Debt Consolidation a SCAM?
How can I get debt consolidation with hospital bills and non credit card debt?
I have a bunch of hospital bills that really cost me in credit scores. I really want to try to consolidate it but I can't find anyone who does debt consolidation without credit card debt. Any suggestions?
Watch the video related to debt consolidation
Most debt consolidation companies do nothing better than simply ruin your fico score in order to settle your debt. If you really want to work with an agency that will help you reduce your debt, contact a company member of “CONSUMER CREDIT COUNSELING SERVICES” (CCCS) More info at: sccrealestateuncensored.com/2008/repair-credit-legally-remove-negative-accounts/ micasamidinero.com/2008/reparo-credito-eliminando-legalmente-cuentas-negativas/
Let’s discus about debt consolidation
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This entry was posted on Tuesday, October 20th, 2009 at 4:46 am and is filed under Debt Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
17 Responses to “Debt Consolidation a SCAM?”
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I will never advise a lay person to watch this video and be misled, she is talking in a particular context; first she should clarify what she is talking about; any good presentation starts with definition of terms and scope of presentation.
Consolidation & settlement are HUGE scams they dont help you and are illegal in 12 states do your research if you dont believe me! I found a great company that doesnt have the typical mainstream scam approach for debt relief but actually wiped out my debts legally and permanently..their website is debtcrisissolutions(dot)com and the girls phone # who helped me be free of debt is 347-492-4014 they are amazing and dont put you payment plans or charge a ton of money at all
You can pretty much do it yourself.
Debt consolidation can be a great way to start tackling your debt – whether it’s just lowering your rates, getting a better loan, or cutting your payments to get debt free faster. Debt consolidation loans consolidates multiple lines into one new loan or debt consolidation program – it typically involves a debt consolidation loan, but could also be referred to as a credit counseling program or other forms of debt resolution that do not involve a new loan. It is important that you know what your options are and what your goals are before choosing a debt consolidation program or company.
Debt consolidation is a solution to stopping your debt from spiraling out of control. Debt consolidation doesn’t reduce your debt; it merely eliminates multiple high interest rates associated with debt from various lenders. A debt consolidation loan is one viable solution to consolidating your debt. In this situation, you basically get a loan to pay off all your various debt or get a better type of loan (changing from an ARM to a Fixed rate loan).
It is better to seek help from any reputed debt relief company to choose the right option matching your financial health. I took help of Bills.Com to consolidate my debts. I have joined their debt relief program one year back and now I am almost debt free.
Stay away from any "debt consolidation" company that promises to cut your debt in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator's fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors have the right to refuse these terms and take you to court.
http://online.wsj.com/article/SB122394458494631223.html
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If all this debt is seriously delinquent and you have money to offer settlements yourself, then you don't need to hire a debt consolidation firm…you can settle directly on your own…The problem here is that they'd probably want a lump sum rather than small payments over several years.
If you don't have any money to settle, then you may want to think about filing for Chapter 7 bankruptcy.
You are correct. And just to add, if one really needs to settle as their only option, it is better to contact the creditor and ask for settlement themselves. No need to work with any settlement company because it won’t do anything good.
You say your have about a decades worth of bills totaling $10,000?
The debt consolidation companies would love to help you, they'd make a killing off of you. Do not go to a debt consolidation place, well unless of course you'd love to get ripped off.
Now, lets talk about what you should do.
When is the last time you paid on these bills? Pull your credit report to see what's actually listed on there Visit the site http://www.annualcreditreport.com. Don't bother signing up for the various ones that give you a free month trial. You'll forget to cancel and they'll start charging you. Also, you most likely don't need to purchase your credit score at this point either.
Pull all 3 reports and review them. Now there's two routes to take.
The first is if you want to pay everything off in full. If you do, just start sending the money for the full balances to the creditors listed. You should start paying off the ones that had recent negative activity or recently went to collections. Why? Because if this process takes you 2 years to pay everything off then other items that are older may fall off your report in those two years. After 7 years from the first negative reporting an item will generally fall off your credit report. This does not mean you don't still owe it, it just means they cannot report it anymore(Again, generally speaking, they go away, you still technically them still but depending on your state they usually can't sue, see http://www.fair-debt-collection.com/SOL-by-State.html for your state's statute of limitations)
The second route is a little different. Generally speaking, creditors will settle for less than you owe. This will be reported on your credit report as paid, but settled for less than the balance. Go through one by one and negotiate with your individual creditors to see what type of settlement they will make. Never agree to pay more than you can and work your way backwards the same way.
