How much did/do you have to pay for debt consolidation??

Question

I'm seriously considering working w/ a debt consolidation company, and just wanted a rough idea of how much ppl have paid or are paying... and how long it took you to get out of debt?? any answers are helpful!

Answer 1

I dont know your situation but I looked into it last year - from the broker who just wrote my mortgage and he strongly discouraged me from doing it.

He said it's almost like declaring bankruptcy in a sense that these companies negotiate with your credit card companies for lesser payments on whats owed and often the accounts get closed.

If you can consolidate on your own - transfer balances to a card with a lower apr, or if you have a home, take out a home eq loan or line of credit, those are better options.

However, if you do go ahead with the debt consolodation, you could save as much as 50% a month and have an end-date in the payments.

Answer 2

STOP, STOP, STOP... You should not have to pay for debt consolidation. You have to be very careful of who you are going to use if this is a route that you are going to take.
First off, it shows on your credit as debt consolidation. This is a huge RED flag to Lenders. If this is something that you are really wanting to do contact an Attorney first. If your debt is to high there could be other options. If not there are still other options to help. I have seen so many people hurt instead of being helped in this situation.
For example you pay $200.00 a month to the Company to pay your debt. There is a fee that is included that they take out so that they can divide your payments and send them in for you. In most times the fee that you are paying them adds up to the interest that you are already paying on your debt.
If it is collections that you are working on, there are many different steps to this. They say that you can save money in the long run it hurts you more then helps, it looks as if you can not handle your finances and have to have someone do it for you. Then if you apply for new credit after the fact, some lenders can keep you from getting this until you are 6 months to a year out of counceling. OUCH !!!
Again if you feel this is something that you must do, check fully into the Company. Go to BBB.com in your state and check their rating out, if you do not see them listed, be careful. And if you do, still be careful, there are debt advisers out there that are good from what I have heard.
I work for a Lender and hate the fact that people are told that they have to pay a Company to fix there credit when in truth they can do it themselves for free.

In this business I have seen many people actually pay to get it fixed and the creditors never get paid, then it falls back on the debtor with more money due.

Answer 3

It took us almost 3 years. It cost 78% of the total debt (at the start), which means we only saved about 22% -- too much of it (in my opinion) fees to the debt solution company.

Court action was taken against us. We settled out-of-court with great help from the debt solution company, but a possible judgement was too close for comfort.

I still ended up taking out loans from other sources (that you might not have available) to get the whole thing off my back (including the court action). I'll be paying THOSE off for another 3 years.

Sure, I don't have any 'bankruptcies" on my credit report, but I do have a bunch of "severely delinquent" notes, and, "Settled, but not for the full amount", notations. My credit score is a whole lot higher than I would have expected, but not stellar by any means.

Oh, yeah -- any debt forgiveness counts as income on your tax return (possibly -- I still have to figure that one out for sure). So, if you have a debt forgiveness of $10,000, that's an extra $1500 - $3000 tax liability. I hope I am wrong on this one.

Over all, I would not go through it again. I would get credit "counseling". Those guys can negotiate lower interest rates.

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Answer 4

A debt consolidation company will allow you to make minimum monthly payments. But your principal amount will not be reduced. They basically work for the benifit of your creditos, not you.

I suggest you to join a debt settlement company who will negotiate with your creditors and bring down your principal debt by around 30% to 70% depending on your credit companies. You can make affordable monthly payments and get out of debt within 36 months. Do you know how long it will take to be debt free if you go with a debt consolidation company???

There will be no upfront fees, and hidden costs asociated with the monthly payment options.

Check out this debt settlement company who has helped me with the unsecured debt situation.

http://www.debtfreeafterall.com

Good Luck

Answer 5

You should opt for debt consolidation. When you gets into a debt trap it becomes difficult to get out of it. Taking more loans to repay the debts leads to more stress and financial crisis. Finally, there is no option but to adopt debt consolidation, which leads to a new llease of life. Many people receive abusive calls from debt collectors and are stressed. Hence opting for debt consolidation is the number one solution and helps to overcome abusive calls and be free from mental stress.

Answer 6

go to your bank.
you should pay zero dollars and zero cents.
dont pay someone. you really should consider doing it yourself, and not have a debt consolidation on your record. i hear it makes things worse, like you cant handle your own finaces, and need help.
make a budget and stick with it, and your creditors will let you make payments, they have to, or if you have enough money to pay off one thing entirely, call that one place, and make a deal to have them reduce it by as much as they can for you to pay it off in full, sometimes they can go 30-50% off the total.
but you do not pay for a company to haggle on your behalf.
do not pay. its a rip, you or your bank can do this for free.