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Notifying creditors that you are going to use a debt collection agency

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Junior Member
What is the name of your state?What is the name of your state? Illinois

This year I have experienced two job losses. I lost my last job in late June and finally found another job in mid-August.

During this time, I couldn't pay all the monthly payments on my five credit cards and car loan, along with the usual bills: rent, electric, food, gas, etc. (I am over $30,000 in debt.)

I only had enough money to make payments on the smaller minimum due credit card amounts and had to pass up the others. I have received numerous voicemails for me to contact two of my creditors.

Last week, I contacted a debt collection agency, MMI, seeking help. They said they can help me, but I have to fill out their paperwork and send them the first payment that they will distribute to the creditors. This is going to take at least two/three paychecks before I could come up with the amount.

I want to write a letter to each of my creditors notifying them about my situation, but I am not sure how to go about doing it. I want to word it correctly (to avoid the continuing phone calls) and was wondering if anyone knew of a formatted letter template that I could use.

If anyone knows of anything else that I should do besides the letter, please let me know.

Thank you.


Senior Member
No, collection agencies are those who call wanting YOUR money, you are referring to a management agency. You should be aware that most of these just end up getting you in further trouble! They cannot force a creditor to accept smaller payments at all, many people end up wasting their money on these agencies, only to find out they are still being sued and have awful credit!

Who's Liable?

Senior Member
as stated before... DO NOT use a debt collection agency... They are bad news... I cannot think of any person that I personally know who've used them stating that is was a good decision to use them...

If you feel that you CANNOT get back on your feet, and that paying the amount you owe isn't plausible, then you need to seriously think about a BK 7...

BUT you need to make the descions fast since the new BK laws go into affect OCt. 17


Senior Member
The debt management company is NOT going to help you enough, in fact, they will probably make the situation WORSE in the long run and cost you a fortune for the so-called 'service'.

What you would be better off doing is asking your creditors if you can be put on a hardship program for 6-12 months. These typically lower payments, lower interest rates, and waive fees for the duration. This will actually help you far more than this debt mgmt company will. To top if off, showing a debt mgmt company on your reports is about as bad as a bankruptcy score-wise.


Hold on ONE minute!!

I went through Debt Counseling a few years ago. They lowered all my interest rates and I was able to pay my debt off in 3 years and THEN got it cleared off my credit report within 3 months!! Dont give advice unless you know first hand if it works or not!! It worked great for me!!! I was paying 28% on one installment loan that they got down to 7%!! Had it not been for them, I would have drowned!!!! My credit is 700 now and doing fine!!! Thank GOD for them...


NYMinute--Hold on ONE minute!!

In the last couple of years the debt consolidation companies have changed drastically.

At first it seemed to help, then the creditors started to clamp down on your credit when they found out you were getting help, which meant you were in trouble financially.
And the counseling agencies have no power to force creditors to lower rates, especially when they suspect you are going broke.

Then a lot of phonies got in to it and now there are hundreds of cases of people getting ripped off.

I've only heard of one type that really tries to help, and that one was a city agency set up to help locals in that community.


Senior Member
There may be a few that do work out ok for people, but the general consensus is that they do more harm than good and cost people far more than the trouble and crap credit they can cause. A debt management company on your credit is BAD NEWS - about as bad as a Ch 13 !!

You paid off your debts in 3 years -- gee.. about the same as a 3 year Ch 13, but you had NO protection against lawsuits had any creditor decided to go that route. If they 'cleared your credit' in 3 months... I can only imagine what tactics they used to do that and what it must have cost you.


Senior Member
A. CCCS is mostly garbage and they are the much touted "not for profit". They are controlled and funded BY THE CREDIT CARD COMPANIES and their ONLY goal is to keep people paying - people who should have gone down and filed Ch 13 instead. In far too many cases, CCCS cannot help, they will basically tell you you're on your own.

B. Creditors DON'T GIVE A RAT'S BUTT !! All they want to hear is you forking over every penny you've got, regardless of whether or not you've got it to give.

They won't contact you by phone then, but may via mail. If a collection group has the account, you need to work out a settlement with them.
Bullhockey. Original creditors are NOT bound by the FDCPA and they do NOT have to abide by any cease and desist letter. Settling with a collection agency is like playing Russion Roulette, 99% of the time the part you didn't pay will come back to haunt you thru a new collection agency.


