WHEN SEtTLING MY DEBTS..SHOULD I TRY TO INDIVIDUALLY HANDLE EACH CREDITOR OR SEEK CREDIT COUNSELING?

Question

im about 9k in unsecured debt with about 5 different creditors

Answer 1

STAY AWAY FROM THE CREDIT COUNSELING! Non-profit - for profit - its all the same! The credit counseling will pay off your accounts and close them with a mark saying consumer credit counseling. I have had lenders tell me they look at it worse than bankruptcy.

Call the 5 creditors your self and negotiate. They'd rather hear from you anyway. Let them know you are trying but need lower interest or a settlement on the account (that will affect your credit but less then the credit counseling!). Try to start with the accounts in collection or highest interest. Be prepared to pay accounts completely not make payments. You may have to save up some money to send in a lump sum.

If you have accounts in collection send a certified cease and desist letter so that it can stop the annoying phone calls until your ready to pay.


Have patience...like someone else said it will teach you responsibility with the cards. Don't feel like you should never use credit again - instead use what you are learning to not end up in the hole : )

Best Wishes!!!

Answer 2

Hi,
My suggestion to you, coming from someone who worked at Discover Card for 5years. Is that you handle them individually. If you seek counseling it's going to damage your credit like a Bankruptcy which most people don't know and they don;t tell that. They only tell you they can get you a lower interest rate. But they shut down your account & put a bad mark on it. It's better if you explain your circumstances to each creditor & see if they have a program to fit your needs. Most of them do you just have to ask...Some of them can boost your payments to the end of the loan.

Answer 3

I would talk to each creditor individually. They may offer a lower interest rates, payment plans, or a settlement. It takes a little longer, but it'll likely save you some money. Also, it will help you to learn the lesson to never charge up credit debt again.

Answer 4

Get yourself round to Citizens Advice and get some professional advice.
http://www.citizensadvice.org.uk/

(edit: note I suggested CAB and not 'professional' advice from shysters playing at loan experts )

As these things go, unless loan sharks are involved, £9,000 isn't a great deal...

Easy for me so say while I'm not the one who's **** is twitching everytime the phone goes, the postman arrive or there's a knock at the door.

But, regardless of the amount, it's how you are coping with the stress of it all.

Banks will, of course, be very understanding - while yanking the rug from under your feet and cancelling your overdraft. Credit cards companies and more understanding and, depending on circumstances, some will consider freezing the interest - especially if it a choice between all or nothing.

I could, but won't go on in depth about the pros and cons of IVS vs Bankruptcy vs struggling to pay multiple debts, but I won't. People can't give that advice without knowing your circumstance.

Answer 5

Seek credit counseling, but start with a non-profit organization rather than a for-profit company who will try to make a small profit out of you.

Call the American Consumer Counseling Center - unlike a lot of those "debt solution" places, this is a non-profit and won't take your money. They can help you figure out how to consolidate your debts.
American Consumer Counseling Center
http://www.consumercredit.com/ or 1-800-769-3571

Answer 6

Watch the typing in all Caps, it sounds as if you are yelling.

You should deal with each creditor individually. Bring the accounts current, build a debt snow ball and get out of trouble.

Get out of debt, stay out of debt.

Answer 7

I think you should do both. You will need to contact them individually anyway, even with a credit counselor. Look at several credit help sites on the internet so you can see the tips and things to watch out for.

Do not pay a counselor for help. You can receive the help you need free, preferably from a reputable bank, or credit union. The only fee you need to pay is the credit union membership.

Answer 8

how much do you have on one card? is it evenly pread over nine creditors, or mainly on one or two?

if the former- Credit Counseling Agency.

if The latter- negotiate with the two large ones, and keep the rest current and in good standing.