Consumer Credit Counseling and Bankruptcy

I have never heard of that. For something to be reported as being included in a bankruptcy, when it really has not, would be inaccurate and against the FCRA.

I know there is a comment creditors can use on your report that says "managed by financial counseling." But that is very different than saying bankruptcy.

People often have misconceptions about Credit Counseling/Debt Consolidation. To know how it affects your credit, you should understand the credit scoring system. Jessi has made a pr????cis, you can go through it:

http://www.debtconsolidationcare.com/forums/understand-fico.html

debt settlement is a bit bitter, but all of these are better than bankruptcy. That????????s what I feel.

I am using a debt conolidation co and it doens't show up as a bankruptcy, just that I am using an outside company to help with bill pay

It does show that you are in conumer counseling but not bankruptcy. Bankruptcy is a federal thing. KYSIDE38

If I remember correctly, Dave Ramsey warns people that some of the debt consolidation companies, the crooks, put you in bankruptcy but that there are alot of good Consumer credit counseling services out there that arnt crooks and will realy help you get things in order.

CCCS agreements should never show up on a credit report as a BK. It isn't a BK.

However there are some folks who say that working through a CCCS can trash your credit worse than a BK ever could. It's a case-by-case basis though and can depend on many factors.

Some folks benefit from CCCS, while others get put into a worse situation.

Just my $0.02

MY DAD is debt free!

...and has been Before Dave Ramsey, but listens religiously.
needless to say, i got a 4-hour phone conversation once i sad i was using a debt consolidation company...

Bottom line is this- Dave's Program ONLY works if you are making MORE than you SPEND.
Unfortunately, our income doesn't cover min monthly payments... and we have $38,000 in credit card debt.

so there's no was to take "baby steps" as Dave states=

...Monthly Budget! (ok, ours is NEGATIVE $600+! Now What?)

...Get a $1000 Emergency Fund!
(if i could SAVE $1,000 i wouldn't NEED counseling in the first place!)

after arguing about "Do it Yourself" vs. "Letting someone who knows what they're doing"
he agreed to this... "Dave's Ways are not for everyone, but work for some people who are able to increase their income fast"

being on a budget that runs negative calls for DRASTIC measures...
our options were
1) Bankruptcy AGAIN! (first time was for medical- i was out of work after a kid ran threw a red light and almost killed me!)
2) Debt Relief- (First No pay -while we save up- Then to Slow Pay and settlements)

The BIGGEST part of Dave's OR ANYONES Program is Budget!
(if you can't get on a budget, you'll never actually stay ahead of DEBT!)
-my problem is this- we read Daves books a few years ago, and did a budget...
it worked for a while, but then we got lazy... after we stopped doing budgets, we started gaining debt again- (Really FAST after our 3rd kid was born!)

Live and learn! (Dave's cool by me, but not FOR me... YET!) :wink:

I like Dave Ramsey and Suze Orman - I take a little of both worlds. That is a tough situation when your budget is so far off from you income. What Dave says though is if you can't afford your house then you need to downgrade, if you can't afford your car, downgrade. I think that is easy in theory but something else in practice.

As far as getting out of debt, I guess you need to look at your own personal situation. While some people would yell at you for thinking of filing bankrupcy I say if that is what is going to make your life better and that is the best thing for YOU than you need to do what is best for you. Not every solution is going to work for everybody.

And you gave yourself the best advice - Live and Learn

Quote:

mariacide, it has been over 2 years since you last posted on this page. It sounds like you are just like my family & i. how is the debt help coming along? who are you using & are you happy with them.

While it may not affect your credit score or show up as a bankruptcy, the fact is that most lenders will treat your "debt counseling" as if it were a bankruptcy. You most probably will not be able to get a sizable loan (home, car, etc...) if you subscribe to a "debt counseling" program.