Thank you very much. I am wondering if I can share your article in the bookmarks of society.

Has anyone ever worked with an organization called Family Credit Counseling Corp. in Lauderdale Lakes, Florida?

By the way, I got into financial trouble because I relied on three credit cards to get myself through college--the student loans I got weren't nearly enough to cover my expenses, and how I wish there could have been an alternative, but I am no blue blood, so there was none. After I finsished school I got sick; it took just a few months of bad luck to mire myself into this sick sad state of misfortune, but I fail to see how it matters because I really to want to pay off all this debt.

Anyway, I signed up with FCCC in 2004, they charged me $35 a month to sit back and collect the last bits of my money. It actually worked out great for a while (the phone calls stopped), until the office was apparently washed away by Hurricane Rita. The last few checks I sent them were lost in the flooding. So I stopped paying, just like you would.

They were sued in a class action lawsuit; I recieved a $25 payment. I complained three times to the Florida Better Business Bureau, the Florida Attorney General, the law firm that handled the litigation, the accounting firm that handled the payment, consumerist.com, and the Florida Office of Business & Regulations (or something like that).

Nobody has been able to help--meanwhile one credit card has gone to collections, and I wrestle with the 2 credit card bills and one medical bill. I would have been better off without the FCCC. Is there another place to complain to?

Has anyone ever worked with an organization called Family Credit Counseling Corp. in Lauderdale Lakes, Florida?

By the way, I got into financial trouble because I relied on three credit cards to get myself through college--the student loans I got weren't nearly enough to cover my expenses, and how I wish there could have been an alternative, but I am no blue blood, so there was none. After I finsished school I got sick; it took just a few months of bad luck to mire myself into this sick sad state of misfortune, but I fail to see how it matters because I really to want to pay off all this debt.

Anyway, I signed up with FCCC in 2004, they charged me $35 a month to sit back and collect the last bits of my money. It actually worked out great for a while (the phone calls stopped), until the office was apparently washed away by Hurricane Rita. The last few checks I sent them were lost in the flooding. So I stopped paying, just like you would.

They were sued in a class action lawsuit; I recieved a $25 payment. I complained three times to the Florida Better Business Bureau, the Florida Attorney General, the law firm that handled the litigation, the accounting firm that handled the payment, consumerist.com, and the Florida Office of Business & Regulations (or something like that).

Nobody has been able to help--meanwhile one credit card has gone to collections, and I wrestle with the 2 credit card bills and one medical bill. I would have been better off without the FCCC. Is there another place to complain to?

Has anyone ever worked with an organization called Family Credit Counseling Corp. in Lauderdale Lakes, Florida?

By the way, I got into financial trouble because I relied on three credit cards to get myself through college--the student loans I got weren't nearly enough to cover my expenses, and how I wish there could have been an alternative, but I am no blue blood, so there was none. After I finsished school I got sick; it took just a few months of bad luck to mire myself into this sick sad state of misfortune, but I fail to see how it matters because I really to want to pay off all this debt.

Anyway, I signed up with FCCC in 2004, they charged me $35 a month to sit back and collect the last bits of my money. It actually worked out great for a while (the phone calls stopped), until the office was apparently washed away by Hurricane Rita. The last few checks I sent them were lost in the flooding. So I stopped paying, just like you would.

They were sued in a class action lawsuit; I recieved a $25 payment. I complained three times to the Florida Better Business Bureau, the Florida Attorney General, the law firm that handled the litigation, the accounting firm that handled the payment, consumerist.com, and the Florida Office of Business & Regulations (or something like that).

Nobody has been able to help--meanwhile one credit card has gone to collections, and I wrestle with the 2 credit card bills and one medical bill. I would have been better off without the FCCC. Is there another place to complain to?

These are all interesting comments. It is very sad that so many people have been burned by credit card and other debt. Your first credit card is great! It starts out so easy and fun, buying a few things here and there. At first the payments aren't so bad. You get hooked on the thrill of owning that new thing! A TV, some expensive hobby toy, a boat, yada yada. But before you know it, you realize you can't afford to make the payments, and those unexpected hospital bills just add to it. YES, it is true that "you got yourself into this mess". I've been there with all of it, and now I'm about 2/5 of the way through my bankruptcy. At first I tried the credit counselling route, but when I found out their fees and their methods for handling my debt, I was unable to put my trust in them. So I discussed my debt situation with my close friends, family and eventually, several bankruptcy attorneys. Most suggested trying to work out payment plans, but I had IRS debt and State Tax debt on top of my other debt and knew the penalties and interest were going to eat me alive for many many years. Reluctantly, bankruptcy seemed like my only choice. By the time my bankruptcy ends, I will have paid off ALL of my debt as nothing was "written off" in my bankruptcy. At least that's one thing I can say I'm proud of during this whole mess. If everyone reading these blogs learns anything from this, I hope that would be not to get hooked into that gotta have it now mentality. SAVE your money FIRST, and make your BIG purchases only when you can afford to pay for it with CASH. Credit cards should only be used for DIRE EMERGENCIES like a death in the family or if your car engine blows up. Save first, buy later. That will be the hardest lesson learned for most people, and the toughest thing to live by. Good luck to everyone on this blog. For those of you struggling with debt decisions, research as many different options as possible before you make your final decision and keep your spouse involved in family money matters at all times. You will get through this. Set your goals in firmly believing that you CAN live within your means. Make a plan and stick to it!

Debt settlement is NOT the same thing as credit counseling. I got buned by credit cards in the 1990s -- my own fault for being gullible -- and realized one night that I simply could not pay my bills. I tried to negotiate a lower month payment amount with one of my creditors, which was refused, but the CSR I talked to suggested Consumer Credit Counseling Services, which used to be a non-profit organization that negotiates a lower interest rate and thus a lower monthly payment with your creditors. I stuck with that program for 6 long years and paid off everything I owed. Debt settlement companies are run on a for-profit basis and will destroy your credit rating if they get a chance, so stay away from them and go to credit counseling instead.

OMG...I can't believe that the truth has finally been told. FYI, before anyone signs a contract with a Debt Settlement Company, find out who actually does the settlement. Check out the website for the State of Illinois. (Lisa Madigan, Attorney General has recently filed) as there is a pending law suit.

Many individuals think that the debt settlement company that they are paying are actually doing the settlement, but that is not TRUE. It is a third party administrator, who has all your personal information.

I work for a debt settlement company and can admit the program is hard and not for everyone. Any person's debt portfolio within a debt settlement program is unique. While John Doe may have credit card debt he racked up because he lost his job, Jane Doe may have used said credit account for a cash advance. This slight difference in how the consumer went about using their credit can affect the results of a debt settlement program.

I've seen people complete our programs and I've seen $25K+ debts sliced into as little as 20%. Some of these results are astounding, while more aggressive creditors like Target and American Express are generally sue happy. They'll sue you for the debt even if your sole means of income are Social Security or Disability, both of which are exempt sources. I've seen HSBC sue people over $400 which costs the credit card companies about half to even pursue in that manner.

Some people SHOULD file bankruptcy. Not all of those people eligible for bankruptcy WANT to file for it. We have some consumers enrolled in our program that outright refuse to do so and remain committed to their decision to settle the debts even when sued left and right.

Ultimately, you need to know what you're joining up for. Ask the right questions. These people who claim they are "worse off" after the debt settlement companies should have committed to the investment. As long as you're with a legitimate company, you'll be out of the debt. But quitting half-way through your program WILL leave you on YOUR OWN with your principle balance + late fees/penalties.

lol, at first I thought the title "DEBT CUT IN HALF? DON'T COUNT ON IT" was about Obama's pretend budget pledge. Then I realized this was msnbc.com - and they couldn't possilbe tell any potential negative truth about him.

I had a very good experience with debt settlement. But, I did a lot of research before I made my decision. Credit counseling payments were to high for me and I did not qualify for bankruptcy. I hired a law firm and they did an excellent job. They fully disclosed all the pros and cons of debt settlement and explained that results are not guaranteed and vary based on individual situations. They said that if I had recently done large cash advances or balance transfers or if I had a lot of real estate That could negativley impact the settlements. I felt they were very upfront. I strongly recommend using a law firm if you choose to go the debt settlement route. I don't know exactly how much they saved me but I had about $45k in on 5 credits cards settled and paid off in a little over 24 months. I would say including attorneys fees they settled my debt for a bit over 50% of debt I had when I hired them. It did take about 5 months to get the first settlement. It was a little trying at times when aggresive collectors would hassle me. But I saved my settlement money diligently and it worked for me. I would strongly suggest using a law firm.

Um why would you pay someone to do that when you can just do it yourself. I gave capital one 14 months to lower my rate. I follwed every rule they told me. I called back get it back to 10.9% instead of 23.1% and they came up with a new rule. I applied for a personal loan from my local credit union (uwcu.org) and paid them in full making sure they never receive another penny of profit from me again. Instead of paying 200+ a month and getting knowhere I pay 119 for 2 years @ 11.3%. Totally worth it since my profit goes towards University of Wisconsin employees and CREDIT UNIONS DONT OPERATE FOR PROFIT like banks do.

