Any Experience with Debt Settlement Companies?

Updated on June 27, 2009
L.R. asks from Redondo Beach, CA
24 answers

I'm looking for success (or horror) stories that might help me properly consider whether this is a viable option for me. Any experiences or company recommendations would be greatly appreciated. Any advice on Debt Counseling vs. Debt Settlement?

Thanks Ladies!

4 moms found this helpful

What can I do next?

  • Add yourAnswer own comment
  • Ask your own question Add Question
  • Join the Mamapedia community Mamapedia
  • as inappropriate
  • this with your friends

So What Happened?

Thank you so much to everyone who responded. I really appreciate you sharing your personal stories with me! We have decided against Debt Settlement. I have contacted one of Debt Counseling services that was recommended and will decide from there whether or not we need to speak with a bankruptcy attorney. Again, thank you so much!
L.

Featured Answers

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

L.L.

answers from Los Angeles on

What ever you do do not join Debt relif of america!! It is a horror show. I have been in this program for two years and my debt has doubled and i am being sued by two credit cards :( They kept saying there were taking care of things but in fact they were collecting my fees and doing nothing!! Stay away from them.. Good luck!!

1 mom found this helpful
Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

S.F.

answers from Santa Barbara on

Hi L.,
In 2000, I used Consumer Credit Counseling Services (CCCS). It took me two years to pay off my credit cards at a much reduced interest rate. I felt that this organization was very good and I have not had credit card debt ever since. It feels so good not to have that hanging over you! (Although I do remember it being difficult to travel/reserve hotels,etc. without a credit card.)
S.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

F.W.

answers from San Diego on

Hi L.,

This guy helps tremendously! I highly recommend him..

Rob Nagpaul
[email protected]____.com
866-720-7474 ext 104

Good luck!!
F. :)

More Answers

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

C.J.

answers from Los Angeles on

Hi L.,

I am going through Consumer Debt Solutions. I started with them in 2006 but my fist payment was 02-07. They are very helpful and I am almost done with them. I should be finish by December of this year or January 2010. The number is 800-827-0119. I had 7 credit cards that I put on their program and they have paid off 4 so now I only have three more to go. I pay 290.00 on the 15th of every month. Your amount might be different because it depends on how much you put on the program and the monthly payments of your credit cards. I hope it works out for you. I think they are a really good company.

1 mom found this helpful
Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

K.B.

answers from Los Angeles on

I had a very good experience with Debt Free. Their # is 1-800-997-2304

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

L.R.

answers from Los Angeles on

L. R.,
I work as a volunteer training people who are unemployed on how to improve their interviewing skills. In addition, I collect information to pass on to people who are having financial difficulty in these different and challenging times. A volunteer colleague, Jeff W., said that he used Orange County Credit Counselors in Mission Viejo. He said they negotiated and bundled his debt into one payment. He was very pleased. He valued the honesty and integrity. He felt he could trust them.
Another L. R., grandmother of two little girls

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

P.E.

answers from Los Angeles on

Before you decide to enter a debt settlement program, I HIGHLY recommend that you meet with a lawyer who specializes in bankruptcy. Most such lawyers can give you a free meeting to discuss your situation and options. The problem with debt settlement companies is that you really do not have any legal protections. Their agreements with your creditors are non-binding meaning you you pay throught your whole settlement program and then the credit card company could come back and demand more money. I am happy to give a referal to a great bankruptcy attorney in Ornage County if desired.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

P.S.

answers from Las Vegas on

A little late in response. We used Consumer Credit Counceling, I think it's called something else now. It took us 4 years to pay off the debt of about $34k. They saved us money and it was just one montly payment and they dispersed the money to the creditors. It was nice seeing the balance go down every month and not have to worry about the interest. The last one that we paid off was a Citibank card, only because at the time Citibank didn't want to budge on the payment.

Good luck and make sure you research the company first.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

A.H.

answers from San Diego on

We use springboard a nonprofit org. You can check them out at www.springboard.org So far so good with them.

We also had friend tell us he called his credit card co. and they canceled the card dropped the interest to zero as long as he made payments. Worth a try.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

T.B.

answers from Los Angeles on

Crown Financial is amazing!

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

S.M.

answers from San Diego on

I used to be a financial counselor with Navy-Marine Corps Relief Society in San Diego. We only recommended one credit counseling service and that one was Consumer Credit Counselors. I personally have heard lots of horror stories about many of the other debt counselors. CCC will look at your situation and will recommend you see an attorney about bankruptcy if they do not feel they can help you. They do charge a fee but I understand it is much more resonable than other companies.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

L.S.

answers from Los Angeles on

Hi L.,

Where are you located? My husband and I teach families how to make and save money (get out of debt, save for retirement, children's education, etc.). Our office is located in Torrance, CA. When we got married, we owed a little over 60K in debt, and paid it all off in 20 months. If you are interested in scheduling an appointment, give me a call at ###-###-####.

