Confused and frustrated

[waltbiggs]

I have $80,00 in credit card debt and everyone I speak to tells me their program is the only solution for me and every other program is a scam.

I just read on this site that all debt settlement companies are scams.

Who do I believe?

[jeffrey]

I don't think I would go so far to say that all debt settlement companies are scams, but it is true that many of them are and even the ones that aren't you can do the same thing yourself at no cost. This takes more effort on your part, but it is also a good learning experience and forces you to take a look at your debts and how you came to accumulate them which can be very helpful to you in keeping debt down in the future.

http://www.savingadvice.com/forums/debt/46985-debt-settlement-credit-counseling-companies.html

[elessar78]

Hey a lot of people on here are willing to help and give you good advice. A lot of people, myself included, are going through the process of becoming debt free.

Just ask any question really or you could even do a search of previous threads on the subject.

[arthurb999]

I would use them because you can do it yourself for free (and a little research).

[GREENBACK]

I have $80,00 in credit card debt and everyone I speak to tells me their program is the only solution for me and every other program is a scam.

I just read on this site that all debt settlement companies are scams.

Who do I believe?

I'm sure if you give a full description of your financial situation here you'll get information overload(a good thing) and it won't cost you a dime.

[Tree0164]

You don't need a program-you can do if yourself you are determined. 80,000 is a lot of money to have in credit card debt but if you can focus, budget and get extra income you should be fine in a couple of years.

I would recommend getting Dave Ramsey's book Total Money Makeover at the library.

[PetMom]

Just verifying in case anyone would wonder how an att. would be able to do this.

It is true, an attorney will not collect even a cosultation fee (or at least most won't) who specialize in collection law abuses.

Collection agencies notoriously break the rules/regulations/law. They do so because they know most of time they will get away with it. A consumer could do the filing of a complaint with the regulators - and join everyone else complaining.

If a suit against collection agency is successful (the att. will tell you how to get the info about what the collectors are doing illegally) then the collection agency pays the fine/costs.

[poundwise]

Debt settlement is not a good solution. Most debt settlement firms will simply obtain a POA and direct your billers to send statements and make calls to them. This will stop collections attempts, in most cases, at your home. This is the lure for many people, who are tired of dealing with it themselves.

However, the debt settlement firm will then engage in a practice of collecting funds from you but not paying your creditors. After a period of time, and after they have collected their fee from you, the firm will begin to make offers for settlement to the creditors. Some creditors will make these deals as they have not paid in many months and decide that getting something is better than nothing. Some will not accept a deal or will require more than is what is offered to settle.

In most cases, your credit is severely damaged because (a) many payments are not paid and (b) a settled debt is recorded as such on your credit report.

In addition, in most cases, the amount of debt, or a portion of it, forgiven in a settlement counts as taxable income to you.

Of course, during this time, the creditors may sue you and win a judgment. Any who do can then garnish your wages or place a lien on your property. Employing a debt settlement firm offers no additional protection against such action.

Tell me again why their service is worth what is often an exorbitant fee?

Most people can work their own way out of debt, if they are just willing to accept the responsibility and get to work on it. Books/systems like the aforementioned Dave Ramsey's Total Money Makeover offer a plan for getting out of debt that many people have followed successfully. For those who need a little relief and more assistance, organizations like CCCS exist that can help.

In my view, employing a debt settlement firm is the ultimate in personal financial irresponsibility and denial. If you can pay your debts over time, then get to it and deal with it. That may include some type of settlement with certain creditors, particularly old debts, but it is something you can do yourself. If you absolutely cannot address your debts, you may have to file bankruptcy.

[waltbiggs]

I'm sure if you give a full description of your financial situation here you'll get information overload(a good thing) and it won't cost you a dime.

I am paying about $3,200 per month on my credit cards and my payments are current. All of my other debts are current as well. What else can I tell you about my financial situation?

[GREENBACK]

You should list your income, expenses and any other debt. Break it down by item.

I don't know much about the DS companies but I believe you can do it yourself with sound advice.

[Seeker]

I am paying about $3,200 per month on my credit cards and my payments are current. All of my other debts are current as well. What else can I tell you about my financial situation?

If all your debts are current and you are paying $3200/month, then what's the problem?

Just continue to pay off your debts, paying whatever extra you can spare toward them, and they will be gone.

One only looks for DS companies when they cannot pay and are looking to reduce their debts. The problem is that most of these Debt Settlement companies will ruin your credit because they essentially get your accounts into "non-paid" status where then, they can "deal" with your accounts. In other words, they will ruin your credit. The "unpaid" debt will also be taxed as a gift (something forgiven by the original credit issuing company)... so where do you actually save?

In the long run, you are better off paying your debts and keeping current with them.

If you are looking for more advice, how to save more money to apply toward your debts), then list income, and monthly expenses. Many people here will spot where you might be able to save some dollars to apply toward your CC debts, and therefore help you to pay it off quicker without ruining your future credit and without any costs.

[raoul]

Like Seeker I am not sure what is the cause of your distress. So I will assume the worst and that is, the amount has gotten too big that you cannot pay it on time anymore so the interest is eating you alive. Right?

If that is the case then Debt Settlement is a good option to go. I am not an American so I am not so familiar with your system there but here in the Philippines that is normal course of action by Filipinos who can't pay there debt anymore.

[raoul]

I am not sure what are your other options but my one-cent worth of advice is, "You cannot correct a mistake by making another mistake."

I said mistake because I believe that being buried in debt is a financial mistake. And like all mistakes, they can be avoided in the first place.

[raoul]

I agree with Greenback. Managing your finances is the right step towards the right direction.

[raoul]

My mother once told me that one should not spend more than he earned. I am now sure that this saying does not originate from my mother but it's a very wise advice for all of us.