When my exhusband and I split up, I was left holding the proverbial bag of $9,000 worth of debt. He'd taken cash withdrawls on our credit cards, and personal loans out that I knew nothing about. Yet, since the debts incurred while we were married, half of it was my responsibility. To say I was upset (and frankly panicked) would be a gross understatement. He always handled our finances, so I had no clue. I sincerely wish I had taken a more active role, but hind sight is 20/20, and I've learned a very valuable (albeit expensive) lesson.

Three weeks later, I came down with pneumonia and was put on short term disability, making 40% of my gross wages for two weeks while I got better. Since my exhusband didn't pay any child support, I was also stuck trying to feed my child and I on two fifths of what I made before. I still had to pay rent, my utilities, and food. I ended up using my credit cards to help meet my monthly expenses. When I got back to work, I was met with a company-wide e-Mail saying that everyone's gross salary would be reduced by 10%, due to profit losses. So here I am stuck with a mountain of debt, trying only to provide a life for my family.

I called on debt settlement place that said while they probably couldn't reduce the principal amount, they'd reduce the interest rates and I'd only have to pay $100 a month. However, I'd be stuck living hand to mouth for five years. I considered getting a second job, but then what I made in the second job would go for the extra cost of added hours my daughter would be in daycare, since I'm charged on a per-hour basis. I briefly considered throwing in the towel and declaring bankruptcy.

In the end, I called my creditors and haggled with them myself. I ended up negotiating my OWN settlements, and working out payment arrangements that would allow me to still have some semblance of a life. I'm proud to say I've paid off two creditors, and I've got two more I'm slowly but surely working on.

I'm not passing judgement on others who got into CC debt. While I'm confident that some of them used their credit cards for needless items such as a new TV, a new wardrobe, or what have you...I'm just as confident that there are those like me who found themselves in an unexpected negative turn of events. But I took responsibility for my debts, and for not being active in the family finances. It's a long road, and it's not a pleasant journey most of the time. But in the end, it IS worth it.

Fool me once shame on you, fool me twice shame on me... I was 17 when I got my first credit card in the mail. I did't even apply for it. I later learned that my university SOLD my private information to local credit/marketing companies in order to send this to me. I quickly learned that "credit cards" are a fancy title for "For the honor of holding this card in your purse, you get to pay rent on your own money". Now I know. I learned the hard way that there is no free lunch. Today, at age 37, I only hold secured debt-- my mortgage with a 30y fixed low rate because I have a good credit score. I learned a hard, painful lesson really early and I never forgot it. There's no shame in making a mistake, we learn from them.

This article is obviously an advertisement for debt consoilidation, notice they have a link to a debt consolidation company in the article! Debt Settlement is a tried and true practice that will eliminate debt. To suggest that someone with 20k in debt and an income should file bankruptcy is an ignorant statement. Debt consolidation will typically raise your minimum monthly payments, if you're already struggling to pay your debt how can you justify raising someones minimums? if you can afford to pay more on your debt why would you pay someone a fee? Why not just pay that money directly to your creditor? This is exactly what a judge will say if and when your debts go into litigation or you try and file bankruptcy. If your struggling to pay your debt on your own paying a higher minimum to a debt consolidation company will only make your situation worse and eventually you'll fail in the program and will be worse off and the money you spent will be gone. With Debt settlement if after 1yr or 2YRS OR 5YRS you decide to leave the program the money in your special purpose account above your fees is your money. A client can take that money and make lump sum payments on his cards on his own.If you stick with the program you will be debt free faster and at the lowest outlay in cash to the struggling debtor. If you cannot afford to make you minimum monthly payments on your credit cards you cannot afford debt consolidation. If you can afford to make higher payments than your minimums you should just increase your payments to your creditor and eliminate the debt faster. If you're working, and fell behind on your debt, can't afford the minimums but really want to pay off the debt,Debt Settlement will allow you to pay you debt and move on with a clean slate. if you do sign up for a program that is 36 months long anticipate it being successful in 36 months not 3. If you have any question about the debt settle ment process email me Don Sadler dsadler32@sprintpcs.com

These companies are ALL scammers. 8 years ago, I enrolled with Jubile Financial Services, with the same hollow promises. They settled one account, then my phone calls went unanswered for three months. I demanded statements which never came and ended up closing my bank account to stop their withdrawals. A month later the FTC shut them down but no one ever went to prison. They took a great deal of money from others; I was lucky to only lose about $500. Most lost thousands and still were thousands in debt. Oh, and the BBB? USELESS! Jubilee had a 100% positive rating. My complaint was ignored after sending me a single postcard saying they had received it. No action. BBB is a JOKE.

I worked for New Beginnings Debt Settlement in Jupiter Florida for almost a year before finally getting fed up with this company taking advantage of already struggling people. I’m going to outline a few things in hopes someone reads my post and it saves you a huge headache.

1. This company is a back end center. They outsource their “salesmen” in offices across the U.S. These “sales” offices all advertise under different names that are constantly changing. Once you are sold on the program, the sales offices send your info to New Beginnings and their people start contacting you. Why is this bad? Because they do not tell you this, and a lot of clients do not figure it out, so if you have a complaint and want to file with the Better Business Bureau or the Attorney general, you are going to file under “generic sales office name” not New Beginnings. NB has a Better Business Bureau rating of B- with few complaints, but their leading sales affiliate has an F rating with over 100 complaints, which has changed their name already.

2. All they are doing is talking and not talking with your creditors, therefore they aren’t hiring too many college graduates. The company is not going to hire a qualified finance manager at $20 an hour when they can pay an 18 yr old kid $10 to do the same thing. Now when you enter a settlement program you are giving them your SS#, all your bank and credit card info, and they require you to sign a limited power of authorization….OVER THE PHONE AND FAX. Think about a revolving door office full of 18-21 yr old kids passing around your SS#. Uhh, No Thanks.

3. Take some of these post and sanctions such as TASC with a grain of salt. Debt settlement companies pay TASC directly to be affiliated, along with other accredidations. If you are reading a comment that says I worked for blah blah and it was a good company , it is most likely a sales pitch from someone still working in the industry.

I’m out of time now, but I’ll try and post some more info later on.

The first comment here stated that people take credit and go on spending sprees without even intending to repay. I think that is a bit harsh. What typically happens is that people do have the intention to repay at time of purchase - but when the bill does come due - they usually have something else they would rather do -(something better comes ups). Thus, they blow off the bill.

The real problem is that when these same people get turned down later in life from other creditors - they are the first to scream foul and that the creditors are the 'bad guys'

I forgot to add that I did contact the credit card companies to try to arrange payments, this was 5 years ago though and they had different attitudes then - no one was willing to negotiate a lower balance, payment arrangements etc., without raising the rates to 29 - 34% and adding on late fees. There is no way out of those situations. This was Citibank, Bank of America and Chase. I do take full responsibility for falling for the scam and for also getting in the situation we were in (even though health reasons were what severely reduced our income)
Like I said, its been almost 5 years and I WILL NOT get into that credit card trap again!

I've worked in this industry for the biggest company out there. I've also settled out my own accounts with the knowledge gained. It does work. What has to be understood is that your accounts cant get settled out for a long time. So if you enroll into a 3yr program, most of the accounts wont get settled out until the end of the program. most people drop out early (like this lady above) and nothing gets settled. if she would have gone further she would be settled out. there has to be money in the savings account set up to pay the settlement in one payment...that takes time. and fees are collected upfront because what if it gets settled and paid first then cleint could walk and not pay for the services...that is why fees are paid upfront. and the example about only saving $800 on the $10,000 is wrong, the client saved thousands of dollars of not having to pay interest. that $10,000 of debt if paid off by minimum paymnets would cost about $18,000 so this client saved a lot if you look more closely at the numbers.

Here's a helpful hint for those of you who are contacted by "debt collectors." Google the acronym: FDCPA.

This law regulates the "collection agencies and third party collectors" only. The "original" creditor does not fall under the auspices of law.

Secondly, I read some interesting posts by some who are attempting to offer sound advice but might be a little "off" with respect to accuracy in creditor reporting and "negotiating to have the item removed from your credit."

Here's a pretty succinct scenario: You fall into debt for whatever reason (medical, unreasonable cc spending, true emergencies...etc), you cannot pay the minimum amount mandated by the creditor every month; you fall behind; the original creditor has been ignored (hospital, Chase, Citi...whomever), you are sent to an "outside" third party collection agency. *Note, there are internal collection departments with the original creditor where you might be 30-60-90 days in default, then there are outside collection agencies where the paper/note is sent to after a reasonable amount of time. >120 to 180 days. Ok, the collection agency has to notify you that you are now in collection and have 30 days to "pay in full" or "dispute" the debt. The fine print in the "First Notice" indicates if they do not hear from you within 30 days, they will assume the debt is undisputed and valid, and furthermore, will be reported to a "credit bureau."
If you contact the collection agency after the item or "tradeline" has been reported to the credit bureau, it will stay there for 7 years from "the date of last activity." Regardless if you make payments to the collection agency and eventually pay off the debt. Or, if you settle the debt, the tradeline still stays on your credit for 7 years as "settled," or "paid in full." If these agencies tell you they will "remove" the item if you settle the bill or pay the tradeline in full, THEY are now breaking the law. Look up FCRA.
Your best bet... is to set up payments with the "original" creditor and do your best to maintain the payments.
With respect to "consolidation" entities... kindly do yourself a favor and stay away from these corporations. Most are "for profit." Some may have a pleasant experience, but most will not be able to maintain the mandated re-payment structure, and you will loose most every dime you paid in. Period!
Now, one can pontificate and tell you to be responsible in your spending in the first place, but many people from all walks of life have many, many different circumstances. Statistically, most folks get into financial trouble over un-expected "medical" debts. Most cannot predict this type of debt... but those of you who cannot wait to get the best or newest whatever... and pay for it later, with a credit card that has double-digit rates will garner no sympathy from most "responsible" consumers.
Get what you "need" to maintain .... get what you "want" when you truly can afford it!
Good luck.

