settlement vs consolidation vs do it my self?

Hi mwells

You can do the negotiations on your own with the credit card companies. You are taking it as your responsibility and pay off the accounts. The credit companies will appreciate your actions and offer you some benefits during the period. However, if you take some professional help, the benefits will be comparatively larger. The consultants are trained enough to do the negotiations suitable to your needs. I may not be able to bag the lowest interest rate what my consultant can work out for me. Besides, they will insist me in sending larger payments which I can't afford in a certain situation. At these situations, you can try a consultant do the negotiations. You can compare the results with the ones you bagged for yourself and make the final decisions.

CDS has given you their quote. You can compare it with the quotes of other companies. Also, you can try your move by contacting the creditors and do the final comparisons.

One more advantage of taking professional help is that all the accounts will be combined together into one monthly payment. You won't have to draw different checks for your creditors on different dates. All of them will be combined together into one payment and your consultant will send it to the respective companies. While you do it on your own, you will have to remember each date set with your creditors and write checks regularly.

But I was told that debt settlement makes your accounts go into closure - that no payments are made until you have the entire amount to pay off the creditor. The guy at creditsolutions told me that it only affects ur credit for the time that ur in the program. I pay them to settle my cards but no payments are made while I'm saving to pay them off. Isn't this bad????

Hi junglediva

The accounts included in the debt management program are closed. This is done so that you don't build any additional debt on it. Once the accounts are paid off, the creditors will again activate them. So, this is good for the success of your program.

In a debt settlement program, the consultant is negotiating with your creditors for a settled amount. This negotiation often takes months to get settled. Meanwhile, the consultant will ask you to send money in a separate account opened by you.

When the creditors finally accept the proposal from the consultant, money deposited in the separate account is used to pay them off in one time. In the settlement program, it is necessary to default for a few months for getting the best results.

At the end, once all the accounts are paid off, the creditors will update them with the bureaus. So, using a settlement program for making the payments will come out to be a success. The marking will have a negative impact in your file for a period of seven years but your prime concern is to get free from the past debts. Isn't it?

yes, we want to get free of past debts but i'm not sure that we want to scar our credit for 7 years. we already own a house and 2 cars so i'm not SUPER worried about the credit history however, I'm just not sure about the best decision. The guy at creditsolutions is telling me that debt consolidation is bad because it shows up as a third party settling your debt. What is your opinion, what is the best way. have you heard about creditsolutions???

I disagree with the person saying debt consolidation is bad while fixing up the credit. In a consolidation program, the accounts are getting paid in anyways. The credit is tarnished when there are no payments made towards the accounts. Besides, you are offered easy monthly installments to pay them off. You also get lower interest rates and most of the financial charges and late fees are waived off.

When your future lenders will view the file, they will see that the past accounts are shown as 'paid in full' or 'paid'. You can see this status even after using a consolidation plan. Whereas, when you use a settlement program and after the accounts are paid off, they are marked as 'settled' in the file. The future lenders get an impression that you have been unable to pay the full amount owed to your creditors and hence, arranged for a settled amount. They will think further if they want to extend new credit to you. It is their money and they want to give it to the person who can pay them back. In general, you will get maximum votes for consolidation in comparison with settlement. But ultimately, your prime motive of becoming debt free is well accomplished by this time.

i see. i will have to keep thinking it over. how do i find a debt consolidation company? i tried to fill out the application form via this website but i'm skeptical about putting in my social and stuff. is there another way?

they all seem the same. counsel for debt solutions (cdsinfo.org) greenpath, bydesign . . . seems like they all do the same thing, but charge different rates -- aaagh!

yeah, i filled out the first page. that was last week. noone has called me yet. what should i do? who should be calling me? from what company??
Thanks SO much for all of ur help!

i've never missed a payment, but am about to. cds told me that consolidating will not look bad, after the third month. . . .

it seems that above, the terms are used interchangeably? are they the same?

NO. I don't know much, but I know the terms are not the same. debt consolidation is through a third party that helps consolidate ur credit. debt settlement is where a third party closes and settles ur accounts for a smaller amount, more like a bankruptcy but not as bad...but still bad for ur credit.

