Should I use a Credit Counseling Service

[Anonymous]

My husband was diagnosed with cancer at age 35.  I was not working at the time.  Needless to say, in 2 years we have racked up $70,000 in CC debt.  We had to pay extra medical copays and live on CC's.  It is driving me insane to not be able to pay this off.  Weare now to the point we can't even make the minimum payments on some cards.  Is it better for me to take one for the team and not pay the one's that are in my name...thus keeping his credit in good standing since he has the full time job.  Or should we go to a debt counseling service to lower all the payments and stay current?  I have tried calling all debtors and explaining the situation...all they do is increase our interest rate.  I am at a loss as  to what to do next.  If I have dellinquiences on my account, how lon does it take to repair that? 

Please help!

Angie B

[SmartCookie]

I'm very sorry to hear about your hubby and hope he is doing well. 

I think it would be something to consider and there are a few people here who have done so or are doing so.  Hopefully they will tell you about their experiences and give their opinions.  

I hate to advocate considering bankruptcy, which is odd as my DH is a BK atty (we have VERY different views on BK and debt) and I have seen how people can abuse and misuse it...  but in your situation I would really suggest looking into it.  There is a BK board here BTW.

[Anonymous]

WOW-
that is a really rough story- your min payments have to be as much as my mortgage payment.

You need to do something quick or it is just going to get worse- (late fees,over limit fees) and more damage to your CR.

Sounds like CCS/DMC or BK are going to be the only options here.

Have you spoken to supervisors at the lenders?

[PayYouNever]

A DMP is helpful is rescheduling your payments and reducing the interest to APRs around 7 to 9%... which is what you get if your score is close to 700 or more. However, you lose those accounts. They get a "closed by consumer's request" marking on you CR, and then you just have the CCs that you haven't put into the program. BK might not be a bad option.

[smallfry]

Sorry about your husband and I hope he has beaten it. Do not limit yourself to just the BK board on this site. Google creditboards. Good luck. You might be able to work with the creditors usually a counseling service is the worst way to go. Read here and any other BK board you can find. In order for the issuers to reduce your rates and place you on a hardship plan you have to go late. Investigate this first but I would avoid the counseling services.

[scramblingin2007]

Hi blissful, I personally would file BK. I think in your situation it is more important putting food on the table and using $ to pay for monthly expenses rather than chip away at a 70k debt. After 10 years you can start a clean slate with your credit and rebuild from there but right now is more important! Good luck and keep your chin up!

[Anonymous]

BK has been mentioned here a few times.  While I somewhat agree with this options, keep in mind that if your husband still has hospital visits to attend, after you file, those will soon add up, too.  You can only file bk once every 7 years (unless they changed it) and it will stay on your record for 10 years.

[demi]

If you do go to a debt management plan, check out takechargeamerica.  Their website is www.takechargeamerica.org (or perhaps com, can't remember).  They have done wonders for me, I had over 45k, have  paid almost all of it off, 10 payments left.  I ended up paying much less per month then I was.  They charge 35 a month, which is basically a late charge on a credit card.  You will have to give up all credit cards...I think they allow you to get loans if you need them for car, etc. While I had crazy charging habits, I could keep up until I started having medical on top of it, 2 major back surgeries, plus 6 other, not to count all the treatments, in about a 8 year period.  They teach you to budget, I think they are great.  I believe they were formally cccs.

[Anonymous]

I'm sorry to hear about your husband, hope he's doing better now.

Perhaps calling up the creditors, starting with the ones you can't make min's on and letting them know your hardship but that you'd like to avoid credit counseling, what options are available?

I've heard some creditors do want to avoid their customers going into credit counseling.

If you're determined to stay afloat, you need positive cashflow or at least some breathing room. Is there a 401K that you can borrow against? Bring in a border like a college student who's only there 9 out of 12 months, offer a meal once a week or so? Sell items (garage sale, eBay) that you can replace with something better anyway in a few years? Camera, video camera, etc. The holiday season is around the corner, is it possible to get a part-time additional job? Maybe a local postal station is looking for night shift sorters?

Increasing cashflow is difficult, which is why I suggest ideas like seasonal work or a college student border.

[Anonymous]

Thanks for the advice.  If you don't mind my asking, how long did it take you to pay back the 35K?  Have you had any problems with getting car/home loan since using that service?  Just wondering if it states that you went to debt counseling on the credit report.  Thank you, this helps to talk to someone who has done it.