Choosing a Debt Settlement Company

[jdul]

What is the name of your state? KS

We were laid off from jobs several years back and that - combined with medical expenses led us to a uge pile of unsecured debt. At this point we are trying to avoid bankruptcy and are seriously considering using a debt settlement company to do so. I have read the books and the websites and I know that they say - don't pay these companies to do for you what you can do for yourself - but if they can settle for 40 cents on the dollar - then even with their fees, we're still at something like 52 cents in the dollar - which is probably better than I could do myself.

My question is this - if we do have to go with one of these companies - do you have any recommendations/warnings? I read on an earlier post of a person that was having pretty good luck with Credit Solutions of America - but I also see that they were listed on the "do not use" list of a debt advisory website. Is there any way to find out why that is? Their BBB report is spotless. I have also looked at Debt XS. They aren't listed as not to use, but have some BBB complaints. 36 in 3 years. I asked them about that and they said that is a pretty small percentage of their 8000 clients. - but not everyone who is dissatisfied reports to BBBs, right? Sorry to be rambling, but this is tearing me up. If anyone has any advice, I really need the help. Thanks.

 

[cmorris]

Do NOT go to a "credit repair" place. Most are scams!!! The few that are ligitimate can only do the same thing YOU can do.

Go to creditboards.com. They are very helpful and have lots of previous posts for you to study.

The FTC does not even recommend these credit repair places. You can settle your own debt yourself.

Good luck to you.

 

[kopes]

Just my personal experience, but do NOT use of these places. I signed up with one and they did nothing to help me. I worked with them for 7 months, sent them money, and always heard 'everything is fine'. Then I got arbitration papers in the mail from one of the CA's and found out the debt place had been doing nothing! They did finally call me about the negotiating they had done and where only able to reduce the total debt by about $1000 (out of 13,000 btw). I am now filing for bankruptcy because everything is even a bigger mess than before I started with the debt place. I have never heard good stories about them.

 

[jdul]

Thanks for your thoughts. I know you guys say that I can do it on my own. But how do I go about approaching a credit card company (for example) and asking them to take $4000 as "payment in full" for a $10,000 balance? (this is the type of thing the debt settlement companies can supposedly do. I odn't know who at he credit card company to contact, how to ask, etc. I'm scared and clueless about how to do this on my own. That's why it seemed like hiring a company that has experiencing negotiation that type of settlement seemed like a good idea to my. I haven't signed any papers yet, but have had several of them fax me some to look at. How do I get started?

 

[cmorris]

First thing, get copies of your CR's from all of the CRA's. Find the negatives and inaccuracies. Got that? Good.

Now, go to creditboards.com. Read the Newbie section. Read previous posts. Use the search funtion to find a specific topic (if needed). AFTER you have read until you can't see straight, post on the Credit Forum. There are lots of people to help you and inspire you.

This site is for legal issues. Creditboards is for credit questions. CB is WONDERFUL! I can't say enough good things about them. There are sample letters there too.

Everything is done by letters, sent CMRRR. You make an offer, the creditor declines, and you go back and forth. You send validation letters (if CA). There is so much you can do, it cannot be mentioned in one post. You have a lot to learn, so start reading!

Good luck to you!

 

[jdul]

Thank you for the tips. I will go there and post questions. Until you guys told me about creditboards, this is the ONLY place that I could find (when GOOGLEing) that anyone discussed the legality, practicality, etc. of these companies. I appreciate your help.