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07/22/2009 07:03:56 PM · #1 |
| So, I've been in touch with these debt settlement/reduction companies. Fire International, which promises to negotiate with my bank to forgive up to half of my $13000 in debt, and The Credit Exchange, which promises to negotiate with my bank to lower interest rates. I'm totally new to this so I was wondering if anyone has experience or knowledge about these kinds of things... Are they legit and safe? |
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07/22/2009 07:42:54 PM · #2 |
| Most are legit in a way. They will negotiate the debt for you and the lender will charge off the balance not received. Which will kill your credit and or add a statement on the accounts stating settled for less than a full balance and still show it as a charge off. They will also put another statement stating your involved in consumer counseling and most banks will not touch you. Very few subprime lenders left so it'll be tough to get any credit in the future or if you do the rates will be out of this world. .....Hope that helps. |
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07/22/2009 07:44:37 PM · #3 |
peterish - During a checkered career, I worked for some time at the Better Business Bureau. That's one place
that taught me to always check those nice easy promises.
Now, your profile says you live in New York State. When I found your state's official website, this link Getting Out of Debt Safely and subtitled "When to go to a credit counselor for help" seemed as if it would help you.
Then, feeling lucky, I went over to the United States website and found
Facts for consumers knee deep in debt
No, I didn't read the whole thing (that's for you to do) but way down the page there is a section on Debt Negotiation Programs. You might want to read this one with extreme care.
I don't know the firms you talk about - but check out your state's Consumer Affairs Department and the BBB and see what kind of reputations they have. You can find phone numbers for both these references. Frankly, I don't think you can come out sweetly discounting your debt, unless you're General Motors, or somebody like that. And anyone who promises you can is looking for something.
Good luck.
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07/22/2009 07:50:21 PM · #4 |
Don't forget the basics.....call the people you owe money to, explain that you understand that you created your own situation.
Tell them that you really have no interest in the consequences of defaulting on the debts, but that the debt is debilitating.
Ask them if they may be able to work with you to work out a more equitable solution for both of you.
They would rather get paid, and lose a little on interest and penalties, than have it written off.
Call and ask.....it can't hurt.
Been there, done that.......am still paying for some mistakes from almost a decade ago.
I'm smarter and more sensible now, albeit poorer......8>)
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07/22/2009 07:57:24 PM · #5 |
You can handle it better yourself. I heartily recommend listening to what Dave Ramsey has to say. Lots of good advice. He has a strong Cristian take on things, but if, like me, you are not religious, just set aside those parts and you still get some solid advice.
I have a DVD of his on how to handle collectors and negotiate with creditors, it is excellent material. |
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07/22/2009 08:11:53 PM · #6 |
Originally posted by Yo_Spiff:
You can handle it better yourself. I heartily recommend listening to what Dave Ramsey has to say. Lots of good advice. He has a strong Cristian take on things, but if, like me, you are not religious, just set aside those parts and you still get some solid advice.
I have a DVD of his on how to handle collectors and negotiate with creditors, it is excellent material. |
I second this - Dave Ramsey is the only way to go. Also, be aware that even when you go through "legit" debt consolidation/help firms, it will have a negative impact on your credit report and scores. I went down that road many years ago because of my "ex", and it was an awful experience, and it negatively impacted my credit for years. |
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07/22/2009 08:30:03 PM · #7 |
Do it YOURSELF... I just did with two of our credit cards... And, I did it the really old fashioned way.. I purposely stopped paying them.. After two months, they contacted me and after me purposely ignoring them for 2 more weeks, I called and said what can we do to resolve this..
They both agreed to lower my interest rate down to next to nothing, take off the late fee's that accrued, not ding my credit and we set up a monthly payment plan.. The bad news is, we can't use these cards anymore..
Now, don't get mad at me.. I didn't just do this out of the blue.. I did get my hours cut at work & this is my last month of working so I am being laid off..
One card raised their interest rate from 8% to 29% WITHOUT any warning and the other raised their interest rate from 3% to 29% because they said I made my payment late... And by late, they mean I made it at 3:00pm Pacific Standard time and so it wasn't there by 3:00pm Eastern Standard Time, so I violated our agreement.
I wasn't happy with either one and had not planned on using them again.. All credit cards have a plan they will work out with you.. All you gotta do is ask.. Just remember though.. If you're paying them the minimum payment every month, they have no reason to negotiate.. |
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07/22/2009 09:20:54 PM · #8 |
Good people are having a tough time of it right now. But I do have to say, the people who manage there debt well are the ones going to pay for it in higher prime rates and fees. I've seen to many people take advantage/abuse these programs both credit card and mortgage because they got over extended and want to keep there same life style which they couldn't afford in the first place. The days of filing bankruptcy and severe slow pays with expecting to get back into prime low rates within a couple of years are long gone. The news say the Banks are tight on there lending, not really the case. The prime lenders are still lending to prime credit risk, just there more sub prime credits out there and the sub prime lending companies have pretty much gone out of business. It's a shame people are pointing the finger at the government and the banks, when we the people got us into this mess.
Message edited by author 2009-07-22 21:23:10. |
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07/22/2009 09:26:38 PM · #9 |
It takes two three to tango. The banks telling people they can afford it and the borrowers just believing it without doing their own math. (and the government removing the regulations that would keep the banks in check)
Back to the OPs question. I would stay away from the loan consolidators. If you have a good relationship with your bank you may be able to get a lower interest loan to pay off the high interest debt or just have the interest rate lowered on the existing debt. You can do this yourself without a middleman. In the long run you'll keep or improve your credit rating.
Message edited by author 2009-07-22 21:27:57. |
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