November 30th, 2009 | 
Author: I have about 4100.00 dollars in debt and I want to try to pay it off in the next few years. I looked at that Care one company, sounds like i’ll be paying them an extra 1700.00 dollars in fees and all this intrest which I think is ridiculous. Or do all companies work like that? Please tell me some good companies I can work with, thanks!
Don’t work with consolidation companies–they are a scam. They do make a lot of money off you. They charge you the start up fee, you make monthly payments to them. They do not make monthly payments to your creditors. Your accounts continue to go delinquent. You have no idea this is going on because the consolidators have sent cease and desist letters to your creditors. They will start paying your creditors once they have enough money to settle, generally about 30% settlements. Any money left they keep–alot of creditors no longer work with them because they are so shady. They also don’t advise you that in doing the settlement, you will be paying taxes on the amount not paid. Meaning that if you have $4100 in debt, the company negotiates for 30% settlement, you will not have paid of $2870. Of that amount anything over $599 is reported to IRS, they consider that income and you receive a 1099 and have to pay taxes on $2271. It also affects your credit. While you are paying them and they are not paying your creditor, your account charges off. When they do the settlement, it is reported to the credit bureau as a settlement in full.
Better to contact the creditor, negotiate payments with them. They will stop fees for the most part and lower your payments. Good Luck***
Posted in debt consolidator
No! I went through that, still going through debt crunches, and I have been royally screwed by the debt consolidators. Be very careful who you pick. They shouldn’t charge much at all for their services. Usually a consumer credit counseling service is what you want. Keep in mind there can be negative impact for using them. It WILL show up on your credit report, and you cannot use your card any more.
I found a website put up by the Federal Trade Commission about "Fiscal Fitness" and choosing a CCCS. I think you may find it helpful. Take a look and hopefully that will answer the questions you may have as well as help you locate one that won’t "screw you" over.
Good luck! Remember- cash and carry. So much less problems that way!
Additional:
Someon added a website for NFCC.org. that’s a good one that will help you find a counseling service near you. It will show you what services they offer and the price. I don’t know how good they are but I will be visiting one myself next week.
References :
http://www.ftc.gov/bcp/conline/pubs/credit/fiscal.shtm
Check out debtharmony.com they say they can lower your bill up to 80%
References :
Don’t consolidate with companies that are NOT an organization. They will take your money and use your money for their own fees. They are liars and big time SCAM.
I suggest you go to the following link and do your research. This is an organization that will help you pay your creditors in time and will actually over time have good affect on your credit report. Also this is a large organization they tell you the truth because this is a large company throughout U.S. and if they lie people can sue them. So do your research and consolidate with them. Good luck!
References :
http://www.nfcc.org
Don’t work with consolidation companies–they are a scam. They do make a lot of money off you. They charge you the start up fee, you make monthly payments to them. They do not make monthly payments to your creditors. Your accounts continue to go delinquent. You have no idea this is going on because the consolidators have sent cease and desist letters to your creditors. They will start paying your creditors once they have enough money to settle, generally about 30% settlements. Any money left they keep–alot of creditors no longer work with them because they are so shady. They also don’t advise you that in doing the settlement, you will be paying taxes on the amount not paid. Meaning that if you have $4100 in debt, the company negotiates for 30% settlement, you will not have paid of $2870. Of that amount anything over $599 is reported to IRS, they consider that income and you receive a 1099 and have to pay taxes on $2271. It also affects your credit. While you are paying them and they are not paying your creditor, your account charges off. When they do the settlement, it is reported to the credit bureau as a settlement in full.
Better to contact the creditor, negotiate payments with them. They will stop fees for the most part and lower your payments. Good Luck***
References :
Collections Manager–20 years