I am a bankruptcy attorney. In the bankruptcy community, the attorneys scratch their heads and wonder why.

Bad credit remains on your report for 7 years. A bankruptcy stays on your report for 10 years. Is the 3 year difference really that important?

Bankruptcy was created for exactly the situations being discussed. It is not illegal and it should be considered early on whether you decide to take advantage of it or not. I have clients come to me after they have liquidated their pensions or IRAs. These are assets are completely exempt in a bankruptcy in my state. If they had discussed the issue with an attorney they would have been thousands of dollars better off after the inevitable bankruptcy filing and discharge.

One of the above writers stated that one can avoid the taxation of the debt forgiven, but I have yet to see one example of that. IRS would take the same stance as some of the the above writers that the debtors did not pay their bills and they do not deserve any favors. Discharged debts in bankruptcy are not taxed.

Despite what some of the above writers have stated, most debtors had a lot of help getting into their financial situation. Most jobs are outsourced now and those that are not are at lower salaries. Interest and penalties are now at what would be considered loan shark rates in the past. Insurance in many cases is non-existant, and of course, most people sign contracts without ever reading the consequences. The contracts are written for difficult reading for exactly that result.

Many in state bankruptcy attorneys can negotiate debts in the same manner as the above companies. The attraction for out of state entities with no legal grounding and no real teeth for their threat of bankruptcy will always baffle me. The reasons that attorneys usually file bankruptcy instead of negotiating is because it is usually in the debtor's best interest. Without discussing the matter with a person who knows the law, you will never know the risks or benefits involved.

The reason that the funding in these workouts is placed in an account for a year has more to do with the original lender writing off the debt and selling the right to collection for pennies on the dollar. The original creditors don't want the debt on the books too long or their investors will comment. The new buyers of the collection rights are more likely to negotiate because they have less invested. But what happens when the original creditor is still involved or as many as 1 creditor refuses to go along, becomes frustrated with waiting, and files suit? The more creditors involved, the less likelihood of success and once a judgment occurs a garnishment of wages is not far behind.

That is usually when I get the call, after all the exempt money was squandered and there is nothing good to say about the attempt to negotiate with the creditor.

These companies are so successful because the debtors share the belief that they have an obligation to pay the debts back, never mind the fact that the debts have been escalated beyond any sense of moral right to do so. In my opinion, the survival of one's own family is what is really important and I have to regularly counsel my clients on a misplaced sense of shame and guilt.

I see a few people saying that Credit Card companies are not at fault...well guess again. They are at fault and are LARGELY to blame. I can some it up in statement. They are legalized LOAN SHARKS. Back in the 30's, 40's up into the 60's paying 20-50% interest was considered loan sharking and was against the law. Nowadays banks get away with anywhere from 20-30%...what I want to know is HOW?

Now, I'm not saying that people aren't a lot to blame either. Its called "living within your means" but the CC companies compile it by all their "fees" and "exorbitant interest rates." Just like they are doing right now is crooked as hell...if you aren't late with a payment to them they can still jack up your rates if you were late on another payment. Which is TOTAL BS!!! One word of advice...if you want something ...save and PAY CASH!

There WAS a 'debit relief' company across the hall from my office......about 2 wks ago, came in on a Monday morning and.....they are GONE! Keep seeing folks coming up to the suite, how sad! Building management company finally put a sign on the door informing people the company was ........GONE!

One of the major drawbacks that debt settlement companies never tell the consumer about is that any amount that is settled will be taxable as income by the IRS. If you have 50k in debt and settle for 20k the 30k forgiven is taxable as income.

I am a bankruptcy attorney and about 40% of my clients have been greatly harmed by these companies.

Wow, I'm shocked that the author never did the reasearch to know their are good players and bad ones. As a company out of Los Angeles, we have been very true to our clients with regards to being a full disclosure company. We state the worst case scenario first. Our track record shows our settlements are between 32%-35% on any given month. So again where is the wrong doing? When talking about a couple of companies then state those companies. Stop saying the industry is rogue and start doing better follow up.

all these ways to basically not have to take responsibility for yourself.
If you owe cc debit YOU owe it. You don't deserve to chapter anything or get to pay .50 on the dollar.
On the other hand if you have a sick child and mounting bills, fine I'll(as a taxpaper or fellow credit card holder) not say a peep.
But personal credit card debit you over-indulged in. Hell no. Instead of paying a reduced amount monthly for 5 years pay a reduced amount for 20 and get it all back in there. otherwise the rest of us find our rates jumping up to cover your butt.

If you think consumers who are struggling to get out of debt have the self discipline to save 150 200 a month, you're out of your mind.

Credit in this country has gone from bad to sickening. People apply for credit and begin their sending spree knowing they cannot pay it back. Then, they rely on so-called debt relief companies to bail them out. In the end, it hits the hard working tax payers the worst. Think about it!

Unfortunately, there are bad apples in every bushel. Look at the bad banks who wrote bad loans and took advantage of good people. There are many debt settlement companies out there, like anything in this life, you have to do your homework.

In addition, NBC is owned by GE Money Bank. The view of ANYBODY working for NBC is liable to be biased and should be taken with a pound of salt.

The problem is too many of these clients sign up and think that the company can work miracles for them in a short amount of time. The lady in this article made payments of $1850 on $17000. If they cut the debt in half she owes $8500 plus any fees she was being charged by the company. She made payments totaling $1850 which means that is only 20% of her payback. She obviously cannot understand that $1850 is not nearly close to $8500 never mind what she pays in fees. So instead of seeing her program through till the she decides to bash this company when she probably only completed 1 year out of a possible 4 or 5 year term. That is almost like buying a car on a 60 month lease and then trying to return it in the first year because you don't want to fulfill the term. Then when the car company says no you turn around and say they stole your money. I work for a settlement company and see this all the time. The key is patience these clients want these debts settled yet they do not have the means to settle at that time because the money must build up. Then they get impatient and back out within the first 12 months. After that they play the blame game and turn on the company that is meant to help them. They file BBB and AG complaints filled with lies to make the company get into trouble as they stretch the truth and say the money was stolen from them. Now there are good companies and bad companies in every industry but dealing with the clients in this industry is something else. You try to help them and when you can't because they hinder you from doing so they immediately turn on you and the company. This lady is looking for a settlement alright she is trying to cause a s%!$storm because she thinks this debt settlement company is going to clean her slate for free. Bad new lady you are not the first to try this and will not be the last.

Don't give anyone your debt information.

In Response to Dennis Sherry's comments:

That is completely untrue -- I worked for a CC company for 5 years -- If you owe $200/month & only pay $25, the portion that goes 30 Past Due is still Past Due. Your credit will absolutely take a hit if you don't pay the full 'Now/Current Due'.

I think that is incredibly dangerous & irresponsible to make false claims with regards to information on credit & credit scores.

As far as debt consolidation companies, my opinion (from the CC side) is that you are better off calling & working directly with your creditor. The phone calls will not stop & the accounts will charge off with non-payment (if the 'most past due' portion of your 'now due' reaches 180 days). A Charge Off can occur even if you are making partial payments -- Answer the phone, ask questions & educate yourself -- That is the best way to handle the situation...

Take responsibility!!

Debt settlement is a viable option but only for a few select people. Those who can not afford the costly payments the credit cards or debt management programs (offered by credit counseling companies) require but want to avoid filing bankruptcy.

Most people want to avoid filing bankruptcy because they know they can pay something but not what the creditors want and are trying to do the right thing.

The real problem is not the model of debt settlement, but the people who run the companies. If you are not properly trained and have experience in what you are offering, you will not be albe to train others to identify if someone is a good canidate for debt settlement and therefore you are just pushing it on everybody and anybody. Thats just wrong. You need to make sure you qualify the customer first.

If you are current and are not spinning your wheels, have 12% or lower interest rates and never missed a payment. THEN PAY YOUR BILLS AND DON'T LOOK FOR AN EASY WAY OUT.

If you are behind or have recently had a financial hardship (lose of income or job totally, medical issue, etc.) then you will most likely never get out of debt without the help of someone. The problem for this person is debt management programs (offered by credit counseling companies)are too costly and they can't afford the payment. So the next step is debt settlement or bankruptcy.

