Mayday, Mayday, you are in a flat spin with both engines disabled right now!!! You need to act and act fast in the name of good credit. I'm not kidding. Timing has a lot to do with your actions going forward. If you wait, you could lose a lot regarding your credit standing and payment arrangements.
In this situation you have one very important goal: Stop the bleeding and stop it fast!! I'll tell you what to do step by step:
1) Terminate your program immediately. Call all of your creditors and tell them you are paying on your own again.If possible, send them all a payment today or pay by phone to become current again. It may hurt financially, but will help you a great deal in the long run. You may lose your 1st payment to the consolidation company on a clause that 1st payment is returned only upon completion of the program. However, the longer you try to get relief in the name of fair play, the further you will sink into non-payment problems which will hurt you for a long time. Terminate today.
2) Make sure you haven't missed any fine print that says your first payment will be held in house. Then seek a lawyer. Investigate this company's background, business practices and check to see if they are licenced in all 50 states to do business. The IRS is very stringent with non profit companies. They have to be squeaky clean to keep that status. Otherwise it can be taken away.
DO NOT try to pursue relief from this company on your own while your creditors wait for payment! You will get the run around for months and your credit will be ruined. Your creditors won't want to hear your sob story either, they'll want their money.
The company may be using a loophole with their non profit status. The held in house clause allows them to put your 1st payment in escrow with the promise that if you complete the program without any late payments (which takes 3-5 years) then you will get your payment back, therefore they charged you nothing. 99.9% of the people who enter into this type of program are late at one time or another for any number of reasons. Could be anything from a late mail delivery to a heart attack. Regardless, they keep your payment and that is a profit. That's how a "non profit" credit company can make a BIG profit.
Jeter
[Edited by Jeter on 06-07-2001 at 04:53 PM]