Who's Been Through Credit Counseling?

Lounge By sweetness_221 Updated 26 Mar 2010 , 9:01pm by tirby

sweetness_221 Posted 25 Nov 2008 , 10:31pm
post #1 of 12

Me and DH have an appointment tomorrow to meet with a credit counselor to get our finances back in order. We aren't late on anything yet, but if we don't do something soon we will be. With this hopefully we can get back on track. This economy has kicked us in the behind with the food and gas prices not to mention all of the higher utility costs. At least the gas prices have come down for now anyways. So my question is what should I expect? Does it actually work?

11 replies
michellenj Posted 25 Nov 2008 , 11:01pm
post #2 of 12

I worked with a girl who was going through this. She contacted several companies that offered the service, and they all told her that they couldn't help her until she stopped paying her bills and was in "real" trouble. This has been a few years, so I hope I'm not messing it up. She did more research and found that there are govt. agencies (?) that you can go through that do not charge a fee. She was told to beware of those that charge a fee, that sometimes they don't pay your creditors on time and you get worse credit. icon_confused.gif

I'm sorry, I'm babbling. Have you googled credit counseling scams, just to see what is out there?

I know that some peeps swear by Dave Ramsey.

stephaniescakenj Posted 26 Nov 2008 , 4:10am
post #3 of 12

I used to work with a girl that went through it too. She was in bad shape though, she was paying off credit cards with other cards and getting her mortgage payments in by the skin of her teeth. She did sign up for one company, it was something like AAA but I can't remember exactly, I just remember it sounded like AAA because I have their roadside assistance, so they made her cancel all of her credit cards. The were supposed to negotiate a lower rate and set up a payment plan to pay off every card in 36 months. She paid one payment to the agency each month and they allocated the money to the credit card companies. Well one of the credit card companies never agreed to their payment plan, according to the credit card company the minimum payment was $20 per month, the company helping her said they had negotiated a $10 per month payment plan... well months go by and the woman hasn't been keeping up on her credit card statements, so she opens up the one credit card bill and it shows the payments are being made but that she has a balance showing as DUE NOW. turns out, the credit card company was sending in negative marks on her credit report for 4 months straight and she couldn't get them removed. She called the credit card and said I thought we had a deal to send in $10, they say no, it's not their problem and her credit was really messed up by the whole ordeal. The company helping her never followed through on the agreement so there was nothing she could do about so if you do find something that works, make sure you keep an eye on everything very closely. you might be better off contacting your creditors on your own as well and asking if there is anything they can do to help.

Callyssa Posted 26 Nov 2008 , 4:20am
post #4 of 12

I've heard that the majority of those companies are no good; my brother has a masters in finance and we had a conversation about them once. One of my good friend's went with one of them and ended up in bankruptcy anyway. I know of at least one that is supposed to be true and good, but I can't remember the name! I THINK it was something with 'green' in it.....Greenpath, or Greenspan......sorry, if I remember it later I'll let you know!

Carolynlovescake Posted 26 Nov 2008 , 2:57pm
post #5 of 12

We are going a company and have for a year. It's not helped us at all.

We are now looking at bankruptcy.

sweetness_221 Posted 26 Nov 2008 , 5:55pm
post #6 of 12

I went with one of the govt approved centers. The ones you have to see if you plan on filing bankruptcy. Plus I checked them out on the Better Business Bureau. Unfortunately because we aren't behind on anything and all of our debts have a decent rate they couldn't help us. So it looks like now we might go the Chapter 13 route. Right now with just the debts we are paying out over $1000 a month and that doesn't count our mortgage or living expenses. With the bankruptcy plan it would be about $350 for 5 years to get it payed off. I even tried to call the creditors to see if they could help us. One I called said sorry we can't lower your rate right now try back in 3-6 months. icon_mad.gif I told her thanks anyways but it would be too late by then. It just frustrates me. I'm trying to pay my bills and they don't seem to care. If I was behind then they would work with me, but since I'm not they won't. It makes absolutely no sense to me. Well thanks for the advice all. Hopefully I'll get something resolved soon. Now I just need to contact a lawyer.

chutzpah Posted 26 Nov 2008 , 5:58pm
post #7 of 12

Does your bank offer this service? If so, I would contact them and make arrangements there, instead of going with an independent company.

sweetness_221 Posted 26 Nov 2008 , 6:08pm
post #8 of 12
Originally Posted by chutzpah

Does your bank offer this service? If so, I would contact them and make arrangements there, instead of going with an independent company.

