Second, financial counseling is much cheaper in comparison. Consolidation companies typically cost $20-$30/month over 4-5 years. You pay them instead of your creditors. They take your payments up front until you are behind enough that the creditors will cut a deal. This in effect looks like a chapter 13 bankruptcy (structured repayment of some of your debts) on your credit. You'd do better to cut the deal yourself and save the money to actually pay towards the debt. And no I'm not saying to stop paying your creditors on purpose. Of course you should pay them if you can. So PLEASE stay away from these goobers. These kinds of companies are among the top complaints with both the Federal Trade Commission and the Better Business Bureau.
Third, I hope we all have learned the lessons of the recession we just got out of. Remember the trouble many homeowners got into by 'moving' debt onto their houses in the boom years only to have it cave in on them when the housing market dropped like a rock? If you were among those numbers I'm truly sorry. Consolidating debt into a house is one of the riskiest behaviors out there. Unfortunately, millions didn't realize the risk until it was too late. Well there you have it folks, my first real post. I hope you enjoyed and will come back soon.
2 comments:
is it bad on your credit if you settle for a lesser amount? just was wondering if i have screwed up my credit doing this.
It does unfortunately damage your credit because the debt was not paid in full, but not to the extent of not paying at all. It should only negatively affect your credit for 3 years, although it will be listed for 7.
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