Help, I am thinking of entering into a debt settlement agreement, should I run for the hills

[terip64]

or do you think this is a viable option. I feel as if I am running out of options. Any advice would be appreciate.

[ejpoeta]

1. how old is your 'debt'? secondly, are you dealing with the original debtor or

a third party? i ask this because, after a certain amount of time, they cannot go after you. i think it's seven years in ny. and if you pay them anything it resets the clock. if it's third party, i would make sure that they have proof that they have any right to collect any debt. ask for verification, and by that i don't mean a collections bill. i wouldn't pay anyone anything unless you are sure they have a right to collect anything. if it is the original creditor, and/or you are sure that they have a right to collect anything, and you want to take care of it.... you want to make sure that any payment or settlement includes reporting as paid in full on all of your credit reports. they won't usually fix your credit report unless you make them. good luck.

[terip64]

2. This is all current debt, we are not behind on anything and my credit score is decent

I just know I can't keep this up. We are running a deficit every month and using our CC as a life line. I need to do something fast and don't want to go bankrupt if I don't have to. I am scared to death. We had a huge income reduction and I can't find a job.

[ejpoeta]

6. well, i know my sister ended up getting a consolidation loan. i don't know

what i think about that. I think i would go to a consumer credit counseling place that can help you with your debt. They can help you with a budget. You want to watch out for the tv folks.... many of them are bogus and there is a lot of fraud going on with people saying they will help you and then taking money and never taking care of the debt. the main concern is not making things worse by ending up with one of the bad ones. here is a link to help choose a credit counseling service: http://www.kiplinger.com/columns/ask/archive/2006/q0306.htm. Consumer credit counseling is pretty much everywhere. i have heard they are very reputable. http://consumercreditcounseling.com/ just do your research to make sure you don't get scammed. good luck.

[terip64]

9. Thank you so much. It is a sea of god knows what out there. I appreciate the links!

[ejpoeta]

12. not a problem. i would just hate to see someone end up getting screwed by the

sharks out there who prey on people who are just trying to get back on track. especially if you already have decent credit. those scammers out there don't care who they screw over.

[Nay]

3. I took my brother to a good CPA, one who knew the ins and outs

of IRS and debt stuff. It cost about $400 to get some very good advice. I realize you may feel you can't spend that money, but it was well worth it in our case.

[terip64]

8. That is what we are starting to think. I don't want to spend the money but I can't afford any

mistakes. There is no wiggle room.

Thanks

[HillbillyBob]

4. Also MAKE SURE they are up and up, check Better Business, tho they may

not have anything on them. But also check and see if they have any law suits against them for fraud.
A lot of these guys are fake and also no 'membership fees' google them up and see if there are bad reviews. I have heared about folks that end up in deeper trouble because these guys charge them for doing this then collect your $ and never pay the originating creditor.

[terip64]

7. That's what I am afraid of. They are rated B at BBB but are one of their offices is on FL

which I read doesn't regulate these businesses. I am going to call a local place I found last night online that is rated a+ w/ the BB. I don't think they do these settlement deals though.


I need to run to an appointment but I am going to check back in this afternoon when I know more. I am really scared but I know I have to do something. My house is worth half of what I owe and I seriously don't know what is going to happen. This shit can't go on.

Thank you for your help. I can't tell you how much I appreciate the help!

[Double T]

5. Beware of crooked debt settlement companies that will fee you to death.......

and provide fair to poor performance. Make sure YOU get all terms and conditions in writing so that YOU don't get stuck with reoccurring hidden additional fees. Checkout ANY debt settlement company thoroughly BEFORE you engage them to do your work. Often times YOU can make your own debt settlement arrangements directly with the credit card companies settling for as much as 60% off what is owed. Do lots of homework and research BEFORE YOU enter into ANY arrangements with anyone.

[snappyturtle]

10. Is the company doingyour debt settlement asking for a fee for their services?

My daughter is involved with Fast Debt Solutions.....v-e-r-y bad deal....they took her money and did next to nothing and now she has accrued interest on her debt! She tried re-settling privately and got no where so she turned to this company and as a consequence owes more than when she started with them in July 2006. Be careful.

[NYCGirl]

11. I did that to pay off $50,000 in business debt. It took four years and

some of the creditors settled for less than 20%. I don't think I could have done it without the debt settlement company I worked with -- they were great.

