Consumer Credit Counseling

[Debtor]

Has anyone gone through credit counseling? I don't know if I want to file bankruptcy. How does credit counseling work? Is it better than bankruptcy for some people?

[lrprn]

Has anyone gone through credit counseling? I don't know if I want to file bankruptcy. How does credit counseling work? Is it better than bankruptcy for some people?

Many of us here have tried credit counseling before filing. So far it hasn't worked for a single one of our members.

My husband and I tried it with a very reputable credit counseling company, CCCS. Gave them $800/month for 8 months. At the end of it after paying $3,600 to them, we owed our creditors $900 less. Total waste of time and thousands of dollars. We ended up filing bankruptcy anyway.

Credit counseling trashes your credit almost as much as bankruptcy, so if that's what you're thinking, take that off your reason list.

Read these links to get a sense of when it makes sense to use credit counseling vs. filing bankruptcy:
http://www.************************/...it-counseling/

http://www.ftc.gov/bcp/conline/pubs/credit/kneedeep.pdf

http://www.ftc.gov/bcp/conline/pubs/credit/debt.shtm

[dragonnfly]

We did the credit counceling from Nov of 06 until we filed quit paying them in Feb of 08. (We filed in April) If we wouldn't of had a vehicle that the payment was too high on and upside down it probally would have been enough. It was nice to have just the one payment a month and not 6 and our balances did go down. On top of that our lawyer said that the trustee we got likes it when people try other routes before filing. Our payment was $529 and month and all of that went to the creditors except $39 which was their monthly fee. It got our Chase cards from 29% down to 6%. That was the most drastic reduction they got for us the worst was Cap 1 which went from 31% (really) to 15.9%. I know a lot of people dont like them and for us they were just one more thing to extend us filing BK. But i though they did good. Pm me if you would like to know the company we used. (no Im not affiliated with them at all)

[dragonnfly]

I left out one thing Irprn is correct it did mess up our credit just as bad actually I think worse then BK. Lenders dont want anything to do with you, we couldn't get a car loan. Nothing. Most of them just say its their policy not to lend to people in credit counceling.

[Debtor]

What about the reageing?

I have read lots of information online and don't know what to make of much of it so I am delighted to have found this forum. I have read something to the effect that credit counseling companies would negotiate away your late fees and penalties, lower your payments and re-age your account so it would show in good standing. Anyone have any input on that?
Thank you,
Debtor

[dragonnfly]

All mine did was lower the interest rate, stopped late fees. The credit bureaus showed the account current but the bills that would come would always say past balance due. Thats why I check the cerdit bureaus quit often and they were current. They could not get rid of previous late fees etc. but were able to stop future fees.

[PaKettle]

My opinion is that credit counseling is almost always worse or as bad as bankruptcy for your credit, only you end up paying a lot more money!