consolidations

[dodaac07]

Can anyone advise if using a debt consolidator is a good idea?  and if so, are there any legit companies to go through?  I have my hands around paying off my huge debt that has built for the past 10 years, including both mine and my partners... but even at the semi-fast rate we are going at, it will take over 5 years to pay it all down.  I read an article in MNBC money matters and it stated that if you can't pay off your debt in less than 5 years than there is trouble!  We make great money combined but we can't enjoy it because of previous mistakes.  I NEED HELP.  So back to my first question, is it smart to use debt consolidation?

[haulingthescoreup]

Debt management programs are legit. They should be able to work out better terms for you with lenders.

Debt consolidation/ negotiation programs are considered a form of credit repair, and therefore off-limits here on the forums. And we've had several members who have used them, found their credit ruined (as the DNP refuses to pay anyone without a deal), and have lost a ton of money.

The terminology is fuzzy, and sometimes one sort of program is called by the other's name.

If you're really talking debt consolidation/ negotiating, we can't keep going discussing it here, but you should read this online article by the FTC discussing debt management in general. The programs are explored more towards the bottom:

Knee-Deep in Debt (FTC article)

[Anonymous]

Before you get too far, have you call to ask for lower interest rates? Assuming it is credit card debt..

[dodaac07]

I am sorry, I was not sure or knowledgable about the different terminology or different programs.  I said debt consolidation simply because it was the only one I kept hearing about.  I do not need a credit repair program, just something to help me get out of debt.  I am very focused on paying everything down real fast.  I feel that I have a reachable goal set that can clean out everything in about 5 years, but I am not happy with trying to stay focused for a whole 5 years.  I think I was just hoping for ideas on how to get everything paid off faster.  I read that article you gave me, and it was very useful.  It also gave me some knowledge on all the different options.  Thanks

[dodaac07]

Yes I am talking about credit cards, mostly.  I called them all about a year ago and got denied for any changes to the interest.  In fact I was very uncomfortable asking.  I think I was intimidated and backed down way too easy.  I can't say, please lower it or I will take my money elsewhere, because my debt is too high and I think they will read my bluff.  If you have a great way of getting cc companies to lower my interest rates, PLEASE let me know.

[fishbjc]

Using a Credit Counseling Service can be a great tool to help yourself, but rules must be followed.

Usually the term is for 60 months.  During that time, your credit cards, will be locked.  You will not be able to use the cards in the program.  You usually are not allowed to open any cards without the consent of the creditor.  I do know of one person in a CCS program who was allowed to open a gas card because it was a work requirement.

My cc and signature loan were both with Bank of America.  They reduced the interest on the cc to 4% and the signature loan to 13%.  The payment to my CCS is auto-debited.  It is your responsibility to review each statement from your creditors to make sure each agreed payment is made on time and for the correct amount.

Fico doesn't ding you for being in a program such as this.  I can pm you with some more info if you like.  You can call a counselor, get it all laid out and go from there.  Your scores will improve and you'll sleep better at night.  Good luck.

[marty56]

I used a Debt Management Program and had great results.  It took me 4.5 years to complete.  Most CCCs will close the accounts so you would take a minor score hit but util would be the primary thing dragging your score down anyway so I dont feel it is a factor.  If you can, try to leave your oldest or best account out if the program.

In terms of any lasting effects of being in a DMP I would say there is none since after I finished he program I was able to get a prime Viosa card and a prime rate asuto loan.  My scores are what you see them as and if I didnt have the 120 day late, my scores would probably all be over 800 less then a year after being in the program.

Things to be carefull about while in DMP:

1.  Dont apply for any new credit that goes double if you have a BofA card.

2.  You must monitor the credit statments and if it loos like the DMP will pay a CCC late, you must make the payment on your own.  I had to do that twice with discover.

3.  The DMP does not know what your current accont balances are so you could owe more then the DMP things you do.  The last thing you want is a 30 day late at the end of DMP because you owed $1.

DMP saved me and it could work for you.  If you like I can send you a PM about the company I used.

[marty56]

I forgot to add that DMP only works with credit card debt.  Secured loana, medical, studnt loans are off limits to them.

[marty56]

Depbt negotiation/settlement programs are evil.  They will damage your credit and some even rip you off.  Stay away.

Message Edited by marty56 on 09-24-2008 02:42 AM

[fishbjc]

Originally BofA offered me a *settlement* and I declined their offer.  I felt it was better to pay the debt off.  BofA allows me to make additional payments to them, thus shrinking my balance a bit faster.  I update my balances quarterly with my CCCS.