At that point the customer needs to choose what they want to do, not be sold on it like most debt settlement companies do.

Thats the biggest problem. So please get it right for once and get to the root of the problem and don't just bash something without knowing all the information. It shows your ignorance and willingness to not learn or research anything and to just A.S.S.U.M.E. We all know what that means and if you don't look it up for once without asking someone. Show us that America is not as lazy as everyone thinks it is.

Hello Mother.....'ORacle'

I am sure you are the type of person that has their whole life planned out, your hubby pays all the bills. well, in real life, sweet mother, things happen. Medical adversities happen. Insurance companies do not pay what they promised. People do not meet their financial commitments, leaving the others to take the fall. So, save your lectures. you may be right about some people, but certainly not all. We all have our crosses to bear- no one shall wear yours, too!

What they dont tell you than anytime a debt is seettled for a lower amount - that the amount forgiven is taxable income.

Ldets say total debt is 10,000 and they setlle for 6,000. You will be taxed on the 4,000 that is consdiered as forgiven debt.

What they dont tell you than anytime a debt is seettled for a lower amount - that the amount forgiven is taxable income.

Ldets say total debt is 10,000 and they setlle for 6,000. You will be taxed on the 4,000 that is consdiered as forgiven debt.

Bear in mind that if you're credit is already dinged, "cleaning up" will not erase any existing dings.
And what harm does having "bad credit" do to you anyway if you are already living somewhere you want to stay? meaning, that the only thing bad credit affects is:
A) your ability to get more, or better interest rate credit. If you can't pay what credit you've already backlogged, you certainly don't need anymore!
B) your ability to rent an apartment or house - well then, don;'t move if not necessary, and even still you may find a plaxce that will rent if you have bad credit
C) in a rare case your job application may be tied to your credit history, but most often, credit checks are not part of employment checks.

Moral here: if your credit is screwed, paying someone else to help you out will not an cannot get your gopod credit back. if you cannot pay, file bankruptcy and let the courst decide how the debt will be settled. Paying a debt settlement firm is just trhowing your money away (to the delight of the debt settlement firm)!

credit counseling is the same as a Chapter 13 Bankruptcy and your credit will reflect that. You will also not be allowed not to buy a home any time soon... if your credit score is in the low 500's you should file BK...this will allow you to start over now..instead of 4 - 5 years.

I have completed a debt settlement program. I was extremly hesitant at first. I worked with an agent who showed true concern for my situation and i was 40k in debt literally not able to keep up with even paying i had 200 dollars for 2 kids left over at the end of the month for food alone. My ex-husband payed me no child support and i felt for him because he was severely in debt (primarily the reason why we split.) I was in absolute emotional turmoil i couldn't smile couldn't do it. The best decision i made was to finally put my hands up and admit that i couldn't do this anymore. My ex-husband had filed for Ch. 7 bankrupcy before this time and i watched a once confident man be reduced to a an embarrassed and shame for a long time after. Disputes aside i still felt for him after hearing that he went to court continuously to hear how unfit he was as a human being. They probed him on how he could do this to his family let his kids down ect. I could not do this i was not emotionally strong enough. I did debt settlement for 3 years. I didn't give up, i had courage to put this company to the test. I had nothing to lose so i showed courage. I was harrassed by creditors, my credit wasn't important it was awful! my score kept going down per mo/ because of debt! i was never summonsed to court (i just told the creditors i can't pay you please leave me alone.) It was rough for 3 months i thought i had made a mistake. Again i had courage to go to any lengths to simplify my world. I was happy that my kids could go with a little more because of the drastic monthly reduce that I compiled in my savings account. The fees weren't up front it was fit into my program that worked FOR ME. My agent walked me from start to finish even when i was so close to giving up (there were times). Suffice it to say it changed my life i completed got $16,921 on $41,456.30 settled. You do the math yourself people just give up. Test your debt settlement agency make sure they have alot of time in buisness 6+ years, experienced arbitrators, and proven results then make them live up to it. Its for those with courage, fortituted, and a little faith find out what happens. My son now wants to be a finance major because of how this man helped me. Im grateful to be able to share my experience, strength, and hope to whoever reads this. I hope you see whats available to you before letting people obviously working with BILLION $$ Credit Card Companies sway you cause they want to squeeze all the cash they can and then some. But if you do get to meet Mr. Chase or Mr. Bank of America and shake his hand thank him for causing me years of turmoil because i have grown in character. "With courage you will dare to take risks, have the strength to be compassionate and the wisdom to be humble. Courage is the foundation of intergrity." I was humble enough to claim defeat without being publicly humiliated in Ch. 7. Hope this helps god bless.

Ivory Tower
I don't think people on this site are mad at the credit card companies. A lot of them are mad at themselves for getting into this situation and the rest are mad at the debt consolidation companies that were suppose to help them. Most of these people were trying to take care of their debt but these companies changed all that and had them go bankrupt. I just don't think people should judge when they don't know everyone's story in their personal life.

Im currently enrolled in a Debt Settlement program through Morgan Drexen and its working great! So far I've settled 3 of my 6 accounts and have saved 4k in the process. Over the next year I hope to be completely debt free. Customer service has been great and I've never felt pressured. My accounts were already pass due so it was an easy decision to enroll. No complaints thus far! www.morgandrexen.com

I completely agree with the comments posted by "Your Mom, Ivory Tower, Oracle."

Credit card companies loan you money in good faith, and expect you to pay it back. What's evil about that?

All of the fees, i.e., interest rate, late fees, etc., are disclosed to you and you agree to them when you sign up. What's evil about that?

How about some personal responsibility: DON'T BORROW MORE THAN YOU CAN REPAY.

By the way, I'm retired and have never worked for a credit card company, nor do I own stock in any credit card companies or banks.

It surprises me that folks do not simply do that task
themselves...squeaky wheel works for me,I pay a dollar a day on-line to my 4 credit cards I am working down...
follow up with certified mail requests for offers of compromise...I always pay a dollar over on
monthly bills,this is a cheap Plus,for your credit history.Flood them with certified mail,e-mail questions, a Paying Pest .First step,Know your Goal,
?reduced payments,0% interest,contested charges...
Good Luck....Squeaky Wheel

I worked for a debt settlement company and unfortunately a lot of people are right that these debt settlement companies do not help and make things worse. What makes me laugh is TASK they are the biggest crooks in the industry. The two thieving idiot attorneys who run Task own their own debt settlement companies and don’t help people get out of debt but just take their last dollar before they go bust! If you get an instate attorney chasing you they give you that debt back. How nice of them to get into trouble then just bail on you! Their high fees are what kills their own clients and they get away it and use the law since they are attorneys to get away with it. The Federal Government mandates to the banks that they can no longer report to their stock holders that a debt outside of 180 to 210 days is a receivable and must charge it off as a bad. Then the bank sends the bad debt out to an outside collection agency who charges the bank 30% of whatever they collect. That means the bank is already willing to forgive 30% and why the banks settle before it charges off. If you were to join ANY of the TASK firms you will be charged 10% of the over all debt up front and pay it over 6 months. They do not disclose this information to the consumers because if they did who would sign up with them? If you have zero dollars in house to settle with when PRIME TIME to settle is at 6 months and all you have done is pay fees this is exactly why the consumers are getting killed by these companies. Please note there are good companies out there that do not charge these outrageous fees. There are a few companies that work on what is called performance base. These are the companies that you need to work with. Please also note do not EVER give any company money to hold for you if they are not using a company like Global or NoteWorld a third party money holder do not even consider using them. If you give them your money you will not see it again. If you do use a company that charges a flat fee make sure that the upfront money is not going to be more then 5% of the overall debt and that the other remaining 10% gets taken out over the time that you are estimated to be in the program.

My wife and I fell victim to this type of scam, to the tune of $4,000.00., before we got wise to it. We did not know then, that our debtors had no obligation to work with these folks, but to listen to the "counselors, they make it sound like they can and do get the upper hand with the banks and loan companies!! But tye in fact, do not!! Please do not use any of these people!!! We were swimming in debt, to the tune of about $50k, from trying to hep out close, close family members who were in much more dire circumstances than we were, at that time and had promised to pay us back, something, if only a small amount each month...to help us out. We had a great credit score, I lost my job, we asked for assistance and help from the banks and credit card companies, because we did not want to cheat anyone out the money we owe, but were basically told that "Hey, you got into it, you owe us, pay-up or we will see you in court"!! We now face bankruptcy and a long, long time before our credit life will be usable again!!
Please do not fall for these things, talk with your bank, credit union, credit card companies, but I wish you luck in dealing with the likes of Capitol One and Bank of America! They could care less!!
HB

Make sure that if you stop paying on your debt..like some people suggest...that either you get into a settlement right away or don't touch it at all until the statute of limitations is up. If you even so much as call the company on your debt..the statute starts over again. Be careful. Also...those who go bankrupt or are in debt so bad that they need collections agencies---how do they still have a 700+ score? That makes no sense to me...

