NON Profit credit counseling ?

[invest1choice]

Hello everyone can I get some imput on this direction . I am reconsidering bankruptcy and thinking maybe I should go this way . I have heard this counseling is just as bad as Bankruptcy .. all replies welcome please.. thanks

[HHM]

In what context do mean "its just as bad as bankruptcy".

Consumer Credit Counseling (CCC) is more expensive than BK, because there job is to have you pay off the balance of your unsecured debt in 3-5 years. (but they do stop interest from accruing and in rare circumstances can reduce the overall balance owed, but mostly they take the balance you owe when you walk in the door, and calculate a payment to pay off that balance (plus their 1-3 percent fee) over the course of 3-5 years.

CCC does effect your credit report, but its not as bad a hit as bankruptcy.

[invest1choice]

When I say CCC just as bad as bankruptcy meaning your credit report and being able to restablish your credit. I am just juggling this idea and actually just called a CCC and they are charging more than my attorney. so I may be going towards bankruptcy even CCC told me that was my better choice. after giving them my bills. so thats the deal I guess ,.. thanks so much..

[Tgolfer123]

I mentioned in a previous post about my niece using one of these nonprofit credit counselors, InCharge .

It didn't cost her any money and helped her get out of debt. I know it's said that it could hurt your credit report, but someone did tell me once that bankruptcy can look worse. But I won't stand by that, I'll leave that to the experts

Definitely look into more avenues before you file bankruptcy. Good luck with your finances, and know you are not alone.

[tracy1878]

they may say they are non profit, but most of them have a fee built into the monthly or weekly amount that they take from your checking account. Also, they can negioate a settlement with a creditor, but never tell you about it so you pay the higher amount, they pay the smaller amount that was owed and pocket the rest. Also, alot of creditors won't work with them.

We tried this 2 years ago, they took money 4 times out of our account, but never sent a dime to any creditors.

Just be careful, that was our experience

[invest1choice]

Thanks for all your help well appreciated.

[Cmonlottery]

When things were going south for us, I tried one of these also. Didn't work for us either. The payments were about the same as before. They hold the first payment so you go a month w/o paying your credit cards(so they charge fees and jack up rates). Then it usually takes the first 4-5 months to get over the damage that happened this first month. And the fees were going to run about $5000.00 over the 5 year plan.

In the end bankruptcy was cheaper and we can get on with our life sooner.

[Lightning]

Many non-profit organizations have administrative costs that need to be covered. The counselors working for the CCCS organization probably draw a salary, and that money has to come from somewhere.

Here's a good explanation of what non-profit means.

http://en.wikipedia.org/wiki/Non-profit

[Tgolfer123]

Yes, I guess it's safe to assume that most things in life aren't free. I'm sure there's a fee somewhere down the line, how else would they be able to survive unless it was gov't funded?

She (my niece) was raving about it so apparently it didn't do her much worse with her finances. I try to advise her now because she is young and making mistakes... I mean LEARNING, something new every day, but you know, sometimes they have to learn frm their own mistakes.

Good luck in whatever you decide. Thanks for the link BTW.

Many non-profit organizations have administrative costs that need to be covered. The counselors working for the CCCS organization probably draw a salary, and that money has to come from somewhere.

Here's a good explanation of what non-profit means.
http://en.wikipedia.org/wiki/Non-profit

[sunshine08]

We did the CC thing for 2 1/2 years & paid them over $1100 a month and was supposed to have them paid in 50 months, wrong. Couldn't tell much difference in the balance (definitely wasn't half). Questioned them several times and they didn't answer our last couple of inquiries, also backpedaled about the time frame. Still were getting phone calls from creditors on a semi regular basis. Some companies, after we stopped paying the CC (trying to decide to file or not) seemed more willing to work with us about repayment, some even offered to settle for half of the balance. (not MBNA though) But by then our home was hit by lightening and alot of "little" things weren't covered by insurance, medical bills etc. made the decision for us. I personally wouldn't do the CC thing nor would I advise anyone else to do it. IF the creditors won't work with you to lower the interest rate, etc. Try something else. Good luck

[StaciMM]

As with anything else, check out the debt management program before enrolling... Find out about their past history. If they are non-profit, most creditors should work with them (because creditors receive tax advantages). That doesn't mean that all creditors will have the same results. Each creditor has guidelines for what rate they reduce to, majority of APR's go down between 6-9%. There are a few (American Express, Advanta) that go to 0% and others that hardly drop at all (Capital One won't reduce lower than 15.9%, Cross Country stays in the 20's.) The monthly payment in the DMP will be somewhere in the area of 2-3%, plus the monthly maintenance fee.

A DMP generally doesn't change a credit score, because it normally doesn't change your balances or your payment history. Over time, it can improve it as the balances should decrease steadily, and if someone is past due at the start everything gets put back in good standing within a few months. Its recommended not to use more credit while enrolled, because the purpose is to get out of debt. Of course, whether you can apply for something else will depend on the creditor you apply. At the beginning of the DMP, they may be leary to work with you. Down the road, though, less of a concern arises.

The major advantage is for someone who is temporarily behind, but in the position to make regular monthly payments. 3 months of payments gets your accounts 'reaged' so they go back into good standing, and the late charges stop adding up. Also, with the upcoming increase in minimum payments, it may be a way for people who are in decent shape-yet can't afford to pay more-to get their accounts paid off without falling behind.

(I monitor, sort of quality control, calls for a DMP on a part time basis.)

[JustChillin]

I checked with a credit counseling service, gave me some good advice but couldn't help me with the payday loans or my house. They told me to pay off $3,000 in credit card debt that it would 3 years @ $186.00.

I consulted with an attorney and he said @ $186.00 a month I could be debt free in 3 years except for my student loan. Make my payments with the trustee, keep my house current starting with this payment, that I could refi my house with the trustee's blessing in 2 years, and have a credit reference from the Trustee's office a year after that. Has anyone had an attorney tell them this?

[StaciMM]

With $3,000 in CC's a DMP wouldn't be a good move for you. (Assuming your rates at most would improve 20%, the total savings in the first month would be ~$50, and it would go down from there as the balances went down.) The interest savings wouldn't be enough to make paying ANY fee worthwhile. The only exception would be if that $3k was spread over 4-5 accounts and they were past due. (In a DMP he accounts go back into good standing & late fees stop after 3 months.) The payment sounds a bit high to me, on $3k I'd expect a worst case scenario of $120-130, but then it would be for closer to 4 or 4 1/2 years.

On the other hand, if you had $30,000 in debt w/ mid 20's APRs and had too much income for chapter 7... That's a different story.

I checked with a credit counseling service, gave me some good advice but couldn't help me with the payday loans or my house. They told me to pay off $3,000 in credit card debt that it would 3 years @ $186.00.

I consulted with an attorney and he said @ $186.00 a month I could be debt free in 3 years except for my student loan. Make my payments with the trustee, keep my house current starting with this payment, that I could refi my house with the trustee's blessing in 2 years, and have a credit reference from the Trustee's office a year after that. Has anyone had an attorney tell them this?

[BrokeCh7]

Non-profit dose not mean non-pocket.

Non-profit is just how they set up the corp the CCS make big money and where put in business by the credit card companies to cut down on loss.

[Lightning]

And what CCCS company in particular are you referring to? I know people who work in the field, and they certainly aren't making "big money". They're small operations, and many employees pull a salary below the state's median income level.

Get your facts straight before you make wild accusations.