CCCS or Debt Settlement ???

[cdl1959]

I am currently a a "client" of CCCS and would like to know if debt settlement would be a good way to get rid of $20,000 (8 cards-various amounts) worth of credit card debt.

[kb9tbq]

Definitely not, you can check this thread out, and just see the nightmare

1. one covers cccs companies:

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=65

2. one covers settlement companies - current member Dark04 can help you out to understand her problem here:

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=146

If you have any other questions, I can break this down better for you later, but right now I am at work.

Have a good day,

[md]

I don't think cdl was necessarily going to use a debt settlement company unless I am missing something. If that is the case, as already stated...DON'T!!!

You can do it yourself and a better job. Should you try and settle instead of using a CCCS? It depends on many factors. Are you able to make the CCCS payments? Is any progress being made in paying down the debt? Do you have any extra at the end of the month to give more to CCCS to apply towards the debt? Which CCCS company are you using? (almost afraid to ask that last question) Did they take your first months payment and use it to cover their "expenses"? Did they cause you to be late (or were you already) on any of the accounts?

Some CCCS companies are good and really do help people. If your answers are "yes" to those first few questions then it may not be a bad idea to keep at it, but increase the payments if possible. You could also contact the companies directly (which is what we would generally suggest you do before considering CCCS) and see what kind of programs they offer. Some (like MBNA) have very good hardship programs, if you qualify. They will deactivate your accounts (which has already been done anyway), but you will be taking care of it on your own and be better equipped to avoid being late.

If you can't make the CCCS payments you can ask them to try and negotiate for lesser amounts. You may then end up only paying interest, it kind of depends on the creditor. Some will give generous temporary payments terms (i.e First USA...and I have many complaints against them for other reasons) and others don't (i.e. Chase).

If you do this on your own (and this is for anyone), always pay a dollar or two above the minimum (unless you are over-the-limit) on all of your accounts, except the one with the highest interest rate. Put ALL extra money towards this one and aggressively pay it down. Repeat once this one is paid off.

I did end up settling my debts because I knew it was the best choice for me and my own personal situation. For some, it is negotiating directly with the creditors for a lower interest rate or maybe a hardship program that they offer directly. While for others, a CCCS type company (a good one) can help. And then for some bankruptcy really is the best option and perhaps the only feasible option. Settling your debts is something generally done instead of bankruptcy. Unless creditors think you are headed towards that then they will likely not settle or maybe only offer settlements in the 80-90% range.

Settle on your own and read up a great deal about it before starting the process...if it is necessary for you to pursue this route. Settlement companies will take a good cut from what "they save you", generally 15-30%. There may also be tax implications for settling, especially if you have assets. That 15-30% you give them won't be written off either, you will be paying tax on it as well.

Good luck! Any other questions and we will see what we can do.

[kb9tbq]

MD I was not sure - just seen mention to debt settlement (Company)?

Well this is a totally different animal from the CCCS companies out there.

CCCS, you need to make sure to call the creditors to insure that they are at the negotiated percentage they told you they got it lowered to! Also duplicate billing is recommended so you can see for yourself what is going on!

Settlement Companies - They will offer to settle your debt for you, they will require that you sign over limited power of attorney, they will have you re-direct all the billing over to them. You have to pay an up-front fee as well as a percentage later of what they save you.

What they fail to tell you though, is that they won't immediately negotiate to settle the debt, they will wait, wait until every account is into collection, wait until they are all charged off, and wait even longer until you start seeing notices to appear in court!

Then they will DV the creditor and start the negotiation! Your creditors are going to be quite PO'ed by this point being dealt with this way, some of them won't negotiate and will opt to file a judgment against you.

They are not in the business of improving your credit by any means, they are just trying to save the most money - older debt has a lower price tag, and they want that to take the biggest cut of saving you money.

So by all means, please stay away from these companies - they are sharks just preying on the weak.

[md]

kb,

I agree completely with what you said. For all of those reasons and more, stay away from those companies.

While there are some good CCCS companies out there (and definitely some bad, very bad), there are just too many reasons why you shouldn't use a debt settlement company.

I was able to settle all of my debts before charge-off and have had 6 of the 18 total tradelines (from all three reports) removed, and another one improved to a positive tradeline. Another six I am filing suit over, two for each CRA, hoping they will cave once they see the amount I am suing for.

While I was not able to get the OCs to agree to make the tradelines positive (some simply won't), I think they were willing to work with me because I was willing to work with them. I did not make them send CAs after me, nor file suit against me, nor charge the accounts off. Make no mistake about it, settling your accounts can be very stressful at times and will take some time and energy, but in the end it will be worth it...again, if you find it necessary to go that route.

[kb9tbq]

Agree that CCCS companies can be used, but you must be educated before going into such a relastionship with them - that is for sure.

I prefer encouraging a person to learn and do this part themselves since there is nothing special the CCCS company has that you can't do yourself.

Re-aging is a good option, if you have the means to meet the creditors terms to pay up the account. This way they wipe the slate clean on the reporting to reflect no lates when you complete the terms.

Hardship / Reduced interest rate - definitely try to get if possible, and pay during that period as much as possible.

Settlement - you can even work this part on your own, but understand that later should you apply for a mortgage loan this will look negative to a lender.

CCCS is considered no better then a bankruptcy 13 to a lender also.

It is about reviewing all of your accounts:

1. Look for the ones that are over the credit limit (these are a must to take care of first. Pay the total amount needed to get back below that credit limit, be sure to pay extra to get out of reach of finance charges and interest being able to push you back over this amount.

2. Only when 1. is no longer an issue, then move to this one. Look for the highest charge interest rate cards. (All others you just pay minimum) but on this one double your payment until you have it down to a low balance.