I am currently a client of Federated Financial Services out of Deerfield Beach, FL and all I can say about them is that there's no follow-up from them regarding my accounts. There is no interaction between me and them.I have to always contact them to get information on my accounts. Letters and e-mails go unanswered for roughly 2 weeks and they don't always post my payments in a timely fashion. While I do receive monthly credit card bills from my creditors to track my progress because Federated Financial does not do that, sometimes there is no payment posted for the month! The following month, I'll see a double payment posted. On the plus side, I have managed to pay off 4 credit cards and have 3 more to go. But what should have taken 2 years to accomplish, according to Federated Financial, will actually take me 4 years to accomplish! What a farce.

I used A NEW BEGINNING FINANCIAL in Orange,California, they are nothing but scam artists posing as christian debt relief. Nothing has happened with my accounts and nobody over their cares. They use religion as a closing tool. It makes me sick!!!! I/m going to sue them..

I don't know if you are still posting blogs - my ex-wife and I went to a non-profit credit counseling agency about 25 years ago. We were in pretty bad shape financially; their advice was to cut-up ALL of our cards, close the accounts with the card providers, and work out our family budget on a CASH only basis. It was tough at first, but we managed along with a $1,000 gift from a relative. Since then, although we're not together anymore, we are both very good money managers, have learned to control our use of credit cards and not the other way around. Remember the old adage, "dont't spend more than you take in each month" - food for thought. On the flip side of this, our daughter feel into the credit card trap at a very young age, but has climbed out of the hole with me obtaining a loan to pay off her credit card debt. She still has some work to do, but is working hard at maintaining her spending levels.

These are all 100% scams. BELIEVE IT!!

Furthermore these "my situation went from bad to worse" stories are your own fault--- You made a poor decision to put trust in a business that you did not fully research, and you clearly didn't understand all of the implications involved in this process. Why wouldn't a creditor settle? What are they gonna do, just NEVER get paid? Put a lien on your home and wait 20 years for you to sell so they can MAYBE recoup some losses? Or what? This is unsecured debt folks --- It is not attached to any assets, there is no collateral, and it is not backed by the federal government --- OF COURSE THEY WILL SETTLE! I worked in collections for over a decade and that is all we do, all day long, I worked for every major bank on the Fortune 500 and they all have settlement parameters set forth when they contract out to Collection Agencies and Debt Buyers (usually at 180 days of non payment, otherwise called a charge-off)- It is our job to negotiate the terms of settlement with these 3rd party's on behalf of our clients. We know the rules and they know the rules... Its like a network and YES, we do work together to reach a favorable solution for both sides. I have never in my 15 years working in Collections/ Debt Settlement, witnessed a situation where a Creditor/ Lender/ Bank simply would not settle no matter what. To say the very least, it would be VERY uncommon for something like that to occur - Besides most people have multiple accounts in a program like this, even if 1 of them didn't settle, they are still saving a substantial amount of money using Debt Settlement, and remember they couldn't afford the minimums in the first place... so on 35K in credit card debt, they saved 10.5K instead of the 15.7K they HOPED to save, and we are not counting the additional interest, penalties, and fees that these credit card companies would charge over the course of 20-30 years if someone was able to continue making the minimums for that long --- BLAME THE CREDIT CARD COMPANIES FOR PREDATORY LENDING PRACTICES, SCRUPULOUS FINE PRINT, INTEREST RATE INCREASES FROM 5% TO 29.9% IN ONE BILLING CYCLE, AND NOT TO MENTION THEIR COMPLETE UNWILLINGNESS TO WORK WITH THEIR CUSTOMERS IN THE EVENT OF TOUGH FINANCIAL TIMES... Debt Settlement is a legitimate and reputable business that may just need to regulation on a federal level, but I am proud to say that we help people each and every day.

Everyone loves to attack and talk as if they are experts when in fact no one knows the truth unless they have in fact experienced it. Those who claim to have been burned generally failed to do their homework and wanted the cheap and easy and fast.
Legitimate third party debt settlement companies will be members of TASC or USOBA or follow the guidelines and standards of those organizations. Both trade organizations require that members operate under a strict code of standards written by those of us in the industry.

Based on personal experience, most of the time a program fails due to the fact that the debtor breaches the agreement, does not do what he or she is mandated to do and then blames the settlement company for failing to do the job. The debtors dont read the contracts, they forget everything told to them 5 minutes after they sign up and they fail to do what they have to do to comply with the contract and make the program work.
It is impossible to run a good solid business with well trained and experienced people without paying them well and treating them well. One cannot hire young adults with no life experience and pay them peanuts and expect to do a good job. that is why no one ever appreciates how much it costs to run a company and in addition, do the marketing to bring on a client. If a company pays $25-$50 for a lead and has a 2-5 % conversion rate, has to pay the marketing rep a decent wage and has to pay overhead, cost of operation, computer programs to adhere to the privacy act, pay rent, telephone, computers, equipment,insurance , benefits, payroll, accounting, etc. by the time you bring on a client the costs exceeds, on the average about $700+ a new client. Then there is the cost of paying the negotiators who are also adults and have to support a family. Does not leave much for profit. All a settlement company asks a client to do is not to talk to the creditors or collectors and comply with the mandate of the savings formula. When the client fails or tries to do it on their own, the program dis-integrates.

All this talk about what a settlement company tells a prospective client to do is BS. The FTC says what a company can and cannot do in marketing and reliable responsible companies know this and adhere to the FTC guidelines. Good companies do not tell a card holder to stop making payments. By the time they finally decide they are in trouble and look for help, they have long since stopped and.....the internal workings of the bank and the bank regs make it impossible to settle a current account. For a settlement to happen the card has to go delinquent. This is not the fault of the settlement company.

Debt settlement works.
a. do your homework and find a legitimate company that follows TASC or USOBA guidelines or is a member;
b. be completely candid and honest with the settlement company and dont hold back
c. comply with the terms of the contract;
d. put the money away each month without fail
e. dont interfere with the negotiators efforts and think you can save money...
f. recognize that savings is not the key....getting out of debt is the key.. the savings is nothing more than a perq. it will happen but that is not the reason one should go into a debt settlement program.
g. MONEY TRACK...that is, run your life as it it were a business and track your income and expenses and know where your money comes from and where it goes to and make sound decision about how and in what manner you spend your money by running a monthly P and L and looking at the places you spend. Do you spend $350 a month for coffee at the neighborhood coffee place? If so, perhaps that has to stop! by tracking, you can see that you actually do spend that and more.

Any debt settlement company haters....take your heads out from where the sun does not shine and if you want to debate the issues, just let me know when and where.

One of my relatives used a debt consolidation company and they negotiated with her creditors and reduced the amounts she owed. After all of the fees and the time it took to pay into the company's trust fund, She said she should of filed bankruptcy in the beginning. I used her experience to help me in my situation. I've been laid off twice in the past three years and suffered foreclosure,but my husband had managed to keep working through it all so we focused on the most important things. When we were sued by a creditor, I did research on www.mi.gov, and received free legal advice over the phone from a local non-profit which enabled us to work out a payment plan in court. The drawback is that the creditor can garnish your wages and your state taxes for a missed payment, you still accrue interest and legal fees. I was sued a 2nd time by a different creditor, I filed an answer to the court, and on the day of the hearing the plantiff's attorney did not show up. Also, at one point I stopped paying one of my car notes, and just when they were going to repossess it; I had found a job and made an arrangement. If you do not have any income it can be very difficult to pay creditors, so bankruptcy may be your best option. If you have income, stop spending on unnecessary items, and pay what you can (make a good faith effort) If possible, move in with someone and share living expenses, clip coupons, buy certain items in bulk, make food from scratch, stop eating out, go to free activities in your area, and drive slower. You'll be surprised how much you save.

I am small business oriented turnaround and restructuring consultant. The debt restructuring our company performs is based on a realistic cash-flow plan for the debtor, the nature of his contracts with creditors, his assets, his income, the likelihood of selling the company or its part, the prospects for refinancing (not good lately, but there are exceptions, e.g. factoring), and the alternative outcome for the debtor and his creditors in bankruptcy. We do such homework and from that perspective, and, yes, with certain protected disclosure to creditors which invites their confidence on a fair basis - we negotiate with creditors, generally with success. I see no reson why consumer debt restructurings, though simpler, should not follow these principles. Needless to say, all symplistic debt settlement schemes are a con job. Actually, this appears from a carefull review of their contract forms. The problem with many of their victims, including small business, is that they are worn out or lazy (or both), and look for a "simple solution", when there is none.

I joined a debt settlement company 13 months ago and I could't be happier. I of course had to pay fees which were included in my monthly payment. They have settled 3 of my 6 accounts. One account was settled at 10%, another at 42% and the last one at 50%. Thety were very honest, upfront and again I could not be happier.

I am not a huge fan of credit card companies, but has anyone ever stopped to think about why they may need to charge higher interest rates? It really bothers me that it now seems normal and acceptable to many people to only pay pennies for something you owe dollars for. The credit card companies never forced anyone to purchase items with their credit cards, but yet they faithfully send the money to the vendor chosen that the consumers committed to. The only thing they ask for in return is for the consumer to pay the money they have committed to plus some interest. If everyone would just do their part the interest rates may just stay where they should be instead of where they have been headed. How we got to the point in this country where it is acceptable to run up tens of thousands and even hundreds of thousands in credit card debt, and expect to be able to "settle for pennies on the dollar" since its the fault of the "evil credit card companies" is beyond my understanding. Do the companies need regulated? Absolutely. Is it their fault there is so much debt and is it a "right" to settle for pennies on the dollar? No way.