L. Stroud

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

D.H.

answers from Los Angeles on

Hi L., The responsible thing to do immediately is to stop buying anything other than food and medications. Take the credit cards out of your and your husband's wallet now. Reduce your extras: cable, movies, nail salons, reduce cell phone plans if you can, turn off the lights, and get serious on paying your bills on time and as much as you can. Look for Dave Ramsey's book for getting out of debt, remember the library? No more book clubs, fitness clubs or new clothes, the closet is full right? Start cooking your food from scratch and eat more vegetables, less junk food.
Then, talk to some debt consolidation firms and get educated. Then you can make your own decisions.
Come on now...you can do it!!!! Deb

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

K.K.

answers from San Diego on

Several years ago, my husband and I were doing just fine with our debt. Then we got custody of our then 5 month old grandson. With the added responsibility and financial strain of an unexpected child, we went to a debt settlement company. All I can say is that when we walked out of there, it was like taking a two ton truck off of our shoulders. They worked with the companies we owed money to and we were able to pay off all of our debt.
Good luck with this situation, there is really a light at the end of the tunnel.
K. K.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

J.D.

answers from Los Angeles on

You might try googling debtors anonymous. It's a 12 step program similar and I'm sure they'd be a great resource. Good luck.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

D.H.

answers from Los Angeles on

Hello L.,
My husband and I just finished with debt settlement. It was a good experience. We used Credit Answers. The most important thing you look at is if the company has been established longer than 10 years. No upstarts trying to make a deal, they may take your money and run.
Our best deal was .30 on the dollar for one of our cards. You still have to pay, but it is so minimal compared to the overall debt. This worked well for us. Unfortunately it does ding your credit, but with this company you can choose which cards you want to pay through them and which ones you want to keep. Your other cards (that you keep)still have the option of closing your account or dropping your credit limit. We didn't care about the credit limit being dropped that is one of the things that got us into trouble, too high of a spending limit. We had everything paid off quickly and there are many plans they can work out with you. Hope this information helps. You can email me back if you need more information. Good luck, being debt free has made us manage our money better and we are much smarter because of it.
~~D.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

J.K.

answers from Las Vegas on

Hi L.,

I recommend staying away from Debt Settlement companies. You don't need them, they have extra cost and can still ruin your credit.

My husband and I found Dave Ramsey! I would highly recommend watching him on Fox Business news, on the radio or go to the website. He has a great easy to read book on getting out of debt. "The Total Money Makeover" changed our lives. It's not easy- but you can do it and scream I'm debt freeeeee once you set a goal. I am a spender and by no means found it easy to get on track- so many people that help with finances are confusing to me. Dave methods are simple, tried and true.

I hope you check it out and find out for yourself!

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

N.H.

answers from San Luis Obispo on

I was in too much debt for a single person. I felt awful when I got married knowing I brought so much debt to our union. My husband and I worked on the debt the best we could, but found the best advice came from an accountant whose suggestions are very much like Dave Ramsey's. We went to work and are now under control. However, I still have occaisional challenges controlling my spending so I personally often visit www.daveramsey.com for encouragement. Whichever way you go, I sincerely wish you all the best!

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

J.H.

answers from Los Angeles on

We tried Debt Settlement and got taken for a lot of money. We would pay them monthly and they were suppose to be negotiating with the credit card companies and then paying them out of our account that we had been paying into. In the long run they never did any negotiating, the credit card companies kept harrassing us despite the fact that they told us the calls would stop, and we ended up needing to file Ch 7 Bankruptcy because now we were even farther in debt. Worse decision in our lives.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

J.D.

answers from San Diego on

If the dwebt is on its way to 7 years you may want to just let i run out at this point. But any othere debt Call the companies and tell them you are willing to settle the debt for a set amount Like if you owe $1000 for something say are have $300 to settle and keep going with negotiations until you all come to an aggreement.

I settled with a cingular bill that they wanted $9000 for a 2 month phone bill from 5 years ago I settled for $500, yes $500 dollars. so its possible. I was 18 and young and didn't realize how cell phones really worked and now at 25 I know better and make sure I am up on all my bills.
Good luck and negotiate like crazy and don't take the first settlement you get offered.

ps Do the negotiating yourself so you know for sure what is happening. Set aside an hour a day to make calls for one bill. Call the company and see what they say. most will want to have a payment plan which if the bill is less than $500 then a payment plan may be better. but Make sure they say they will send settlement offers in writing. Never send them a personal check always get money orders to send them money. Never tell them you have a bank account. Also ask them to send you copies of original bills. If they say they can't or won' or don't have them then tell them that you won't be willing to negotiate until they can show you and prove to you that you owe that money.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

R.J.

answers from San Diego on

ABSOLUTELY do debt counseling. There are the non profit, govt organizations...and then also online "certification classes". (These are required before anyone declares bankruptcy, btw.