3. When you complete one card, move to the next card, and pay double to get down - each time you pay one off (invest that extra money to the next card and so forth). Don't close any of the accounts out!!! you need them to rebuild!!! For right now just put them under lock and don't use any further.

4. As you are doing this, be sure to periodically call the creditor to ask for even further reduction on your interest rate and look for deals amoung the creditors to take to your advantage.

Like balance transfers with special interest rates! If you have the room on another account, you can transfer partial of the debt to buy yourself more time. - Just remember there are fees sometimes for this by both the credit card companies. But in come cases can be well worth it.

*** I would do the reverse on this part, pay off the best interest rate card I had first - then transfer the highest interest rate balance over to the card. Just prospective as to what you think will get you there faster.

This takes time, just like a CCCS company would do, but this way you are not paying a middle man. For myself it took me two years paying and swaping debt around to have the best results and get some control over.

Now the tricky part is not back slidding during this rebuilding period

*** One last note, if you know for a fact that you can't catch up on payments and that the over the limit / late payments / and high interest is just too much and you are pre charge off. Do yourself a favor and stop paying NOW! Because you will only extend the charge off allowing the creditor to keep making more money on you which they can collect. I know it seems like you are trying to do the right thing - but if you work the numbers you will see for yourself this is the worse thing to do in a situation that you can't get control back on.

I don't know how to explain this other then to show you by example.

Say you have a $5,000 balance with 10% APR

10% divided by 12 = .83% per month times $5,000 = $41,50 finance charge. Say you are making $75 payment so only $33.50 is going towards the balance.

Ok, say you are now over the limit and late. The creditor charges $25 late & $25 over the limit for a total of $50 extra per month. But not only that you are hit with defaulted interest rate and now that 10% is 25%!

25% divided by 12 = 2.08% per month times $5,000 = $104 + $50 = $154 finance charge. Say you are still only making $75 payment. So now you are still $79 outstanding, and this will only carry over to the next month to be refigured into the formula and another $50 added the next month for being late and over the limit.

This will take you down no matter what. If you can't pay the difference to eventually make this account current within 6 months typical charge off date. Then don't throw money away - because the creditor is only buying more time to re-age this account and add more fees to the balance!!!

You have to know when to walk away in such cases, and when it is worth fighting to save the account. So be sure that you work the numbers and take care of yourself in this matter.

[md]

Exactly, you got to know when to hold them and know when to fold them.

As for re-aging of the account by the creditor, many will only make the status of the account current, while the lates will still be there. I guess it just depends on the creditor.

If you do find that you can settle the accounts and that it is in your best interest to do so, then it is all the more reason to stop paying on the accounts. They won't settle with you if you are current or only a couple of months late or if you are only late with them.

[cdl1959]

Thanks for the responses and advice. I meant should I continue with CCCS or try to settle my debt with the CC companies on my own. CCCS of MD & DE did not charge any type of fee and the first payment did go to the bills. Some of the companies have reduced the interest rates and more of actually payment is going toward the balances. I just want to get rid of it as soon as possible and I don't want to continue making the monthly payments to CCCS.

[kb9tbq]

If that is the case that you want to get out of the CCCS service, then first you want to call your creditors directly yourself.

Let them know you are in a position to take over the payments directly with them, and want to know if they will work with you on this matter. Let them know what you are wanting to do to improve your relationship with them; like how much you want to pay each month or such.

You can also ask if they work with you, if you can re-age the account and make it positive again with them, or if not that way if they will maintain the low or maybe even lower interest rate after you seperate with the CCCS program.

The ones that will work with you, then inform the CCCS program that you will be taking back over these key accounts yourself to settle directly with the creditors.

Not all creditors are going to want to let you back out of CCCS program, some may even default your interest rate back higher then what the CCCS program negotiated with them.

Plus you want to find out if there are penalties or fees involved for canceling service with the CCCS program.

But don't server the relationship yet, until you talk to your creditors and see which ones will work with you and what specifically you will be arranging with each of them first.

Best of wishes in this matter, you also want to make sure that the original creditors will remove the notation on your credit report that show you to be involved with the CCCS program.

[xdebt]

I found a company that eliminates debt and there is not a negative impact on the credit report. Saved us from going bankrupt.

[kb9tbq]

I found a company that eliminates debt and there is not a negative impact on the credit report. Saved us from going bankrupt.

I don't see how that is possible - if you used CCCS program - then the creditor is obligated to notate on your tradeline with them that you are currently in credit counseling (which is to remain for the duration which you are signed up).

There is nothing which the CCCS program can even do about this part, out of their hands what the creditor reports.

And especially don't see how this would work with a debt settlement company - since in order to save money, you have to wait for time when the creditor will take the least amount of money! And again you can not control what the creditor reports.

By saying eliminate - I would be weary as to what you mean, if you could explain this part better as to what this company does exactly to eliminate.

And if you are referring to new social security numbers or business tax id numbers - then that is out right illegal & I would hope to warn others away form even thinking of such a thing.

If it sounds to good to be true, I most likely is.

[BrainDonor]

xdebt has posted that same message on numerous threads. It's spam.

[kb9tbq]

Being a moderator has its advantages, lol

Took the bite out of that one,

Won't be seeing our members get in trouble by the likes of this one, just have a feeling on this one.

[Dark04]

speaking from experience....eliminate my butt! *growling* thanks guys for pointing out the flaws in this one! my goal in life is to STOP folks from falling for this crappola! I NEVER want to see ANYone go though the nightmare I've been through the past few months! (and it won't be "over" for years)

[kb9tbq]

This one was posting his e-mail in the signature - that is the only thing which I changed - removed signature from showing. Since he thinks to get victims for what ever tricks he might be up to.

It is still there - should he post again, but I will keep an eye if this one tries again.