You morons --- The article is about Debt Settlement, and NOT Credit Counseling, they are (2) entirely different programs. The companies are right, most people prior to enrollment are already falling behind on their bills, or are about to --- And furthermore, almost all of them have called their credit card companies to ask for help, but to no avail. For those in this situation, looking to avoid Bankruptcy (which is far worse, having potentially lifelong implications), DEBT SETTLEMENT can be the best program for them. Are their bad companies out there that do not provide full disclosure, and use shady sales and advertising tactics, and then not follow through on their end of the bargain... ABSOLUTELY! However, do some research; its quite simple - check the w/ www.bbb.org, www.tascsite.org, and make sure your company is accredited, and has a certified staff through the IAPDA International Association of Professional Debt Arbitrators... You will get calls and letters, there is legal risk, and your credit score will go down, so if you have other options, I recommend them, however if this is the best option for you, it certainly can help you get out of debt in a short period of time. Remember, bankruptcy laws changed in 2005 --- I talk to people every day that can not afford a Ch. 13 bankruptcy filing, and CCC Credit Counseling does not necessarily lower consumers monthly payments, in fact many times they go up --- So, if a consumer is in a legitimate financial hardship, what are they to do, simply give up on life because there is no workable solution available to them... Please, be a little smarter and open your eyes...

How in the hell does anyone rack up so much credit card debt without being aware of it? It's one thing to lose a job or have a medical problem but a lot of these sob stories are I was just living the good life and look what happened. How do you not know what's going on with joint finances? Wake up people, get involved in your lives.

Kristen is right. I've been with a Credit Counciling company for 2 years. I had $30K in CCard debt which they (CCard company no longer in business) jack to 37% interest. The counciling company got it 9% and 2 years later, I owe less than 1/2 of my original debt. The calls stopped and ALL the fees stopped. And I only pay the counciling company $35 per month - more than worth what they did for me.

If someone is buried in debt and thinking they may need to file a BK, then yes, please consider debt settlement. There are many honorable companies and law firms available at reasonable rates.

Consumers need to understand debt settlement is not easy. Any company that implies that it's a cake walk should be avoided. Before signing a contract a consumer should check out the company-are they members of USOBA or TASC? Are they properly registered with the Secretary of State where the company is located? How long have they been in business?

Individuals should put as much thought into chosing their debt help company as they do choosing a doctor, attorney or other professional.

Debt settlement, done properly by a reputable company, WORKS. They will get you out of debt much faster than you could just paying your bills normally and you will pay back far less than you owe. You'll have a chance to 'start over' without the stain of a BK. Slowly you can rebuild your credit and you will have learned the proper way to utilize the credit available to you.

After trying to deal with my creditors without success I went to Credit Solutions. Not the smartest move, I will now admit. But being laid off, finding a job at half my old salary, and using my savings - other than bankrupcy I felt like I was sinking. Now, over 3 years later, I am still struggling to payoff my last creditor. Anyone thinking of doing this, please realise that 1. many of the settlement companies think you can either get a loan from family or friends, 2. the money you pay the debt settlement company could have gone to pay the creditor, 3. the taxes you incur really can be eye opening, 4. its not always 50 to 75% of the total balance (mine averaged to about 78%) and 5. no matter which way you go your credit score is in the toilet. AND, yes, I do look in the mirror and take responsbility for this -- never thought it would happen to me. Do we all say that!

I find it very amusing to see the hatred towards CC companies. And FYI, I do not work for or profit from said companies and do own one (1) CC which I use to a reasonable extent that I carry zero revolving balance.

Here is exactly how "evil" a Credit Card is: The Company allows you to sign up (you are not forced to sign up - it is your perogative) and use the card to purchase items using THEIR money. They are trusting you to pay this money back to them. Realizing not everyone can or will pay, they charge "interest", reflecting the risk they take in allowing you - the willing consumer - to use money you either don't have or don't choose to use at the POS.

Said interest comes into play ONLY when you carry a revolving balance (or at the moment you CHOOSE to use a "cash advance" which is even riskier for the Company). Pay off your entire debt each month - on time - and you will not pay the interest. In the meantime, purchases made are protected and other benefits (e.g. "rewards") may result.

What is evil in this? This is all about YOUR (you - the consumer) behavior, YOUR choices, YOUR ability to live within your means. Blaming a credit card as making it "too easy to go into debt" is like blaming a hammer for making it "too easy to knock out all the windows in my house". Would you do the latter? You could - it'd be rather stupid, but the tool (i.e. "Hammer") exists rather readily. So why are you blaming the tool when you do the former?

Budget your money, put off that "new appliance" purchase until you save the money...be an adult - be responsible. And yes, sometimes genuine emergencies come up and...you have to use that CC! Thank god it's there, right? Would you have gotten through that emergency if you had to rely on cash you had on hand?

People that hate these cards are hating how easy it is for themselves to become financially irresponsible - as if the hammer MADE you knock your windows out. Yes, it sure IS easy to spend money you don't have, when it seems so invisible - just swipe a plastic card. So be careful! Because these companies are in no way putting a gun to your head and making you spend.

Yeh Credit counseling works. You pay for 4 or 5 years. You do take a hit on your credit. It may not be as severe, but while you are in the program it will affect you, and for a short period after. Or you can save all your money and recover your credit a couple of short years later.

I worked for a debt settlement company for several years and I saw great success for their clients. I was actually in charge of the Department that paid the creditors and oversaw the funds of the clients. The fees were nominal and depended on the debt for setting up the accounts and the customer service and negotiations it took. If I hadn't seen it myself I wouldn't have believed it. I believe a lot of banks are the ones that fund Consumer Credit Counseling so they prefer you go that route. Debt Settlement can be a hard road but it does take the pressure off and starts really rolling. If they don't think you can make it they will tell you to consult an attorney. I'm sure not all are honest, but not all banks are honest either so you have to do your research. I left the company because I had cancer surgery and radiation, but I ended up in severe debt as my husband had medical issues as well. Because we knew how to do it we were able to settle with our creditors after getting a loan and most of our debt was settled for 50%. We had not paid a credit card in 8 months. The credit card companies will fight for your money at that point if you go in and say I have 5k to pay debts or whatever(I was about 40k in debt), but if you tell them I have a certain amount and who ever steps up first it will be settled in that order. By the time I got to the last creditor that had put me off for weeks I only had 2k left out of my loan and my debt was 5k... it was a basically take the 2k or leave it at that point.. they took it and I was done...

Has anybody used Consumer Credit of Minnesota? My wife and I just signed on to their program last night. I thought I did my homework, and they were rated high by the BBB, but now I'm awfully nervous!

PC in Texas (Sent Jun 26, 2009 8:30:41 AM):
Ever heard of writing "RETURN TO SENDER" on the outside of that mail you don't want? Send it back, or call your Attorney General for your state.

I worked for one of these companies for about two years. The total fees amounted to about two and a half months payment. All the people who stuck with the plan to the end were much better off. The problem was with the people who lie about their income or didn't listen to the explanation and read the contract of how it works. If the creditor agreed to settle for 50% of the debt, they wanted the money that day. We needed to build up the savings for a year or so to have that power. During the time you start the program until the settlement the creditor has the right to contact you about the debt. No company can stop that. Remember the people calling you are paid on commission and they are very good at scaring you to drop out of the plan and give them some money. Only hiring a bankruptcy atty. can stop the calls and this may or may not be a better option depending on how much you owe versus your income. After dealing with the credit card companies and debtors alike I can say that if you think these debt consolidation companies are a ripoff, the credit card companies are 1,000 times worse.

If you can't pay what's due, then pay what you can. Tell them, when they call, that you ARE paying them what you can and they will have to wait to full amount. WHAT WILL THEY DO TO YOU. IT'S AN UNSECURED DEBT AND THERE IS NOTHING THEY CAN DO! Then, after you have fully made it clear to each creditor that you can only pay a fraction of that, CHANGE YOUR PHONE NUMBER TO AN UNLISTED ONE. But, keep paying what you can. If you owe $200 month on American Express, pay $25. They CANNOT put anything on your Credit Report because you ARE attempting to pay. However, they may just come back to you later and reduce your balance to half that. That's another solution. Your credit report is only affected if you DO NOT PAY ANYTHING.
HANDLE IT YOURSELF, IF YOU ARE STRONG ENOUGH TO DO SO. BE SO SICKENING SWEET TO THEM, THEY WILL AGREE WITH YOU IN YOUR ATTEMPT TO PAY THEM WHAT YOU CAN. IF YOU GET ANGRY, IT WILL JUST MAKE THEM COME AFTER YOU - BELIEVE ME, I KNOW. BE SO SWEET, BUT NEVER, EVER, EVER GIVE THEM ANY PERSONAL INFORMATION ABOUT YOU, LIKE SS#, BANK NUMBERS, NOTHING!!!! They will attempt to draw money from your account and say that you gave them permission. DON'T DO IT. Do not allow them to intimidate you. If you are in a bind, be kind.

