Has anyone here ever used those debt consolidation companies? I am thinking of using this company called Debt Settlement America. Has anyone had experience with them or if you could recommend one that would be great. Thanks

 

I'm not familiar with that particular but I'll give you a general warning. Most of those companies say they are "Non-profit", don't be fooled. A lot of them are very crooked.

Also when you work with any of these companies it will be on your credit and is almost as bad as a bankruptcy. If there is any way to not use one of these companies I would do it.

www.daveramsey.com

 

www.budhibbs.com

 

Using one of those companies will negatively effect your credit score.

Depending on what kind of debt you have you can probably consolidate a lot of it yourself.

 

Exactly, stay away, they are bad news

 

it just effects it cause you are opening another line of credit or if you are trying to decrease what you owe to a company.

http://www.lendingtree.com/cec/yourm...our-credit.asp

 

Consolidate your debt onto your lowest Credit Cards....and call the credit card companies yourself and ask for a lower rate.

 

It depends what kind of debt consolidation or management you use.

There are companies out there that will work with your creditors to lower your APR and your payments. It helps if you are current with your payments.

The steps for these programs are pretty straightforward:

1) Contact debt management company to set up account
2) The company will contact your creditors to inform them you have enrolled in a debt management program.
3) Contact your creditors and close all of your accounts. Closing your accounts will hurt your credit score but you must do it before the creditors hear from the debt management company. If you don't close them yourself your creditors will do it for you and that will hurt your credit score even more so.
4) You will still receive your monthly statements from your creditors because your balance is still due; the debt management company does not buy up your debt.
5) The debt management company will automatically deduct each month's payment from your checking/savings account and then disburse it to your creditors on your behalf. They usually also charge a $15/month fee for the service.

The benefit of these types of programs is that they will substantially lower your APR. However you must pay the monthly service fee and you must close your credit accounts. Additionally you can't open any other unsecured debt (credit cards, signature loans, etc) while you're in the program. You can still purchase a house, a car, student loans, etc. Most creditors will only allow you to enroll in programs like this once every 5 years and if you miss a payment they will most likely terminate your enrollment and restore your previous APR.

It's a good alternative to having a place consolidate your debt because you don't need to open another line of credit in order to reduce the interest you are paying on your current debt.

 

ok I would love to put all the debt onto credit cards but this isn't a small amount of debt it is a huge sum of money. I think the only way I can get out of this mess is to use a debt consolidation company and honestly my credit is so bad it wouldn't make much difference to hurt my credit even more by using one of these companies.

 

Is it credit card debt or some other type of unsecured debt? (Medical bills, etc)

 

its all other types of unsecured debt. Not really credit card debt

 

Try giving these people a call:

http://www.consumercredit.com/

 

whats the difference between the link you just gave me and the company I have already talked to, Debt Settlement?

 

The company i provided won't consolidate or settle your debt. They will manage it by working with your creditors. The company will work with the creditor to lower your interest rate and adjust your payment schedule. You'll still end up paying off the entire principal you owe, just not as much of the interest. Additionally, it won't show up on your credit report.

 

stevenyi.. do u have debt problems?

hahaha

 

hahhaha jerzpwr,

naw not me. my friend has got some serious debt problems like tens of thousands, especially since he just graduated, so he was asking me to help him out by looking into this stuff. Lots of knowledgable people here on the forum so I might as well ask.

 

Best way to consolidate debt is to refi (if your a home owner) It will improve your credit unlike these werid companies that are suppossedly non profit.

 

Most bad debt consolidation companies tell you to skip payments for a while until credit cards give up and offer you settlements. That is not the most appropriate way to handle the situation.

Using the websites listed above will be better.

 

is your friend's name Steven Yi?

 

Hope you know there's a difference between consolidation and settlement. Debt settlement is a negotiation process, whereby the debt settlement company negotiates with your creditors on your behalf. And consolidation is like getting one big loan to pay off many bill/loans.

If you wanna save money i'll go with the settlement.

 

I would also suggestion a HELOC to consolidate some of your outstanding debt. Interest is tax deductible as well.

HELOC = Home Equity Line Of Credit

 

I work for Merit Financial (thisismerit.com) and if you own a home I could help you consolidate your debt, refi, heloc or whatever...we also have a free credit repair program...

 

somebody would fall for that?

 

In Dave Ramsey's book "Financial Peace" he gives an example of why Debt Consilidation isn't the best way. I'll feind it and post it.