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Hello All,

I recently contacted a company called Debticated as I wanted to get out of a $10,000 debt on two credit cards. One credit card with $6000 was charging 25% interest rate while the other with $4000 was charging 14.5%. I have never been late or behind on my payments to these accounts. Debticated promised that they would lower the interest rate to 9.9% and so I filled out the forms and faxed them out. They said that my entire first month payment would be their setup fee after which there would be $6 monthly fee.

However, through this website, I discovered that signing up with companies such as debticated could ruin my credit history. My credit history is not perfect but I have been trying to improve it lately. I dont want to apply for new cards with lower rates as that would lower my credit score and because it is not easy for me to get new credit cards due to my current credit rating. I therefore contacted the creditors directly to negotiate the rate and one of them agreed to reduce the interest rate to 12.25% from 25%. The other creditor wouldnt reduce it from 14.5%.

Anyhow, the way I figure, even with the above rates, I could be out of debt in less than 3 years without the help from Debticated. Although I have already faxed the paperwork to Debticated, I have not sent them any payment and dont want to enroll in their program. Am I still considered enrolled in their program? Would it still ruin my credit rating? In short, how do I prevent any of this from showing up in my credit file? After all, the forms have all the info such as credit card account numbers, social security number etc.

BTW: I have already notified the creditors to ignore Debticated if they contact them for my accounts as I do not want to be in their plan.

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Best get back ahold of this company and tell them you are canceling their service as it will not help you at this time to add extra expenses from the get go. Need to notify them incase they try to get you for additional fees.

This will hurt your credit - since the credit card companies will reflect on the credit report that you are in debt conseling. Once they get going and it will stay till you can get out from under it.

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Thanks for the reply. I contacted Debticated as you suggested and told them I do not want to be in the plan. The representative asked why and I said that I would pay off the balance on my own. She told me that I would need to pay the full amount of $10,000 if I do it on my own but if Debticated do this, I would pay perhaps half the debt (as Debticated could settle the debt with the creditors). I told her that settling the debt would have negative effect on my credit rating to which she said no, it wouldn't. She said Debticated would ensure it would not affect my credit rating. I asked when would the plan go into effect and she said once they have received the first month payment all of which they would use to "set up" my account after which they would call the creditors.

Since I have not sent them any payment because I do not want to be in the plan, and since they have not contacted my creditors yet to initiate any negotiation, am I still considered to be in the plan? All I have done so far is faxed the info about my credit cards account to Debticated. How could that hurt my credit rating? Plus, I have also notified the creditors that if Debticated contact them with regards to my account, they should not ignore their calls.

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Ok - let it go with the counseling company, but would recommend that you contact each creditor to add a password / pin number that only you can talk to them about your accounts.

I would suggest asking to change your account number, this will be up to you though. Because once you ask for this they will create a new trade on your credit report w/ notation saying "Lost or Stolen". But this may be better then them trying to contact the creditor. And all it will take is one person at one company to mess up and speak with them on the matter, especially if they can prove that you turned over power of attorny on these accounts.

If you know that you signed a release form for them to contact the creditor than this may be what you need to do to protect yourself. These debt counseling services are getting more desperate to keep there customers these days and are getting more aggressive as they go.

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Hey, I'm thinking of starting a debt elimination company. Here's how it works:

I sign people up for lots and lots of cash up front so I don't have to guarantee anything.

I then receive payments from people and keep them in a special account where the cash accumulates over several years.

I don't pay on any of the accounts until they are nearly charged off. I then negotiate very reduced settlements with the OCs.

I keep receiving payments for several years from the dupes who sign up for this service.

I keep sending the dupes letters about how good it must feel to be out of debt.

OK, I'm just kidding. But this is probably how these services work.

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Thanks for the continued help. Yes, indeed, I did sign an "Agreement", and faxed it to them. However, the very next day I decided I was not going to go with this and now I want to back off completely. Since I have not sent any payment, hopefully they wouldnt start contacting the creditors. I have contacted the creditors and asked them to ignore any calls/letters from Debticated with respect to my accounts. My main concern now is to protect my credit rating from them. I didnt realize that by faxing the forms I was giving them that much power over my credit history.

By the way, the agreement does state that I could terminate the agreement at anytime for any reason by providng a written notice. Is there a standard letter that I could use to terminate such agreements? I could email you a copy of the agreement if you want to look at it.

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No there won't be no standard letter, just make a photo copy of the agreement to send them circuling the terms that allow you to cancel service. And tell them that you are exersicing your rights to cancel and want a return letter confirming their compliance.

Would recommend sending this post hast to them, spend the little extra for return recipt. So you know that they received your letter and when.

Still would call your creditors back to make sure you have properly insured that the debt company can't speak to the creditors (stress that you ought to ask for a password to be put in place so that the customer service has to prompt for this prior to speaking to anyone).

[Edit by kb9tbq on Thursday, February 27, 2003 @ 07:53 AM]

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Thanks again! Just one last concern. If I send a letter saying that I want to cancel the service, could they report it to the CRA that I signed up for a debt consolidation program but "dropped out". I read somewhere on this BB that if one does not complete a program with debt consolidation company, then that appears as a negative mark on the credit report. On the other hand, in my case, except for sending the fax, I not really in the program.

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No, this should not be a problem for you - since you informed your creditors not to speak to them. And no payments had been sent in to initiate the program.

The statement "currently in credit counseling" is reported by each of your creditors, not the credit counseling service. The credit counseling service has no power what so ever to add information to your credit report.

You should be in the clear on this matter - as long as the creditors honor your request not to speak with the counseling service.

Still recommend that you call customer service for each of your creditors and request a password be put in place on each of your accounts (only allowing you to speak with them and no one else).

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