Has anyone here used a debt relief company? I just signed up with one, but now I’m freaking out that I might’ve made a bad call.
I owe about 20k and just want to make sure I didn’t mess up.
I signed up with Consolidated Credit Solutions a few months back, and it’s been great. They got my interest rates cut way down—some by half or more, depending on the card. You make one monthly payment, and they handle paying the credit cards for you.
Before this, I was just shuffling balances around to avoid interest, but that only worked for so long. If you can stick to the monthly payments for a few years, it’s worth it. I had about 35k in credit card debt. Let me know if you have any questions.
@Aspen
Are all debt relief programs like this? Mine set up a $300 monthly payment with 0% interest for four years and said they’ll negotiate down my debt. I just don’t wanna get scammed. I’m only 23, and I hate that I let it get this bad.
@Bayley
Biggest advice I got from this forum—go for a Debt Management Program, not debt relief. Some of those companies are shady and just leave you worse off. Look for a legit non-profit DMP. They lower your rates, close your cards, and you’re done in about five years.
@Bayley
I haven’t used those, but I’ve heard bad things about some like National Debt Relief. Some of these companies don’t pay your cards for months, and that can wreck your credit.
I found my program through NFCC.org. They negotiate directly with credit card companies and have the power to cut interest rates. They charge about $50 a month, plus a small processing fee. No penalties if you pay early. My Discover card went from 26% interest to 11%. Bank of America dropped to 6%.
Which company did you sign up with? Are you behind on payments yet?
@Aspen
I went with National Debt Relief. I was making my payments until this month, but they told me to stop. I could barely afford the minimums before, so I thought this was my best option.
Bayley said:
@Aspen
I went with National Debt Relief. I was making my payments until this month, but they told me to stop. I could barely afford the minimums before, so I thought this was my best option.
Might be worth calling the company I mentioned just to get a second opinion. No harm in checking your options. Let me know if you need more info. Good luck, man.
I’ve been with National Debt Relief for almost a year now, and it’s been okay.
I didn’t qualify for bankruptcy, and making minimum payments was getting me nowhere. Some people say debt settlement is a scam, but it’s really just expensive. They charge a big service fee, but I’m still saving money overall, and I don’t have to deal with creditors, which is a huge stress reliever.
That said, if I had 20k in debt instead of 80k, I would’ve just picked up another job and cut my expenses. This process tanks your credit, and if I could go back, I’d rather have just hustled harder than deal with this now.
@Haze
I signed up with National Debt Relief too. They never mentioned a service fee? I was working two jobs, but it still wasn’t enough. Everything I made went somewhere else, and I couldn’t catch up. It’s nice to hear from someone actually using them.
@Bayley
Yeah, they charge a service fee of about 18-25% of the debt they settle.
For example, I had a 20k balance that they settled for 8.5k, but their fee was 4.5k.
Haze said:
@Bayley
Yeah, they charge a service fee of about 18-25% of the debt they settle.
For example, I had a 20k balance that they settled for 8.5k, but their fee was 4.5k.
So instead of 20k, you end up paying around 13k? That’s not terrible.
@Bayley
Yeah, exactly. It’s still a big savings, but that fee stings.
@Bayley
I’ve been with them since last October. No issues so far, it’s been smooth.
Most of these companies are scams. You’ll just end up filing bankruptcy anyway. They take your money and leave you worse off. I’d talk to a bankruptcy lawyer instead of trusting them.
I used CCCS, and it worked great. They got rid of all my interest rates, and I only had to pay the principal.
You don’t actually need a debt relief company. You can call your creditors yourself and ask about hardship programs. Some banks let you pay way less with 0% interest.
I got Capital One down to $8 a month with no interest. Definitely worth asking before going with a third party.
If your credit is already bad, it might not make much difference. A friend of mine did this, and their score tanked.
Zem said:
If your credit is already bad, it might not make much difference. A friend of mine did this, and their score tanked.
Mine is around 600. I still live at home, so I’m not in a rush to move out, especially with rent in California.
Zem said:
If your credit is already bad, it might not make much difference. A friend of mine did this, and their score tanked.
I just wanna get this paid off. I’m not looking for a new car or anything. Just need to be free from this debt.
@Bayley
If you can’t keep up with payments, it might be your best shot, but expect your credit to drop into the 500s or lower.