Query by Clueless in NY: Poor debt, Really should I retain the companies of Credit Options?
I am in a hole of horrifying debt. So in an try to do something about it, I am retaining the providers of Credit Solutions. Only a single difficulty, I”ve been with a debt settlement firm just before and they did absolutely practically nothing! Only explanation I’m going with Credit Options is because of the positive media feedback they have received. Now the query is, if I go with Credit Options, will my credit improve? Everyone got any evaluations on this company? Need some severe advice please!
Ideal answer:
Answer by mysery0125
Why pay out somebody for some thing that with a little effort you can do by yourself. You can contact your creditors and negotiate issues on your personal. Try out to negotiate reduced interest prices. If you have collection(s) then negotiate settlements or payments. The only issue these credit service businesses do is combine all your payments and charge you money to do it. You finish up having to pay much more via them. They are all huge rip offs!! Do yourself a favor and attempt factors on your personal 1st. If all else fails then do what you have to.
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What you need to know about debt settlement firms:
Your credit card companies are not going to offer you settlements like 50%, for example, if you are current (not behind) on your payments. If credit card companies offered settlements to people who are current on their payments, then everyone would be calling them up and asking for 50% settlements. Basically, the only way you can get into a position to negotiate settlements is to deliberately let your accounts go into default. This is exactly what debt settlement firms do….They take a monthly amount from you and use that to build a “settlement” account, which will go towards paying the “settlement” at a later date. Whatever monthly payments you make will go directly to the debt settlement firm for their fees and your settlement account. All of your accounts will go unpaid and your creditors will not be happy about this.
If you are current on your accounts, this process will ruin your credit rating as your accounts will all go into default. Your creditors are under no obligation whatsoever to accept settlements from any debt settlement firm you hire. Their response might be to serve you papers and take you to court.
Debt settlement “can” be a viable alternative to filing for BK….you just need to be aware that if you currently have good credit…the debt settlement firms will deliberately let all your accounts charge-off/default to put them into a position to negotiate settlements. It can be a stressful and unpredictable process….As your accounts all go into default…you will get increasingly aggressive collection calls from debt collectors. It is “typical” that creditors offer settlements for defaulted credit card debt….They often do this in lieu of loosing everything if you file for BK…..
HOWEVER, you can never predict how any one creditor will respond to defaulted debt. They might decide to take you to court and get a judgment against you. Debt settlement firms have no power whatsoever to stop creditors from taking this action and they have no power to force creditors to accept settlements.
****If you have already defaulted on your cards….make your own settlement offers…you can do this on your own and it puts you in control. If you do…get all settlement terms IN WRITING PRIOR to paying them.
Regardless of which firm you use (or if you do it yourself)…the act of deliberately defaulting on credit cards to force creditors to accept settlements can be an unpredictable and risky process. If you can live with the risks involved, then continue with the program.