Oddly enough, it's USUALLY better to file for Ch13 Bankruptcy, than to consolidate. Here's why:

CH13 IS consolidating...and it stays on your record for the same or less time (ironically)...but you're protected under the law. Here's how it works:

All of your debts (minus federal student loans and taxes) are tallied up. Then they're fed into a formula. That formula takes your income and subtracts necesseties (like rent/mort, bills -electricity, H20, Insurance, heat, medical, etc...all the daily living bills we all have,(up until here, it's identical to what consolidating companies do) THEN it subtracts a certain amount for food, clothing, school, childcare, entertainment, IRA's, Life insurance, college funds, etc. Say what's left over is 200 dollars. You'd pay that 200 dollars left over money a month for 5 years. That means that you'd be responsible for paying back 12,000 dollars...regardless of whether your debtload is 15,000 or 50,000.

In addition, if you lose your job, go on FMLA, for whatever reason...your income stops...so do your payments...until your income returns. Say you were laid off for three months. Those 3 months just get added onto the time you have to pay. You aren't "late" and have to "catch up", like with regular debt. If you have to take a lower paying job, you payments decrease. If you take a higher paying job your payments increase (out of deb faster). The BIG difference, is that you pay what you can afford, you're alloted "smart money" (insurance, medical, school, savings, entertainment) as opposed to just the bare necessities, and that you're protected by the law...both against your former creditors and incase of temporary (or permanent) inability to pay.

With debt consolidation, the company does a "deal" with your creditors. You still owe the same...but you typically aren't paying interest...so you're chunking away at the principle. The problem is that if say you owe 30k...you have 5 years to pay it off. That equals 500 a month. Regardless of what your income is, you pay 500. If you only have 600 left over after paying your rent/mort...that means you have 100 a month to buy food, pay your bills, go to the doctor, etc. Impossible right? Doesn't matter. They take your debt load, divide by 5, and divide by 12. You ALSO aren't protected by law...if you miss a payment for any reason you get booted out of the program (and aren't allowed back in). As well, all of your debts show on your report as defaulted or over 120 days late UNTIL they've been paid off in full. The last day you pay them off...they're adjusted to "paid". So you have 6 years and 11 months until all of the bad debt comes off of your report...and that's after you've just spent 5 years paying it off. AKA 10 years and 11 months. Ch13 meanwhile stays on your report for varying amounts of time...the longest being 10 years...the average being 7...and in a few cases I know of, only 3 years. Even the LONGEST time is better then the average of consolidation.

NOW....CH13 isn't *always* better then consolidation (although safer, in case something happens to your income level). But it usually is. To know, you'd need to do debt counseling & talk to an attorney about your specific case.

There's also CH7, which is the "wipe the slate clean" and start over form of bankruptcy. This is NOT for people who want to keep their house or any other assets. (Ch13 you can "exclude" your house, car, or other specific debts that you want to continue paying off). Ch.7 liquidates all or most of your assets. And it DOES stay on your record for 10 years.

Anyhow....the long and short is this: DO credit counseling, and DO talk with a good attorney.

Good Luck!!!

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

D.S.

answers from Los Angeles on

I've negotiated for myself recently. Took a lot of phone calls and tenacity. My only suggestion would be, there are non-profits that do it for free - don't pay a company to do it for you. If your mortgage is something you need negotiated, go to the Department of Housing & Urban Development. They have organizations that are free also.

Smallavatar-fefd015f3e6a23a79637b7ec8e9ddaa6

E.G.

answers from Honolulu on

Hi L.,
I saw your post asking for information on Debt settlement. Let me share with you our company website that you can read and get more information about what we do. We operate in all 50 states and use a law firm. Our attorney works for you to reduce your debt down to 40-60% which helps you to get back on track. A payment plan is designed to help you to better manage finances, between 3-5yrs. At the end of that time, you will be debt free. Debts that be on this program are unsecured (credit cards and unsecured loans).
Call me if you would like to know more. Read the website then call me on the phone.
Here is our website: www.hawaiiloanhelp.com
Ellie Giles
###-###-####
or email: [email protected]____.com

For Updates and Special Promotions
Follow Us

Related Questions

Related Searches