Note: None of the credit card debt was "active". If they are current accounts, you'll have to close them.

[Liberal In Texas]

13. Get ready for lousy credit for SEVEN years.

It will probably be impossible to get a home loan in that time and next to impossible to get any decent credit until it falls off your credit reports.

Don't do it unless bankruptcy is the only alternative.

[terip64]

18. I think that may be where we are. Scary shit...

We are in MI and owe twice as much on our house as we can get for, if we could even sell it at all. We have worked so hard to find ourselves in this place. We made mistakes, that's for sure, but we have always worked hard. We bought an old farmhouse that has seriously been a money pit.

Live and learn, I guess, I hope...

[Liberal In Texas]

21. I wish you luck, and a lottery win.

[terip64]

23. Thanks. I know I am not as bad off as many. My husband has a job. We'll get through this. n/t

[serrano2008]

14. Get the settlement in writing and pay with cashiers check.

Then make copies and keep them for the rest of your life so the collectors never show up again wanting this money. They probably will at some point, come along and say you didn't pay it all, so you'll need copies.

Also, you may want to listen to Dave Ramsey on the radio for a few days before you do this. Similar situations will probably come up and his advice for getting out of debt and dealing with collectors is priceless.

[backscatter712]

25. Agreed. Get it in writing.

I was able to settle an old credit card debt with a bill collector, and saved a couple thousand dollars that way. It felt damned good to not have that hanging over my head.

Get it in writing, make sure once it's all said and done, you have an agreement that once you pay the settlement, you no longer owe them another dime.

[Romulox]

15. My basic understanding of most debt consolidation schemes:

1) You send your bills to the debt consolidators (you do not pay these bills while in the program)

2) You send the funds you would've sent to pay those bills to the debt consolidator.

3) The debt consolidators do not pay your bills with this money, but instead "bank" the money for 2 to 3 months.

4) The debt consolidators use this fund they've amassed to offer cash settlements to your creditors (who are free to refuse)

5) Debt consolidators take some of the fund they've amassed on your behalf as profit (or operational expenses, if non-profit)

One thing to be 100% clear on:

If you had great credit before debt consolidation, you likely will not afterwords: you'll will have (at minimum) 2 to 3 months of negative credit reporting for each of the accounts you ask the debt consolidation company to handle. Also, this is an entirely voluntary process, so some of your creditors may accept the settlement offers, and some will likely reject them.

All in all, debt consolidators are an iffy proposition, imo--one that is guaranteed to harm your credit, but not guaranteed to resolve your indebtedness. Caveat emptor!

[AB_Positive]

16. Definitely check Better Buisness for this stuff...

My research showed Superior Debt Services was pretty good for what you're getting - great BBB score (with over 250 responses) and unlike even other more reputable services they work on your credit score afterwards. It won't be great but it will be serviceable. Also - via their agreement which is agreed on verbally and in writing you have complete access to the bank account created for the settlement purposes. If you cancel they are required by contract to give all the money back - including any amounts being held aside for fees.

They're based out of Colorado, which as far as I know has regulations as opposed to Florida. They've been quite helpful with me and the only people I hear from now are American Express - who are right mean about everything. Hell, one creditor even gave me their contact info to give them.

Debt settlement is scary, and there's a LOT of scammers out there. I went with research and chose one that does NOT advertise, radio or television. National advertising is too expensive for a non-profit debt settlement company to afford and keep their fees low if they're on the up and up. At least that's how I logicked it out.

[juno jones]

17. A bankruptcy lawyer is a good source.

Usually the first visit is free. The guy we had broke down all the options and referred us to several credit repair/ counseling places.

[onethatcares]

19. whatever you do, do not give them open access to your checking

or savings accounts. No pins, no nothing, everytime you have to make a payment, do it online as a one time deal.

[terip64]

20. Thanks. Of course they want the payments to be deducted right out of my

checking account. We are going to take some time to really research this.

[Canuckistanian]

22. Try and get Bernie Madoff's lawyer

Sorry.

Seriously, though, try to get a range of opinions from a few knowledgeable people. And HAGGLE.

They want it settled as much as you do.

[SmileyRose]

24. If you have any doubt in your head - STOP!!

You either don't have enough info on this particular service or don't have enough information on this option period.

I learned a long time ago to listen to the discomfort in my noggin.