My bank is the one that told me they couldn't help me. We've tried to get debt consolidation loans, Home equity lines, etc... Unfortunately because of the economy any equity we had in our house is gone. 2 Years ago our house was worth 165,000. Now it's worth around 135,000. We had 80% equity in it and now it's basically gone. We have tried many different options and unfortunately we have run out them. It really sucks to be in this situation. We've had a pretty hard year. We had a few months where our income was less, we've had to basically live on the credit cards. I've had major medical problems. Plus with the price of food, gas, and utilities it was just killing us. One good thing is the gas prices have come down, but it's too little to late for us. Ughhh!! You gotta love being in debt. icon_rolleyes.gif

s_barnes76 Posted 27 Nov 2008 , 2:03am
post #9 of 12

I have been through this, and just like another poster stated, you have to already be behind before they will help you (at least that's how it was with our company) We also had the problem of the company not making our payments for a couple of months, which REALLY got us behind. If I had known then what I know now, I would've just filed bankruptcy and been done with it. What they don't tell you is that it actually messes up your credit worse to go through credit counseling than it does to file bankruptcy. We did this about 10 years ago and our credit reports still show "charge off" on some of our cards. Creditors don't want to see those words. It has made it very difficult to get any kind of loan. We bought a car 2 years ago with an 18% interest rate because we had to have a car and that greedy company was the only one that would give us the time of day. I've since gotten it refinanced, but the rate is still almost 14%, so $200 of my payment goes just for interest. On the other hand, my parents filed bankruptcy several years ago and they have been able to get new cars and just built a house (both with decent interest rates) so it has been easier for them than for us. I don't mean to scare you, I just hate for anyone to have to go through what we went through. I hope you can find an easy solution.

margaretb Posted 28 Nov 2008 , 6:23am
post #10 of 12

I went through credit couselling, but it was in Canada, and my plan was something under the bankruptcy act where I had to cancel all my credit cards, obtain no new credit, interest rate was reduced to 5%, only unsecured debts could be in it, and it was an actual court order that sets it up. It remained on my credit report for 4 years after the final payment was made, but I see that now it is only on for 2 extra years (I assume because if it is going to be there for 7, why not just file bankruptcy instead of paying it off). It was good, and I really liked the people I dealt with. However, as far as I can tell, in the States there isn't a law about this, it is just someone trying to get you better rates and doing the paying for you. I've heard that some of them will also hold the money for a month or more before paying it out, and I think I read once about one that collected a bunch of money, but never paid ANY out because the small print or whatever said that their fee gets paid first before any payments made. Horror. If you do go through with it, make sure you have copies of any agreements or whatever, because I have had one company that every few years will put that debt back on my credit report as charged off. My guess is that it is a computer glitch or something that the debt was not paid off, then transferred to another department with a new account number, and once in a while it comes back up in the original department. So I send in a dispute to the credit bureau with my statement saying everything was paid in full and it gets removed. Last time I wrote to the CEO of the company about this situation and said next time it goes to the ombudsman for finance (or whoever it is). No reply, but we'll see if they make sure it doesn't happen again.

I would also like to say that just because you are in a tough financial situation, does not make you a bad person. It would be one thing if you were in debt because you were taking a carribean vacation every year and living the high life on borrowed money. But sometimes you are doing the best you can and things just get out of hand.

Good luck.

sweetness_221 Posted 6 Dec 2008 , 9:59pm
post #11 of 12

Well here's an update to my situation. My DH and I are filing chapter 13 bankruptcy. We actually qualified for Chapter 7, but I felt that it was the easy way out. We actually want to pay our debt back, unfortunately there's just too much of it to do it conventionally. So this way we will pay roughly $350 am mth. for 4 years and be done with it. I hate this, but right now it's the only way out. Thanks to everyone for your advice and suggestions. I really do appreciate them.

tirby Posted 26 Mar 2010 , 9:01pm
post #12 of 12
Originally Posted by michellenj

I know that some peeps swear by Dave Ramsey.

I am one of them. It truly changed our life. NEVER looking back NEVER

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