Debt management/Debt consolidation/Credit counseling

[WebLady]

There is always commercials on TV about this sort of thing. Anyone ever dealt with anything like this? My sister is a couple months late on a few things and is getting alot of harassing calls from bill collectors. She asked me to help look up some info on this sort of thing to see if it could help her.

I was in a mess a few years ago from some issues with my ex husband, but I just filed bankrupty. My sister has filed a couple of times already and now with the new laws she can't do it again.

[HisMuse]

I did ACCC and liked them a lot, I'm looking into refinancing our equity loan. I am really clueless though and if I knew what I was doing I wouldn't be in such hot water right now.

[KMS]

My dad did consolidation through Money Management International. He payed the company a monthly lump sum and they dispursed it to his credit cards every pay period. I think that they worked something out with the credit card companies as far as a lower interest rate, etc. It was kind of hard to have a big $800 bill at the beginning of each month instead of a few bills at different times through the month though. It all worked out well and he payed off his $30,000 debt in a little less than 4 years.

[firespirit]

My brother went through one a few years back (I don't remember which one)
, I think he said his experience was less than positive though. It might have been that he had a really hard time coming up with one large payment...

[TangoWedding]

Be careful with debt consolidation companies...DO YOUR RESEARCH. Many companies do take your money but don't dispense it on time or send lower amounts, etc...and that makes your credit worse.

Many times, it's easier to deal with companies themselves...they don't want you to default, so they'll often work with you.

This does NOT include debt collectors, though. They are a different monster altogether. They LIE LIE LIE...and break more laws than you could ever know. For instance, they canNOT tell anyone that you owe them money. They can't discuss anything about your debt with ANY third party. If they do, they can be liable to pay YOU up to $1000. They can't lie to you about your debt, they can't threaten you or curse at you, they can't add random fees. TONS of stuff.

Check out the 'Fair Debt Collections Practices Act' and the 'Fair Credit Reporting Act' for the law stuff.

I was being contacted by a debt collector and they sent me a document that sorta looked like they were suing me when they weren't. Totally illegal. I took THEM to court (I filed pro se, which means I acted as my own attorney) and I ended up getting about $5000 from them...plus they had to dismiss my debt. :flopsy:

Anyway - that went way off topic. My point was to make sure to do your research no matter what part of debt repayment/bankruptcy/consolidation/credit reporting you're looking into. There's lot you can do that you prolly don't know about.

Check out sites like www.creditinfocenter.com and www.creditboards.com and start asking questions. You'll find anything you can imagine on there.

[SerendipityCrafts]

Be careful with debt consolidation companies...DO YOUR RESEARCH. Many companies do take your money but don't dispense it on time or send lower amounts, etc...and that makes your credit worse.

Many times, it's easier to deal with companies themselves...they don't want you to default, so they'll often work with you.

I have heard this too. It takes some pre-work (figuring out a reasonable budget) but if she called each company that she owes, and explained the situation - ie I am in arrears but I can only pay you this much per month. Would it be possible to work out a payment plan so that I can pay off this debt? If not, I am also considering bankruptcy or consolidation.

If a person does file or works with a debt consolidation co., the company owed only gets a small portion of what is due to them. I head that they would much rather deal directly. At least this way they have a chance of seeing all of their money repaid - even if it does take longer.

Most people wait too long though (due to fear, procrastination, avoidence) .... the debt could have already been turned over to a third company/collection agency and if this is the case, they won't give a hoot about her "situation". The original company is out of the picture because they have "sold" the debt for less than what was owed, to a third company. The collection agency's job now is to scare the person into paying the full amount, right away. This is how they make their money - ie they get the difference between what they "bought" the debt for and what they manage to collect.

[TangoWedding]

And the worst part of collectors buying a charged off debt is that they pay pennies on the dollar for it. For example, if you owe $3,000 on a debt, a junk debt buyer will probably pay the original creditor close to $100 for it...and then turn around and try to collect the entire $3,000 plus fees from you. It's really a crock.

Oh. And always remember a statute of limitations applies to all your debts. That means that, after a certain amount of time, you don't legally have to pay those debts anymore. It depends on what state your in and what KIND of debt it is (credit card (open account) vs. car loan (installment account), for example), but most are around 3-5 years.

If someone is trying to collect a debt that's past statute, you can tell them to buzz off and never call you again. Even if they take you to court and try to sue you, you have what's called an affirmative defense....if you answer and tell the judge your defense, the case has to be dropped.

Again...off topic. It's just something I'm passionate about. :upsidown:

[WBandMe]

A couple months ago my mom got a call saying they were collecting from something never paid for in a Spiegel's catalog in like, 1999 or something. I don't think we've ever bought anything from there, but that aside, my mom brought up the statute of limitations with the lady and basically asked, "Why would I bother paying now?" The woman was like, "Well, technically we can't do anything about it, but we'd like you to pay..." Uh huh. She got a big ol' buzz off! :)