Cccs

[GaPeach]

Has anyone tried to use Consumer Credit Counseling Service before filing BK?
They seem reputable and I was wondering if their debt repayment plan works. Shoud I try it or would I just be better off with BK? We owe about $65K in cc debt.

Thanks

[BassBoy]

If you are able to avoid BK, or do not meet the criteria to file BK, then having your debt consolidated in this fashion may be an option for you. Make sure you understand that you may be faced with tax implications for any/all debt that may have been forgiven.

[Help!]

Yes, my husband and I actually had some success with a program through AFS about 8 years ago (before we bought a home). It was the type of program where you paid them a lump sum each month and they distributed payments to each creditor (and the creditors agreed to accept the lower payments, lower interest rates). It actually worked really well for us - we eliminated our CC debt and at the end of the program our credit reports looked really good. This was before we bought a house and buried ourselves again, though.

The programs to steer clear of are the ones where the company collects payments from you but withholds payments to creditors for months, forcing them to get desperate and accept a debt settlement. Then you have not only trashed your credit, but you will likely get 1099 forms at the end of the year for the amount of debt written off. This can count against you as income and increase your tax liability. In addition, many of these companies have taken payments from debtors and disappeared into the night.

Suze Orman's website has a lot of information on debt management:

http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=index&GnavID=84&SnavID=20

and a link that will take you to the National Foundation for Credit Counseling (to find legitimate CCCS's):

http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=20&TnavID=&AreasofExpertiseID=2

Good luck!

[Cali]

If you decide to do CCCS make sure it is a reputable place. There are many companies out there that are scams and hurt you more than help.

And know that CCCS goes on your credit report and by many is considered the same as filing C13.

[HHM]

With 65K in credit card debt, you are probably beyond the help of a CCC firm.

[lrprn]

Yes, we used a CCCC firm for eight months. Paid them $800/month and after eight months, did the math and found out after paying in $3,600 we had reduced our debt by only $900. A complete waste - we ended up filing Ch 13 which is what we should have done in the first place.

I agree with HHM - with as much debt as you have, it's very doubtful that you would do better in a debt management program compared to filing Ch 13 and have no unsecured debt in 3-5 years. (And obviously if you qualify for Ch 7, that is even better. You'll have no unsecured debt in 90-120 days.)

And no matter what the debt management programs tell you, the hit on your credit from these programs is almost as bad as bankruptcy. Bottom line is these programs help very few people. Mostly they just waste your money and time and you end up filing bankruptcy anyway.

[jktrading]

We tried CCCS many years ago. Almost every account showed "handled by debt management program" or similar notation on all of our credit reports. A couple of accounts even continued marking as late because they said we were not paying as originally agreed. For us, it was no better than ignoring/filing on all the debts. I do not recommend CCCS.