2006-10-19 07:53:35 · 5 answers · asked by Becky 1 in Business & Finance ➔ Personal Finance
i used a cccs (a consumer credit counseling service) a few years back i was 19000 in debt to various credit cards and loans. i did not have a bad experience with them, nor was my credit ruined. you do have to be careful in choosing a company. be sure that it is not a consolidation program, but a credit counseling service. The counseling service contacts each of your creditors and compromises a payment plan with them. The amount you owe will not be reduced, but they can usually reduce the interest rate, and get the company to forgive any over the limit fees or late fees. You will make one lump payment to the cccs, and they will then distribute the payments to each of your creditors at the compromised payment. they ensure that your payment is made on time each month, (as long as you are paying them on time) and your credit score improves as your payment history improves and as your debt to income ratio goes down. They do charge a service fee- usually $9-15 a month for the service, and you do have to cut up your credit cards and agree not to open any new accounts during your program, but it is worth it to get out of debt. as you pay off one creditor, your payment tot he cccs remains the same. they take the excess and apply it to the next creditor you have in the program, you wont believe how fast your debt will diminish.
2006-10-19 23:44:34 · answer #1 · answered by atyrdmom 2 · 0⤊ 0⤋
First you sign up and start sending them $$ to pay your bills. They do not send any $$ till your accounts go to charge off status. Then they TRY to make a settlement on the account for less than the full balance. At any rate your credit is trashed. All future lenders will view this the same as a bankruptcy Chapter 13 since you are re-organizing your debt. You are just as well off to file the Chapter 13 wage earner plan and get it over with. Then you at least have the protection of Federal laws. The Trusty pays your bills for you under the plan and you will stop ALL revolving interest the date of filing. This is something the CCCS will not tell you. It is generally cheaper to do the BK13.
Good Luck to you.
2006-10-19 08:13:10 · answer #2 · answered by golferwhoworks 7 · 0⤊ 0⤋
Consolidating debt is an ideal way to reduce your amount and tenure of debt. You make a single payment to one lender on a certain date and this will help you clear off the debts faster.
2006-10-20 01:24:54 · answer #3 · answered by sing i 2 · 0⤊ 0⤋
they call all the companys that you owe and set up an amout of money that they will send them each mo out of the money that you have to send to them. i don't see how it helps with your credit just makes the amount that you are spending out a little cheaper and thats if the company that you owe acepts the amout that they want to send in
2006-10-19 09:41:55 · answer #4 · answered by stacey r 2 · 0⤊ 0⤋
Don't use a "for profit" company. Their goal is to extract your money for themselves as a fee. Go to a NONPROFIT agency they are around. Thats the only way to do it.
2006-10-19 07:55:47 · answer #5 · answered by Anonymous · 0⤊ 0⤋