M. asks from Cleveland, OH on February 01, 2008
Need a Reputable Debt Consolidation Service/company
I was wondering if anyone has ever used a debt consolidation service/company. I recently split from my boyfriend of 5.5 years. We have a 3 yr old son together. It was more my decision to leave and I had to purchase almost everything I needed to live on my own. Most things we had we purchased together over the years and I decided to leave everything with him. Needless to say, I am up to my elbows in debt now. It's not a great deal of money, but I want to nip it in the bud now before it gets worse. I have a good job, but I seem to be living paycheck-to-paycheck for the first time ever. Some of my credit cards have high interest rates from some mistakes I've made. I would really like to get out of debt sooner than later and without spending a fortune in interest. Has anyone ever done this before? Any suggestions or references would be greatly appreciated. Thanks to everyone!
R.W. answers from Cleveland on February 02, 2008
About 4 years ago we used CCCS, (Consumer Counseling Creditor Service I think). The website is www.moneymanagement.org.
They treated us very well, worked out great rates with almost every credit card we owed on, and the monthly rate was decent. You will pay a monthly fee, but IT IS negotiable, so negotiate it. Good luck!
S.C. answers from Columbus on February 01, 2008
You should read "Total Money Makeover" by Dave Ramsey!!! I couldn't put it down amd he is awesome when it comes to helping people get out of debt in ways that truly work!
A.B. answers from Cleveland on February 02, 2008
I used to work in a collections department and want to warn you that alot of companies will hold your money you pay them and make settlements on your accounts-which is not that much better than charging them off.
My husband is employeed by one of the largest banks and they refer people to Take Charge America (they are non profit). You can also check the BBB for reputations. He also told me that just going with a debt will affect your credit and you will not be able to use any of your credit accounts. You can call and ask to work on a "fixed payment program" and they should be willing to reduce your interest rates and possibly cut your payments.
You could also ask for a "consolidation loan" I know that Citi offers them at a better rate than others...and wont harm your credit...
He also says going with a debt reduction company should be a last resort before bankruptcy.
1 mom found this helpful
A.P. answers from Dayton on February 02, 2008
You need to do some serious research on debt consolidations. Some lenders treat DC like they do bankruptcy. It is tricky. You usually end up w/ one huge loan @ non-prime rate. I have heard a lot of bad things.
There are ways to reduce cc debt w/o spending more. One is paying every 2 weeks. It cuts the interest considerably. Be sure you are current- then send 1/2 minimum payment 2 wks early and the rest on time. It really works!
Clark Howard is a great financial adviser. He has a radio show and several books. Go to the library- where things are free.
Good Luck! Don't give up. Your young and a MOM! Your future looks bright!!
1 mom found this helpful
B.R. answers from Columbus on February 01, 2008
The debt consolidation agencies don't do or guarantee anything for you. You can do it on your own. They will pressure you into paying them thirty or forty dollars a month! You don't get any benefits from the credit card companies until several months have passed by. If you work with the credit card companies, just get everything in writing. Either way, you still ruin your credit, so don't let those agencies say they protect your credit. Also, it takes so long, SO VERY LONG, for your payment to the agency to get your credit card payment to the company! My advice is to stay away from all of them. Don't be fooled by "non profit". You can still pay everyone in your company whatever you want and still be non-profit if there's no money left over as profit. Those high level execs can make a lot of money. Good luck! You will get through it.
K.H. answers from Cincinnati on February 02, 2008
Most such companies will do you a disservice - for what you can do yourself. You can work you own debt snowball by following simple principles outlined by Dave Ramsey in his Total Money Makeover book. He can be heard daily on local radio from 4 PM - 7 PM on 1050 AM WCVX (he provides financial advice to callers from across the country). His books are available at your local library ( another is Financial Peace). He's been through serious debt and has taught many folks how to work their way out of it and get control of there money habits to have financial peace. You will not be mislead - this is not a freak financial guru. He is painfully honest and you must be willing to change your habits. I wish you well!
E.N. answers from Toledo on February 02, 2008
M.N. answers from Columbus on February 02, 2008
My husband and I are trying to get out of debt also - we are following The Total Money Makeover by Dave Ramsey (www.daveramsey.com). It's a wonderful plan that teaches you how to get out of debt on your own and then start amassing a savings so that you never have to worry about creating/needing debt again. By following the plan we should be out of debt (except for our house) by March of 2009 and that's including both of our vehicles.
I would highly recommend this plan - Dave Ramsey's motto is "By living like no one else you can live like no one else".
J.O. answers from Cleveland on February 01, 2008
Hi I to have recently been put in the same situation.
I call a dept consolidtion place, only to find out later I could of done the same thing on my own.
They also will tell you if you don't stay with them that you will no longer be able to get help from any other dept place in the next five years. (I should of known better but I was desprate at the time )
You can call the credit card compandies and ask them to please lower your intrest rate and close your card and talk to them openly about trying to pay the bills off. and let them know your situation if they can help you from filing bankrupcy they are willing to help.
This is all this place did for me but they are also charging me $30.00 per month to do this it is just one more bill added to my growing dept. good luck hope the future seems brighter.
M.W. answers from Cleveland on February 02, 2008
I would agree with the person talking about Dave Ramsey. He is really great. We have used him for several years now and are getting pretty far toward our final goal even though we are 26 and 25. I believe because you are a single mom you might be able to get his program for cheaper or free. You might want to call him or write him. The info is at www.daveramsey.com It's a great program.
Stay away from debt consolidation programs. MOST of them don't actually pay your debt off and the ones that do charge you 50 or more a month to do what you can do for yourself for free. Call your credit cards and get them to lower your interest rates. Of course there are other things besides just getting rid of debt. Including saving for college and retirement. Dave Ramsey will lead you through it step by step. :)