Junglediva, didn't you get a call from any of the consolidation company by now? I hope that someone will call you back. Or you can inquire at the customer care

Hi mwells

Consolidation and settlement is not the same thing. Although, they are different methods of the debt management program but the results are different for each of them. Have a look at the page below:

http://forums.debtcc.com/forums/comparison.html

what about primerica? Are they just one of many? or especially good or bad?

Do it yourself is always good especially when you have the support of such a helpful community. Truly guys, I feel much better after joining this board.

The problem with DIY is that I do not have much time to look after my debts. So I will let it be nurtured by good hands. This site helped me a lot. I will never forget this in my whole life.

As far the contest between consolidation and settlement is concerned, I would say???it depends. It's true that settlement puts a negative mark on your credit report, but there are cases when settlement proves to be good. I would consult a counselor to know the best option for me.

I am in the debt settlement program and they told me that my credit would in deed drop while in the program but would pick back up quickly once leaving. They told me that I will have one credit card still active and going when I am out of the program (which is the main purpose of keeping one) Then he assured me it would be easy to get another credit card. He instructed me to use it like for groceries and to pay off the balance at bill time each month and that would quicly rebuild my credit score to a much greater score than it showed when I entered the program.

He told me to think about it for a minute. When I entered the program we had eight cards and they had been on going and never paid off in the 10 years we have had them. He told me that it will be much greater of a score when they see the 8 cards are gone and that I am paying off the balance. He said the good will out weigh the bad ugly scar.

I hope he is right.

Plus my parents bankrupted in 2000 and it has been only 6 years and they have two new vehicles and a brand new house they bought and their interest is as high as the interest on my house I am paying on now!!!

so, hope this gives you hope.

But I misplaced my paperwork
I set it up with Frances

My name is Kevin Hunt client #275*** and I need to skip the payment for august that would come out of my account on the 1st thanks

Personal info removed for your safety - Mike

Kevin, you need to place your payment request directly to the office of CDS. This website has no connection with CDS. It is a forum discussing about debt related problems of the people.

has anyone ever heard of or used Charles Phelan? he has a program that shows you how to negotiate yourself...

i joined and its been 8 mounths they havent done nothing for me. my credit is no longer great.

:x

A company told me that if I owed $50,000 they would bring it down to $16,000 and then charge me $6,000 and that would bring it up to me owing $22,000. I was told to start a savings account and they would pay off each one at a time when the money was there and that it would take about 3 years. Does this sound right? Also, I've been paying creditors with other credit cards - they said don't do that - so is it better to go into default for the next couple of months and then use consolidation, I mean will it serve me better to be in default. Thanks for your expertise and advice.

ALSO - can a credit card company put a lien on your house if you stop making payments?

We have money going out our accounts every which way (checks, debit, credit, automatic drafts, etc, etc) we really don't know what our cash flow is like. My suggestion is sit down a couple nights and draw out a true cash flow analysis for yourself - how much are you really spending each month. The results you'll find surprising - from here make your decision with regards to settlement or management. Both are good programs but you need to know your situation first. You may find you need to file bankruptcy.

The company you're working with is predicting a 32 cent settlement on all your cards combined and charging you 12% in fees. Fees are fairly consistent in the industry but a 32 cent settlement is a little optimistic; though granted I don't know who your creditors are. Don't forget though - in order for creditors to settle, you have to be delinquent on your accounts; they have no reason to settle if you're paying on time. Hope that helps. Whatever program you decide, robbing peter to pay paul never helps.

Debtors seems eager to deal with me individually. What is the advantage of getting consolidating with the help of CDS?

I recommend that you NOT use John Leaberry.

Why do you not recommend John Leaberry?

Why would any of you pay a debt management company....look on the internet, there are far more complaints the praises for these companies. The FTC(Federal Trade Commision will tell you not to get involved with these companies. The Attorney General's Office has subpoenad 14 of these types of companies to answer to unfair business practices. Believe it or not, there are some debt collectors willing to work with you. The game as changed. Honest people have fallen on hard times, we do recognize that. Your credit history will speak for you....YOU DO NOT NEED A DEBT SETTLEMENT COMPANY!!!!

Quote:

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