Question

*edit: what my meeting is for is debt management, clearly I’m not well versed with terminology * Well guys. I’m meeting with Lutheran Social Services tomorrow to discuss credit counseling to help eliminate my debt! After talking with my banker in hopes of getting advice for an eventual mortgage he pretty much told me to get my sh*t together and pay this off and get it off my credit report so I don’t have such a high debt to income ratio! He mentioned bankruptcy because of everything looking super overwhelming, but then we realized I probably make too much money for the amount of debt I have to file bankruptcy and so he suggested credit counseling to help settle the accounts and get them taken care of! I’m excited to see what they say. I know it’ll definitely cost more than the $2000 bankruptcy, but I think spending the extra money to settle the accounts will be better in the long run! Question: do you know if credit counseling services only help you with debts on your credit report or will they help you with all known debts?  

Answer 1

I'm going through credit counseling as for my experience they go based on what is on your credit report and go from there

Answer 2

There’s credit counseling and then there’s debt management plans. They are 2 completely different ways to get out of debt. I am in a debt management plan. I have put all debts of $500 or more in the program and I pay one monthly payment into a dedicated savings account. As the debt management company settles my debt they take the funds from my dedicated savings account. I do pay fees for this but it is well worth it, especially for my sanity.  

Answer 3

I would look into a debt management program rather than a debt counseling program with settlement. Greenpath is a debt management program that you can either meet with a counselor in person if they have a local office near you or you can do it over the phone. They go through all of your debt and create a plan to pay them off.  

Comments

@berstine highly, highly recommend a non profit debt management like Greenpath!  

Answer 4

You can settle on your accounts on your own. If you want someone to look at the whole picture of your debt and help you to be able to afford it, look into debt management instead. I worked for a Bank in collections for 10 years, we always recommend non profit debt management to pay down debts if you have a lot.  

Answer 5

I looked into this route too. What I learned was you can contact your credit card companies and they will work with you. Some may require you to close the account. Most cc companies have a hardship department. Credit counseling companies also charge you a fee for making payments. I did this with Exxon, old Navy, amazon and Capital credit. Best decision I made! You got this girl!  

Comments

@cadena64404 most of mine are actually within collection accounts as opposed to credit cards! I’ve tried calling a few and they’re only willing to settle for like $100 less so I’m basically wanting to see if someone can negotiate better deals and what not

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@hefter95202 gotcha! I don’t have experience with that type of situation. Just be careful relinquishing control to a company to make payments for you. By chance are you a member of a credit union? They typically can do personal loans.  

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@cadena64404 I called today a credit card they couldn’t give me less interest rate but said they can lower my minimum but that will close my account. I have pretty decent credit how horrible to close the account? Did you close any credit cards?  

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@soniferous oh wow! All but one of mine (capital one) reduced my interest to zero and yes I closed my accounts. For me, this Avenue was much better than bankruptcy.  

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@cadena64404 wow that’s good. Bank of America said I wasn’t eligible at this time to lower my interest. It’s not a lot it’s like 14% but my minimum is 220 a month and that’s what’s killing me.  

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@cadena64404 I made a payment arrangement with Captial one that I thought was a good deal and would save my card, however I got back on the phone with them and they told me they would still close the acct so I’m like well what the heck. Now I’m trying to decide how I should go about doing it. If I should continue with the payments they made with me then let the credit people try to negotiate and close the account or what. I just wanted to try to save it because it’s my longest account at 3 years  

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@soniferous i never has luck with asking to reduce interest. I needed as low of a payment as possible and if closing the card got me that I was willing to do that. IMO the cc companies would rather get $25 a month than deal with a bankruptcy

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@cadena64404 makes sense, that’s for the info  

Answer 6

One of the ways if not both are just as bad as declaring bankruptcy. They hurt your credit.  

Comments

@paradigm yes, I’m well aware of that. But I don’t have the financial means to have these accounts start garnishing wages. I’d rather settle and not risk losing half my income to creditors.  

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@paradigm I agree with you on that. You can negotiate on your own & keep your money in your own pocket & pay it toward the debt owed. You got into this now work on getting yourself out. I know this isn’t Dave Ramsey but I’ve heard him speak on this & he says do it yourself as well. I’ve learned that most financial people are broke people as well so I’m going with Dave Ramsey because he’s not broke & has spent the last 30 years guiding people out of debt.  

Answer 7

I understand not wanting to close a long term account. For me, it was the best option. Capital One also reports to the credit bureau as paying on time, although the account is closed. I would do what’s best at this moment financially for you.  

Comments

@cadena64404, yes, this! They should all still report on time payments regardless if they're closed or not. It will start your credit history over, but it's not a charge off and that's usually a dent on your score.  

Answer 8

We did credit counseling through ACCC a few years back. Not sure if it's changed, but they wouldn't take student loans. They did credit cards, loans (personal) and medical debt. They interview you, ask a bunch of questions and then come with one monthly payment. The nice thing is they contact the creditor for you. Keep in mind though, for credit cards, the specific company will likely close your account once you start working with a credit counselor. Once the payment is automatically deducted, they disperse to each creditor and will give you an update on each balance. Once you pay one off, they apply that payment to another debt- snowball method! It took us 4 years in the program and we paid off all of our cards, loans from our wedding, and medical debt in collections!  

Answer 9

You can do this yourself. Call companies and ask for a hardship plan. Some credit back late fees and over limit fees if you have them, most ask you to close the accounts and they lower it rest typically 10% and you pay a very low monthly payment like $10 or something. Many utilities allow budget billing so if you live in an area where heat or ac charges vary greatly you get a set set (based on last years average) amount you oat each moth so it’s easier to budget and plan if things are consistent. Try trim but if you want to lower utilities but be aware the charge 33% up front of amount they save you for 12 months so if they save you $10 a month on you cable they will charge you 33% of 12 months x $10 so . $39. 60 will be charged after they notify you they negotiated your bill. The free counseling is good if your debts consumer credit cards but if it’s not there isn’t much they can do for you.  

Answer 10

@hefter95202 I went to a financial program at the public library. The program was hosted by Lutheran Social Services. They offered participants in the program credit counseling, tax preparation and many other services. My counselor kept me accountable for my financial decisions. I originally went there because I wanted to buy a house and pay down debt. I’m not debt free but I was able to buy a house. Good luck!  

Comments

@goggin60 thank you!