Okay listen up guys , because here are some tactics taht work AGAINST us COLLECTORs IN USA only : and for consumer collection ,as there is big difference anyway ,
Consumer collection , yeah we call you , just dont answer , or say nothing to us , as we talk to you to instill dialogue = payment

SEcond , when we send you letter , try sending one back , 44cents , you get me working and we usually you have to reply by law....

Third always send a payment , $10 on a $1000 debt seems silly to you , but that .01 percent of the debt , shows the court that you tried to send something and usually works in your favor on judgeemnt day

oOk so its judgement day , is exactly that- simply a day that the court have arranged to document your debt , and record it on your credit , but chances are your credit has already taken hits to get to this case and simply negotiating the payment of the judgement ( and i mean negotiation , as judgement is worth BUPKIS unless its paid. Forget about court fee and legal costs , that is cost of doing business in collections they know that , negotiate on the judgement.... last but not lease pay the judgement when you can , but only if they agree to remove it from your credit or at very least report it judgement paid , this will help you get your credit back later....remember this is all the "GAME of life - while juggling credit , and if people like you did not pay , we wouldnt have collector jobs and there would be no collections industry with has billions to go around ..... debt on paper is almost as good as cash when it comes to companies liabilities , so they want to have debt on their ledger books as potential accounts receivables, its the bankruptcy word that scares them , as that is YOUR LEGAL RIGHT TOO FILE that is ! good luck

No one so far has mentioned a completely legal way to deal with debts when you have no money, and no way to pay it back. This solution does take time - but it does work, though it takes almost as long as bankruptcy.

There is a statute of limitations on the majority of debts in this country. For most states, a period of 4-6 years (your state may vary) after a debt is considered "unrecoverable" by the company and is charged off, the debt must leave your record by law, and the company can't collect. If a loan collector contacts you after the SOL is concluded, you can say "Even if I owed this, the statute of limitations on this debt is up. Don't call/write me again".

This takes care of the people who find you 10 years later and want you to pay for a "zombie debt" that may or may not be valid that they bought for pennies on the dollar and hope to sucker you into paying for it when it's expired.

The exception to this is student loan debt and federal income taxes - that never goes away from your credit record but can be settled if you contact them.

Has anyone ever considered a little self control. Maybe if you could control your spending you wouldn't put yourself in the situation where you need any of these services. I work in the credit industry and as far as I am concerned, people who do not pay their debts are no better than a bank robber. That is essentially what they are doing. When you stop making payments on your debts you are stealing from the bank who loaned you that money. Did you ever think of giving the bank that new flat screen tv you bought? Of course not! Also I am sick of hearing people complain about how interest rates. If more of you idiots would actually pay your debts there would be no need for high interest rates to compensate for the large group of debtors that do not pay. By settling your debt for far less than you actually owe you are only making things worse for yourself and everybody else.

Everyone's credit mess is unique, and it's hard to apply one solution to all. Some need some sort of short term fix, others a long term fix, such as a Chapter 7 bankruptcy. Either way you go, your going to take a credit report hit. I've personally had 2 Chpter 7's over 15 years due to health expenses. They helped me get a clean start. But, regardless of reason, my credit is still pretty bad. And, the sad part of using debt settlements companies, is that your credit will still be bad when you finish, if you do. If your in a mess, your going to have to figure what's best for your personal situation. Maybe talk to a credit counselor, or lawyer, but I'd avoid the debt settlement people. Anyone trying to make dough off your mess isn't going to be acting in your best interests. Keep in mind that you probably can do what they do on your own, and much quicker, simply by researching then taking on the creditors yourself. For example, most states have statute of limitations on debt of three years. Meaning, they creditors can't sue you in court for the debt. They will, however, leave the debt info on your credit report. Some, a lot, will even leave it there when you settle the debt. Don't let your emotions carry the day here. Take a business approach to this, and do the best you can for your own situation. Go on the Internet, and research. It'll help. But don't run to settlement companies. It's like paying someone to cut your lawn, when you can do it yourself and save money.

i wonder how many testimonials here originate from the companies themselves.

scorched earth for banksters and coporati loan sharks!

To LJ Stevens Point, WI
I suggest you pay your bills and then move to Iran.
We don't want you here

LJ Stevens Point, WI
Conversely, where was Big Brother Bush while all this was going on? Obama's only been in office five months, for heaven's sake - why do you post how stupid you are? Where was any oversight of these rogue thieving companies for the past umpteen years?

Aaron - Davenport
Congratulations !!!

Credit Counseling is the way to go. I got divorced and ended up with 135K in debt. Overwhelmed my income. Was living hat to mouth for 2 years and had enough. Ended up going with CCCS of Nevada. Paid $10 monthly fee and they got all my debt into 1 payment. They did well with my creditors all but Capital one lowered my interest rates to the single digits and a couple that I had 2 cards with made the interst on one card 0%. Long story short 5 years later 0 debt. Credit rating did take a 7 year hit but I was still able to get a car loan however my interst rate was 3% higher than the best rates out there. Best of luck all...

Glad I read this site----I had many questions about these companies and I think I found out just what I needed to know! I think I'll take my chances and try to settle my own debts!!

I have found companies looking to work for the consumer and not the banks. http://www.nytimes.com/2009/06/10/business/10debt.html?scp=3&sq=debt%20settlement&st=cse They had a conference in Chicago recently. Also when I did my taxes I countered the banks 1099C with tax for 982. Ask your tax professional for help in fighting the unfair 1099C. Truly how much money do you pay back before its paid back?

This article is obviously an advertisement for debt consoilidation, notice they have a link to a debt consolidation company in the article! Debt Settlement is a tried and true practice that will eliminate debt. To suggest that someone with 20k in debt and an income should file bankruptcy is an ignorant statement. Debt consolidation will typically raise your minimum monthly payments, if you're already struggling to pay your debt how can you justify raising someones minimums? if you can afford to pay more on your debt why would you pay someone a fee? Why not just pay that money directly to your creditor? This is exactly what a judge will say if and when your debts go into litigation or you try and file bankruptcy. If your struggling to pay your debt on your own paying a higher minimum to a debt consolidation company will only make your situation worse and eventually you'll fail in the program and will be worse off and the money you spent will be gone. With Debt settlement if after 1yr or 2YRS OR 5YRS you decide to leave the program the money in your special purpose account above your fees is your money. A client can take that money and make lump sum payments on his cards on his own.If you stick with the program you will be debt free faster and at the lowest outlay in cash to the struggling debtor. If you cannot afford to make you minimum monthly payments on your credit cards you cannot afford debt consolidation. If you can afford to make higher payments than your minimums you should just increase your payments to your creditor and eliminate the debt faster. If you're working, and fell behind on your debt, can't afford the minimums but really want to pay off the debt,Debt Settlement will allow you to pay you debt and move on with a clean slate. if you do sign up for a program that is 36 months long anticipate it being successful in 36 months not 3. If you have any question about the debt settle ment process email me Don Sadler dsadler@unitedattorneyservices.com

"The vast majority of those consumers could work out their own arrangements with lenders, it said."

All consumers could work out their own payment arrangements or settlement options with their creditors, without debt settlement companies or attorneys. Given the fact that the credit card industry is dealing with billions in past due credit card debt and millions behind on their payments, they are more willing than ever to work directly with you.

"After receiving nothing for many months, the settlement companies say, lenders will be happy to take a lump sum payment for far less than the total debt. Sometimes, it works."

More often than not, it works quite well (and you can do it yourself). Usually, it is not a matter of whether or not they accept a settlement, but rather how much they are willing to settle for in the end.

Most debt settlement firms get a standard 50% off on their clients debt...assuming that they pay it off lump sum via a wire transfer. But you can do the same thing yourself without having to pay a middleman.

But if you are a good negotiator (or good at poker), and have nerves of steel, you can blow off your creditors for at least 120 to 150 days without paying a dime or talking to their collectors and reap the rewards. When I say "blow them off", that means you ignore the never ending phone calls and collection letters. If you can play the game with a straight poker face, it's possible to settle your debt for less than 50% of your outstanding balance. But you have to go at least 4 to 5 months without paying or talking to your creditors, and have enough cash to settle your debt LUMP SUM. That is the key. If you can't do that, then make payment arrangements with lower interest rates or see if you can go Chapter 7. Also, if you plan on settling with your creditors, don't wait more than 6 months or 180 to start negotiating. If you do, the debt will be charged off. If that happens, you will have a double hit to your credit. The charge-off from the original creditor, and another hit from the collection agency.

If you don't care about your credit score, however, waiting until the debt is charged off may be your best option to get the lowest or best settlement offer. Charged off accounts typically sell for a nickel on the dollar in the open debt market, often bought by collection agencies and attorneys in bulk.