Senior Member
You, Rachel are a NEWBIE here, and your assessment of me is off the mark.

I have been on this board and 4 others dealing with credit, collections, and bankruptcies for more than 3 years. I have read COUNTLESS stories from people who have to deal with scumbag collection agencies daily. CA's are pond scum, they do NOT abide by the laws (FDCPA and FCRA) and they deliberately hurt people. Their constant stream of abuses is enough to make anyone sick to their stomachs. Those CA's that don't break the law are a true rarity.

It seems that ladynred got burned several times on things and can't recover.
Wrong again. I can refer back to those hundreds of thousands of posts I've read over the years. Even though I've had my own dealings with collection agencies because of 3 layoffs, all you have to do is READ as many accounts as I have to know what the hell really goes on with creditors and collectors alike.

I DO know my rights, forwards and backwards, and I will fight tooth and nail against anyone violating my rights. Unfortunately, the greater majority of people in financial distress do NOT know their rights, they are often too overwhelmed and beat down to be able to fight the onslaught of slime that comes from many collectors and they think they HAVE no rights !!

They are also those people who are lured to CCCS and debt management/negotiation/settlement compaies that are flooding the airwaves on their TV and radio. They don't KNOW how BAD these places can be. Most people have NO CLUE that CCCS is controlled and funded by the very credit card companies that they're in trouble with to start with.

I do my research, I read case law, industry publications, and a whole lot of other releveant material so I DO know what I'm talking about. Yes, I HATE collection agencies and I have NO love for any credit card company, and I will bash them up one side and down the other for their rotten practices. That's my perogative, my right to free speech. I try to help people see and learn that they DO have rights, there ARE laws to protect and help them, .. and to point out the scams and the nasty underside of the credit game... and that includes the "big 3" credit bureaus who will do anything in their power to circumvent the FCRA and screw consumers. They don't care.. the consumers aren't paying them !

By the way.. I live on CASH ONLY and I'm quite happy with that. :rolleyes: :D


RachelTN I am of the opinion that you are trying to help so I am not going to bash you or say your wrong, because your answers are your opinions and you should feel free to express them. However, I have followed this board for quite some time and can say Ladynred is on the mark the majority of the time. I don't know her personal history, but I do know she checks these boards every day and tries to help people through her expertise. You should note her disclaimer after every post. She knows bankruptcy is a death bell for a credit report and if you look back through these boards you will see that most people who have dealt with credit counseling services did not have good experiences. I dealt with one referred to me by HUD to help save my home. They were only interested in helping me pay back my credit cards and did not have a lot of options for saving my home. I filed Chapter 13, I will be through with them long before I would have finished the credit counseling program and things will drop off my credit report about the same time. I would suggest that the original poster read all responses, all opinions including yours and then decide the course of action that is best for them.
Thanks for your daily help ladynred!!!!


Junior Member
Boy what a confusing mess I started. I don't know why I said I was using a collection agency....this is why I need help.

I found MMI (Money Management International) in the yellow pages under credit/debt counseling. I checked to see if there were any complaints about them online. If there were, I could not find any. I went to their website, www.moneymanagement.org and signed up for someone to call me.

Two of my creditors charge me over 30% interest, one charges 22.49%, one charges 16.24% and I don't know what the other one charges. My first payment of $595 would include a $74 setup/educational package fee and my monthly payments after that would be $521/month. My interest rates would go down to 9% on four of the cards and 6% on the last one.

And the counseling agencies have no power to force creditors to lower rates, especially when they suspect you are going broke. I have heard for quite some time that creditors would accept lower interest rates just so they can collect the monies due. When and why has that changed?

I want to pay my bills off, but it will take me awhile to get enough money together just to pay the late and overdue payment fees already past due since June, let alone make the normal monthly payments.

If I were to ask for a "hardship program for 6-12 months," I am not sure how to word the letter. that I would send out. What if I still need help after 12 months? Would they extend it more than 12 months? I have only been on this job three weeks and everything that can go wrong has. I may lose this job just as well. (Their office equipment keeps breaking down on me and it makes me look as if I am "incompetent.")

I need something to show each of them that I do want to pay off everything, but that it is extremely difficult to do so now.

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