Now for the tips, Find out what your state's statute of limitations is. Making a payment to a creditor will essentially reset the timer. So if your statue of limitations is 4 years and you pay on a debt that's 3 years and 6 months old, you've reset the timer. The Statute of Limitations is the time frame a creditor has to sue you in. You don't want to set out on the right track and end up with lawsuit papers.
I work for a non profit consumer credit counseling, so I know about consolidating and settling debt
What she doesn’t mention is that not evryone qualifies for a debt management plan and in some instances settlement and bk are the only option.
STAY AWAY from any "debt consolidation" company that promises to cut your debt in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator's fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors have the right to refuse these terms and take you to court.
http://online.wsj.com/article/SB122394458494631223.html
http://www.youtube.com/watch?v=jS43XFa3KGU
No, it is not always a scam. Debt consolidation and debt elimination are two different animals and should be looked at separately.
Basically, debt consolidation helps you in accumulating your multiple debts into one single debt, lowering your payable amount. The debt consolidation companies do this by negotiating with your creditors.
1. Waives off the interest rate:
Debt consolidation helps you to eliminate or reduce the interest rate. The debt consolidation companies bargain with all your creditors to reduce the interest amount of your debt. This way they help you to lessen your debt amount.
2. Single monthly payment:
If you have multiple debt payments, like credit card bills, utility bills and medical bills and is missing your regular monthly payments, debt consolidation is the best option for you. It saves you from becoming a defaulter. The debt consolidation program allows you to merge all your debts into a single debt and make a single monthly payment for all the debts you owe. The debt consolidation company will deal with all the creditors on your behalf. This would make your handling of debts much simpler.
3. Get rid of creditor calls:
The debt consolidation company not only consolidates your debt payments but also helps you to avoid creditor calls. Whenever you sign up with a debt consolidation company, they assure you to communicate with all your creditors on your behalf. As a result, the creditors stop calling you.
4. Sound credit score:
If you consolidate your debts, you can reduce your outstanding debts in a set out plan. Within a short span the consolidation company helps you to repair your bad credit and get out of all your debts. This way, by reducing your debt burden you can also raise your credit score to some extent.
Debt consolidation is an effective way to get debt relief. Online debt consolidation has become very common these days.
Suze Orman is correct; just that the title of this video is misleading.
Debt consolidation can be a good and bad thing if you get a good debt consolidation program.
You need to find one that you make a monthly payment to and they pay all your credit cards for example lets say I owe $25K for 6 different credit cards and I pay the the debt con. $ 500 per month and they disburse the money to all 5 credit cards (they contact the credit card up front and ask them if a payment of $X is acceptable and they agree) then they pay each monthly. yes the debt cons do charge a monthly fee usually not over $50 per month but you send them or have directly taken from your checking and they pay them,
Beware for the debt cons that state you send them X amount monthly and then put in a saving and when you reach the amount you owe all of them then they will disburse the money. the fee they charge is in the hundreds.
In-Charge is a good debt cons to look into, their monthly fee was $35 and they were great.
Always read the fine print before accepting anything, in fact in-charge you call them or email them and you give them you monthly financial and they will let you know how much you can afford to pay monthly.
Lenders usually only give debt consolidation loans to people with good credit….Even if you qualify, doing debt consolidation can be a dangerous path to go down…It takes extreme discipline to do this…..After their credit cards are paid off from the consolidation loan, to many it's simply too tempting to use all that available credit again on their credit cards…and you can quickly find yourself in twice as much debt as before.
Another option: Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS) in your area. They can negotiate much lower payments and interest rates. They DO NOT negotiate settlements.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don't use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you're enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt.
Interesting point you made, but have you gone through a similar experience and was it more successful than what Suze says here?
Have yo made use of a debt consolidation service? If so how do you find out about it? Did it work for you?
Debt consolidation makes sense if you're in debt because of a temporary situation, such as a period of unemployment that's ended or a medical condition which is now resolved. Be sure that your new interest rate is lower than the old one, otherwise it''ll cost you more than what you're paying now. Be sure, too, that it's not secured by your home. A credit card company can't take your property if you don;t pay, but if you have a secured loan they can.
Above all, be sure you can get by without using credit cards if you're going to consolidate your debt. Too many people use a consolidation loan to pay off their maxed-out cards, then they continue using the cards, and pretty soon they have twice as much debt as they did before.