BTW: There is no guarantee that all creditors will settle for half or less. Many subprime banks/credit card companies will not settle for more than a fifth to a quarter off of your outstanding balance (with lates fees & higher interest added onto your acct.). If your balance is high enough, the creditor may try to collect through court action if you don't pay. This is especially true if you own real property or have a lot of assets that can be attached through a court judgment. Liens can be placed on your vehicle(s) and home(s). Regardless, you have to play hardball with your creditors or you won't get a good deal either way. Bankruptcy is the easier way to go!

What about the TV stations that play their ads? Don't they have any responsiblity to check out the companies that are advertising?

I was in a Credit Counseling program for over 2 years when the rep that worked for them left and went to a debt settlement company. He called me and told me this program was so much better. I was in a 5 year program with Credit Counseling and with a payment half of Credit Counseling's the Debt Settlement Company got me out of debt in just 18 months. I was amazed and thankful so not buying this article at all. Maybe some bad companies out there but the company I went with was awesome!

Yo, hasn't anyone heard of CHAPTER 13 bankruptcy? It is not the "erase and start over" that most people think of; it's more a personal reorganization and payback at cents on the dollar.

I did it ($15,000 debt and no assets but a 20-year old car and a failing marriage) and three years later was able to obtain a mortgage and two credit cards (which I pay off every month). My FICO score six years later is above 700 and I sleep well at night.

There is no magic bullet; putting yourself back on your feet takes work; if something sounds too good to be true, it probably is. But it IS possible.

Yes debt settlement companies are bad for the BANKS. they make the banks accountable. Do you think these banks don't know what they are doing to people. As an owner of a settlement company I talk with people that are in dire striates. for instance an 80 year old lady on fixed income with $50,000.00 of CC debt. I sent her to a bankruptcy attorney.

Not all of the apples in the cart are bad.

Did you know that there is an association called TASC that is an advocate for consumers that works with settlement companies.

CCCS companies are in bed with the credit card banks and get paid by these companies.

My clients realize a provable 52% overall savings of their debt.

I think that you are a fear monger. There are bad apples in every industry. How about Bernie Madoff for another industry.

Ken Silagy
President
Dollar Sense

Everything they are charging for is something you can do yourself. A friend of mine told me about a free website that helps you settle on your own and so far so good (isettledit.com). These companies are ripoffs in the worst way. They don't care how broke you are they just want whatever money you have left.

debt settle ment does work. i have been in a program for just 1 year of a 3 year plan. they have already settled some of my debts for me at reduced rates. as far as working with the credit card companies. i contacted them about 6 months before i entered the program i am in. they all said the same basic thing to me, i owed the money to them and they were going to get it one way or the other. i pleaded my case to them and explained i had gotten sick and couldn't work any more. i told them i was on disability and wanted to pay off my debt but couldn't afford current payments. they all were very nasty and didn't want to negotiate with me. it wasn't until i was in the program for 9 months and settlement offers were sent out that they then wanted to work with me. i was much nicer to them when i said to late deal with the company representing me. if they would have worked with me earlier when i contacted them i would gladly have paid directly to them. i think the credit card companies should be made to negotiate with down and out card holdres. i have read about cases where they hounded customers so much the committed suicide. yes there is a problem but the credit card companies did nothing to help their customers.

It amazes me that this article didn't even try to get people to be responsible for thier actions & pay what they owe. Ever hear of a "debt snowball"? How about living "debt free"? How about forgetting about what your credit score is & isn't & pay CASH for everything? Greed got most people where they are in thier financial mess. Spending like the credit card has no limit, or thinking that it's all someone else's fault that they didn't understand the fine print...quit whining & be responsible..... Wise up America! Pay as you go, don't finance your future. Be debt free. Follow the Dave Ramsey way!

Sam

I used a local debt settlement company that helped me with over $49000 in debt. I was very sceptical at first but they showed me that they were a member of the International Association of Professional Debt Arbitraitors and were certified as debt councelors.Most of the other companies I spoke to seemed to have no clue how the settlement program really works. The local company I signed (SDS) up with had attorneys that contacted my creditors and have already settled 2 accounts and it has only been 7 months. I did not expect a quick fix as it took me years to get in to debt i figured it would take 2-3 years to get out. So far my experiance working with this group in Huntington Beach, Ca has been great. They explained everything to me accuratly prior to ebrolling and everthing had been going according to plan. I am even sending in and extra $200 to get things paid down faster. Like many services available you can probably do on your own. Some service are best left to the professional. My suggestion to other consumers is do your homework and make sure you are workign with a professional company that is qualified. If you don't know how to research this then then you should probably never use another credit card again or sign a mortgage.

Someone commented above about New Era...I'm using them too and am very satisfied with what they've helped me with so far...settled a $25K BofA acct for a little over $5K. We're now working on other accts. They were VERY up-front with risks and benefits, did not make outrageous claims regarding their abilities to settle debts, were candid about the impact on credit as well as of the fact that some companies might not want to settle. Their up-front fee was actually quite small, and reserves are kept in trust for when settlement is possible...and only after they settle an account do they collect their percentage. The are always there to answer questions and outline their costs in detail, both verbally and in writing (in fact, all terms are spelled out in minute detail both verbally and in writing from day one.) They are members of TASC (The Assoc of Settlement Companies) and send you TASC's code of ethics with the original paper work. Yes, my credit has taken a major hit for several years, but with no end in site trying to pay off over $85K of debt racked up on credit accounts (mostly all went to pay off medical crisis...no ski vacations to Aspen or anything like that) my credit would have been dead for several years to come anyway. They also provide additional consumer resources to assist with making sure your rights are protected and collection companies adhere to state and federal collections statutes. By the time my debt is resolved, it will have been about a 3 yr process. Plus, it only works if you stick with the plan...provided you are working with a legitimate and ethical company.

I contacted several of these companies. Each one sounded like a scam that would only leave me in a worse mess. I finally contacted an attorney, one that didn't advertise debt settlement, I was charged $300 flat fee and my debts wound up being settled for %52.

I have been working with Credit Solutions for a year now and I had 6 credit cards totaling 15k in debt and within this first year i have paid my fee to CS, and paid off all but one card for an average of 1/2 the total amount. I have one card left and with any luck that will be gone at the end of the year. So far so good and they have helped me more then the credit consolidation i did prior to that.

Greenpath is a great credit counseling program. They just helped me pay off 22 grand in debt. Their fees are 50 a month but they saved me much more then that over the course of 3 years by lowering my interest rates. I paid $680 a month for 3 years and now am free of debt. Greenpath is not a settlement company. They help manage your bills and negotiate lower rates for you. Very legit company. Highly recommended. My score is up 200 pts from 3 years ago. Couldnt have done that with a debt settlement company.

I also have worked with "Freedom Debt Relief" aka "Freedom Financial Network". The service they provide best is absorbing all the phone calls and letters that you would be sent otherwise. Their negotiation skills are crap.

I was in serious deb trouble about 10 years ago. I looked into these services and realized with a little research, I could do everything on my own. I did, and now everything is cleaned up. There is no need for these people if you are able to to a bit of reading.

I wonder if the govt. is focusing on these companys now that they own Citi and B of A???? Also I wonder how the trial lawyers lobbying firms feel about people atually paying a portion of their debt off rather than filing bankruptcy and eliminating the need for a bankruptcy attorney.

Isn't it more honorable and morally correct to pay something rather than nothing? I think it is.

There are bad companies everyhere & in all fields. why should a few dishonest businesses cause the entire industry to be restrictd.

And if so why not the banking /fiancial industry then?

Guess what I owe credit card companies? zero, car payments? zero. cash? 120,000, house net 125,000, land worth 750,000. Do I own a new car? no, 1999 Chevy express, 2001 Grand Am.

Folks, quit charging and live in your means and you won't be a victim. I realize that health problems are tough. Get with a company that has insurance, save money, drive a used car.

I know this may not apply to everyone, but I see folks, young , driving Lincolns, Lexus, BMW, Jaguars.

I use Debt Free Financial Group and am VERY happy with the service. You must do your homework and understand the process and the agreement you have with them, but they are settling accounts for an average of 40 cents on the dollar and I can ALWAYS get in touch with their customer service.

I think this article is irresponsible to blanket the entire industry based on a few bad apples.

I signed up with a non-profit credit counseling service. When I shared this fact with a friend in the credit industry he warned me that my credit score was going to tank. Indeed, a month or two after joining the service I dropped fifty points. Happily, after paying at reduced interest rates for a year, my credit score was at least 25 points highr than it had been. I think my good experience came from the fact that I had done a projection and foreseen trouble coming. I signed up for the service before I was delinquent in any accounts and I think my credit score going up reflected the fact that I took control before it all fell apart. Losing use of the credit cards I now have paid off was the iciing on the cake. Now I use my debit card online and search for bargains instead of living on plastic. Life is better. Now when I want to make a big purchase I sell things I no longer use on eBay or Craigslist and then make my purchases at a discount using the same services. It's so much nicer to make me rich rather than the bank.

This is someones opinion. I was successful in completing my debt settlement program. I had 45K in credit card debt and was completely out of debt in 36 months as stated by the company. I am sure there are scams out there but not every company works the same way.