to (borrowing money). Basically, don't use these guys because while it may make your load lighter you're not really fixing what's wrong. Link to comment Share on other sites More sharing options...
jthor99 Posted June 30, 2009 Share Posted June 30, 2009 Dont credit card companies own "debt consolidating companies"? Atleast thats what I thought I heard at one point Link to comment Share on other sites More sharing options...
Johnny Punani Posted June 30, 2009 Share Posted June 30, 2009 Dont credit card companies own "debt consolidating companies"? Atleast thats what I thought I heard at one point They "fund" 99% of those companies... credit counseling/debt consolidating companies are nothing but collection agencies for credit card companies. All the while, giving the impression they are looking out for the consumer's best interests. :mad: Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 They "fund" 99% of those companies...credit counseling/debt consolidating companies are nothing but collection agencies for credit card companies. All the while, giving the impression they are looking out for the consumer's best interests. :mad: Question?! If these Credit Card companies do infact fund these collection agencies as you purport, then why are they settling for a fraction of reported payments due? It's like, I'll bend but won't break only as long as I see something in return. Link to comment Share on other sites More sharing options...
Smoot Point Really Posted June 30, 2009 Share Posted June 30, 2009 This is where I think Dave Ramsey gets off message. His "truth" says to not use credit management companies because your credit score will be trashed, but one of his other tenets is to not care about your credit score because it's just an instrument to allow you to borrow more money. Which he is very opposed to (borrowing money). Basically, don't use these guys because while it may make your load lighter you're not really fixing what's wrong. Actually, while you are on the program you learn to live without credit... You are helping fix the problem... you just aren't killing your already low credit score in the process. Does anyone (other than me) actually know anyone who has used a debt management service? I assume the OP wanted advice from people who actually know what they are talking about. Obviously... The cheapest solution is "Daddy's trust fund"... But... If you don't hit the lottery or develop and get away with your own ponzi-scheme, you are left with few options: 1) Pay your monthly credit card bills at an exhorbitant rate without closing your cards 2) Try to work with your credit card company to re-negotiate your rate while closing your credit card (they probably won't go for this unless you go through a debt management company). 3) Go through Debt management, cut all your cards up, close your accounts, let them renegotiate your rates with your credit card companies, pay them off until you are completely free of debt. The reason debt management works is because you enter into agreement with the debt management company to close ALL of your accounts. Why would a credit card company negotiate with you individually if they weren't assured that you wouldn't be only trying to get a lower rate in order to close just their unsecured loan? Anyway, there are positive stories out there... Whether or not it's good for the OP depends on the situation. Ultimately, it comes down to how badly someone feels addicted to credit and whether or not they want help in getting out of that cycle (or whether they think they can weather the storm and get out of it themself). There is also a clear end in sight to your debt problem, something that won't be crystal clear if you do it on your own. Also, you have to determine the cost of going it alone versus getting help... Let's assume you have $40K in debt and you want to pay it off in 3 years. If you are very lucky and have an unsecured APR of 15% (usually it would be 20%), you are looking at monthly payments of around $1368 for 36 months and total interest paid of $9256.28... That is... IF you can afford this per month and don't have the standard 18%+ APR... Debt management will mean you get cut off from your credit cold-turkey and drop your APR to around 10% on average. You'd probably save at least $100-$200 per month and at least $3K in total interest using a realistic scenario. It doesn't hurt to investigate. Link to comment Share on other sites More sharing options...
Smoot Point Really Posted June 30, 2009 Share Posted June 30, 2009 They "fund" 99% of those companies...credit counseling/debt consolidating companies are nothing but collection agencies for credit card companies. All the while, giving the impression they are looking out for the consumer's best interests. :mad: Debt-consolidation might be... Credit Counseling/Debt Management is something different. Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 Sorry, but the link is full of crap... I know someone who went through this and then got an FHA loan afterward. They don't treat it as if you filed for bankruptcy. Exactly, this is why handlers such as himself are pure propagandists with agendas. Link to comment Share on other sites More sharing options...
WhoRUSupposed2Be Posted June 30, 2009 Author Share Posted June 30, 2009 Actually, while you are on the program you learn to live without credit... You are helping fix the problem... you just aren't killing your already low credit score in the process. Does anyone (other than me) actually know anyone who has used a debt management service? I assume the OP wanted advice from people who actually know what they are talking about.Obviously... The cheapest solution is "Daddy's trust fund"... But... If you don't hit the lottery or develop and get away with your own ponzi-scheme, you are left with few options: 1) Pay your monthly credit card bills at an exhorbitant rate without closing your cards 2) Try to work with your credit card company to re-negotiate your rate while closing your credit card (they probably won't go for this unless you go through a debt management company). 3) Go through Debt management, cut all your cards up, close your accounts, let them renegotiate your rates with your credit card companies, pay them off until you are completely free of debt. The reason debt management works is because you enter into agreement with the debt management company to close ALL of your accounts. Why would a credit card company negotiate with you individually if they weren't assured that you wouldn't be only trying to get a lower rate in order to close just their unsecured loan? Anyway, there are positive stories out there... Whether or not it's good for the OP depends on the situation. Ultimately, it comes down to how badly someone feels addicted to credit and whether or not they want help in getting out of that cycle (or whether they think they can weather the storm and get out of it themself). There is also a clear end in sight to your debt problem, something that won't be crystal clear if you do it on your own. Also, you have to determine the cost of going it alone versus getting help... Let's assume you have $40K in debt and you want to pay it off in 3 years. If you are very lucky and have an unsecured APR of 15% (usually it would be 20%), you are looking at monthly payments of around $1368 for 36 months and total interest paid of $9256.28... That is... IF you can afford this per month and don't have the standard 18%+ APR... Debt management will mean you get cut off from your credit cold-turkey and drop your APR to around 10% on average. You'd probably save at least $100-$200 per month and at least $3K in total interest using a realistic scenario. It doesn't hurt to investigate. Good write-up Smoot Curious... are you "debt management" assoicate? Does this mean that I will not able to use my credit cards while still enrolled in the program? Even if, I want to use them towards just pumping gas? Is that considered as an infraction of the agreement to close the account in order to settle or will the Credit Card companies feel reluctant? Link to comment Share on other sites More sharing options...
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