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 Posted: Thu Oct 05, 2006 9:11 am Subject: Ok, so after I finally talked to someone. |
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After speaking to a councelor im kind of confused.
Right now I have roughly $20,000 in CC debt. They are cutting my total debt in half roughly $10,000. Since that didnt make sense I asked them to explain to me how that is possible because it doesnt seem it at all. If i didnt scan this forum I wouldve just hung up the phone and said "yeah Right", but i decided to listen a little longer. They said every Creditor is able to take the remaining balance and write it off. I know you can do it but another part of me is saying SCAM SCAM SCAM. I asked them to email me a contract which seems to keep me away from any wrong doing. If accepting this agreement my total payments will be close to $500 for 2yrs.
Now something else im not sure of. To go through with this, they will put my first 5 payments into some federal account and will not go towards ANY of my Creditors. I asked why, they said they need my accounts to go delinquent. I told them if they werent I wouldnt be calling. What happens. My accounts will go delinquent for 5 months THEN they will negotiate on how to take care of my creditors. I am extremely nervous on this part. I dont want anyone to show up to my house and slapping cuffs on me for not paying, especially for that amount of time. 2 months delinquent but 5 more months? CMON..
What do you guys think is this pretty standard?
Will
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iwknowledge
Joined: 03 Oct 2006
Posts: 5
Debtcc Points: 177
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| Posted: Thu Oct 05, 2006 9:31 am Subject: |
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Will..
You are right about being wary of this offer. Doesn't sound too kosher to me to let these stay outstanding for that long... Here's some info I got on the web about debt management companies:
| Quote: | Before You Enroll in a Debt Management Plan
From Nance Kelly,
Debt Management Plans (DMP), also known as debt consolidation, are not for everyone. If you have determined that you have a serious debt problem, you may benefit from some outside help in getting your debt paid down. If you decide to enroll in a DMP, do your homework before signing anything. Once you sign up with a DMP, your creditors will close the accounts you are consolidating, and you will not be allowed to sign up for new credit.
Check with the Better Business Bureau
Walk away from companies that have an “unsatisfactory” rating at the BBB. Serious and unresolved complaints will be noted, and you can learn what other names the company operates under so you can look them up as well. Consider whether a new company has enough of a track record for you to get a feel for how they resolve complaints and whether they will pay your creditors on time.
Understand the Fees
Debt consolidation and debt counseling is not free; even the non-profit agencies charge a fee to cover the costs of counseling, setting up an account, and monthly processing. Steer clear of agencies that advertise no up-front fee, but then require you to make a “voluntary” contribution. If the fee is not negotiable, it’s not voluntary. Members of the National Foundation of credit counseling (NFCC) average fees are among the lowest. If you’re paying more than $50 a month, you’re paying too much.
Choose a Company that Can Help With All Your Accounts
Before you sign a contract, make sure the company works with your creditors. Ideally, the agency you choose should work with all of your creditors, not just a few.
Be Wary of Counselors Who Limit the Time Spent to Enroll You
As a general rule, if an agency doesn’t want to spend time with you to make sure the DMP is the best fit for you, they won’t work for your interests in the future either. Be wary of any agencies that promise to enroll you in 30 minutes or less.
Make Sure they Pay When They Say They Will
Even though the agency is making the payments, you are the one obligated to your creditor, so if payments are late, you may end up with penalties and fees added onto your debt. Check your statements, or call your creditors, to ensure your accounts are being paid on time. |
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~A journey of a thousand miles begins with a cash advance~
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erzeke1
Moderator
Joined: 26 Mar 2006
Posts: 1180
Debtcc Points: 16272
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| Posted: Thu Oct 05, 2006 9:55 am Subject: |
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Was the info you were given for a consolidation plan or a debt settlement? From what you've described, it sounds like debt settlement, which would probably reduce your debt by half. Which company did you speak to? You usually don't have enough funds built up in your settlement acct. to start negotiating with creditors until you've been making payments for about 4-5 months, which might be why you were given a timeframe of 5 months. You will not be handcuffed and taken away for not making payments for 5 months!!!
I am currently working with a debt settlement company, and Sept. was the 5th month I haven't made a payment on one of my credit card accts. I just received a letter from the creditor last week telling me to call them to work something out. Obviously they become aware that there is a problem when a few months go by with no payment, and should be more apt to negotiate with a settlement company to settle your accts. and get some money, rather than have you file bankruptcy and get no money.
Per erzeke's post, do check out the company you spoke to on the Better Business Bureau's website. I did this before signing up with the company I'm using.
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Tiffany99
Debt Samaritan
Joined: 15 Jun 2006
Posts: 1064
Debtcc Points: 19129
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| Posted: Thu Oct 05, 2006 12:29 pm Subject: |
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Your settlement company will put proposals to your creditors for consideration. Just think on this, if you are allowed to remain current on your accounts, why will the creditors need to accept your proposal? They will think that you have no problems with your finance. You are trying to avoid paying the full amount. A debt settlement program works the way explained to you by your counselor. You will have to keep your money in a new account opened in the program. The settlement company will be negotiating with the creditors. When they are ready to accept your proposals, money from the new account will be used and the payments will be done. Read this page to know more about this process.
http://www.debtconsolidationcare.com/debt-settlement.html
Research on the company before you sign with them. Ask them about the success they had with the other creditors and if they have dealt with your companies in the past. The contract should be available to you in writing so that you are able to use it in case of a dispute. Go through the terms and conditions carefully. If you want to try other options before this, look into consolidation. Find out how much it will be beneficial if compared with debt settlement. There is a settlement company called Superior debt relief, a favorite of many.
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IncredibleHelp
Joined: 30 Jun 2006
Posts: 500
Debtcc Points: 7670
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| Posted: Thu Oct 05, 2006 12:49 pm Subject: |
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I have spoke to a different company and they said the same thing. Thanks for the comment guys/gals you are all right I have just been delinquent for the first time for 8yrs so it was all nerves rushing in. And yes this is debt settlement. I just havent read the right topics. Thanks a bunch 
Will
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Guest
Debtcc Points: 100
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| Posted: Thu Oct 05, 2006 1:05 pm Subject: |
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Will - I hope you'll consider registering with this site and become a regular poster on the forum. There are a lot of people on here that are going through or have gone through what you are now, so this is a great place for support, advice, info., etc. Also, we'd love for you to post updates of how the debt settlement process goes for you. You might be able to help others on here!
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Tiffany99
Debt Samaritan
Joined: 15 Jun 2006
Posts: 1064
Debtcc Points: 19129
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| Posted: Fri Oct 06, 2006 11:21 am Subject: |
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Im pretty sure im registered, but yes, I will update my progress, I have posted a couple of topics under guest. THanks for the support.
WIll
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iwknowledge
Joined: 03 Oct 2006
Posts: 5
Debtcc Points: 177
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| Posted: Fri Oct 06, 2006 4:44 pm Subject: |
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iwknowledge
I just signed last week with a debt settlement company. As they explained to me they can't negotiate with the cc companies if you are up to date. Makes sense. I hate to do it, but I will follow my debt counselors advice. I also screen my calls now. Good luck & keep posting.
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MaryAnn
Joined: 26 Sep 2006
Posts: 34
Debtcc Points: 1098
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