Re: credit card modification program

Anonymous · ‎08-16-2019

I am seriously considering doing this, and would love to here from anyone who has actually gone through with it.

My situation: perfect credit report except for super high credit card debt. No late pays, negative records, etc., just like 60k in total debt. Because of this, my wife and I have watched our credit scores drop from the mid/upper 700's down to 678 at last check. I am able to keep up with payments but just barely and see no prospect of paying these down the 'normal' way.

What I know: I have been in contact with "financesolutions". I understand that in this program I stop paying and I simply pay them. They in turn negotiate a settlement. According to their offer, they seem to guarantee that my total payments will be equal to the current debt - and their fees come out of that. So for example if I have them handle $40K in debt, and their fees ad up to $15Km that means they are getting the creditors to accept only a percentage (62% in this example) of the actual debt.

I have read through the complaints the BBB has on this company, and honestly, it's not too bad. They have an A+ rating because they have been in business a while and do respond to complaints when they are filed. Most of the complaints seemed to be from people who didn't realize there would be fees involved. They have told me my credit would take a hit (obviously) but were unable to tell me how this shows up on my credit report.

The questions I have are:

1. Once you sign up, how long is the negotiation period before they come to terms with the creditors?

2. Has anyone done this and can tell me how it showed up, how badly it impacted your credit, and for how long?

3. I had never heard of this concept until recently, but suddenly I am recieving mailers and even hearing radio ads for other companies in the same business. Any recommedations either good or bad on any of these companies?

4. How do the creditors you don't list react when you enroll in this program? I still have an Amex charge (the old fashioned that's not a credit card, you just pay it each month) cards with little or no balance. So I obviously don't want to list those in this program. I am just afraid my Amex would be cancelled, and my other cards might be cancelled or have a reduced limit.

Any thoughts or advice would be appreciated.

PS: I get debt consolidation offers in the mail 'preapproved' all the time and when I have followed up the terms are horrible, as bad or worse than what I already have. So that doesn't seem like an option.

Anonymous · ‎08-16-2019

Every single company they negotiate with will shut down your account. They are negotiating to pay your creditor less than the amount owed. Creditors generally close your accounts when you do this. It will ruin your credit to the point that you can expect even non affected creditors to at best reduce your limits.

I thought for sure they would have told you this but it does not seem so. Call back. Ask them.

This is a few of the reviews from Google. For some reason I cannot link to the reviews but you can find it by Googling "financesolutions"

"They in essence, have you enter their 'program' that promises to pay off debt aggressively over 3-4 years and neglect to tell you up front that they will be negotiating with your creditors, via a law firm they work with, for potentially 7-9 months while you pay these guys the fee that is agreed upon. Which means, there's no money going to your creditors, it's just you, paying lawyer fees while you think you're paying off debt. That means your credit will be impacted badly, and when you call them to the carpet on this, you're told not to worry, the law firm in question has your back and will represent you in the event there's a problem. You know, like the problem they're about to create."

"What do they actually sell? You pay them and they tell you to stop paying your creditors. Then they hire lawyers to dispute your debts. Your credit will be ruined. "

There are more bad reviews but the fact that they have bad reviews is not the point. The point is they are not telling you the whole story. At the end of this you will go from high debt with ok credit to. Abysmal, bankruptcy level credit. They were "unable" to tell you how it would show up on your credit report because they would have fewer clients if they did.

SouthJamaica · ‎08-17-2019

@Anonymous wrote:
I am seriously considering doing this, and would love to here from anyone who has actually gone through with it.

My situation: perfect credit report except for super high credit card debt. No late pays, negative records, etc., just like 60k in total debt. Because of this, my wife and I have watched our credit scores drop from the mid/upper 700's down to 678 at last check. I am able to keep up with payments but just barely and see no prospect of paying these down the 'normal' way.

What I know: I have been in contact with "financesolutions". I understand that in this program I stop paying and I simply pay them. They in turn negotiate a settlement. According to their offer, they seem to guarantee that my total payments will be equal to the current debt - and their fees come out of that. So for example if I have them handle $40K in debt, and their fees ad up to $15Km that means they are getting the creditors to accept only a percentage (62% in this example) of the actual debt.

I have read through the complaints the BBB has on this company, and honestly, it's not too bad. They have an A+ rating because they have been in business a while and do respond to complaints when they are filed. Most of the complaints seemed to be from people who didn't realize there would be fees involved. They have told me my credit would take a hit (obviously) but were unable to tell me how this shows up on my credit report.

The questions I have are:

1. Once you sign up, how long is the negotiation period before they come to terms with the creditors?
2. Has anyone done this and can tell me how it showed up, how badly it impacted your credit, and for how long?
3. I had never heard of this concept until recently, but suddenly I am recieving mailers and even hearing radio ads for other companies in the same business. Any recommedations either good or bad on any of these companies?
4. How do the creditors you don't list react when you enroll in this program? I still have an Amex charge (the old fashioned that's not a credit card, you just pay it each month) cards with little or no balance. So I obviously don't want to list those in this program. I am just afraid my Amex would be cancelled, and my other cards might be cancelled or have a reduced limit.

Any thoughts or advice would be appreciated.

PS: I get debt consolidation offers in the mail 'preapproved' all the time and when I have followed up the terms are horrible, as bad or worse than what I already have. So that doesn't seem like an option.

IMHO it would be a big mistake. Your situation isn't that grave that you need to ruin your credit.

I would suggest instead using the snowball method to reduce your debt load:

1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.