Not-For-Profit Credit Counseling

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I found a local, NFP 501(3)b CCCS (Consumer Credit Counseling Service) on the website where my son attends high school.  This is a local resource listed as a source of support for area families.  Link to the site is at the bottom of this post. 


Seems legit and the terms appear to be very fair. 


Has anyone heard of CCCS and if so, any ideas as to what kind of success rates people achieve using a NFP service of this nature? From what I'm reading, it's a go-to for the county and state where I reside.  They are part of a national network of consumer credit counseling services.  We are at around $45,000 in cc debt, I just lost my job, as I need to be home more with my special needs child, was traveling 130 miles r/t on a daily basis for a commute and my employer wouldn't work with me so that I could work some days remote and some in the office each week.  I can work locally part-time to help us pay debt down, no problem. 


We have a classic 1969 GTO that we are willing to use as collateral to obtain a personal loan, a '67 fully restored GTO that, uh, is not going to be used as collateral or sold - my fiancé has owned that car since he was 17 (he's now 50)....and he's not parting with it or risking losing it for any reason or any one.


BK is not an option - he's a portfolio manager for an investment bank and his position requires FINRA licensing that would be summarily yanked if he filed for bankruptcy...debt consolidation is pretty much our only option and we want to pay our debt down, we were certainly more than willing to run it up.  This is more my doing than his...Williams-Sonoma has some really great stuff!...he's handled it like a trooper and so I'm trying to come up with the best solution that will cause him the least amount of stress...the good news about me being at home is I have the time to deal with this for us. 


Thoughts and feedback would be greatly appreciated.  Thanks all!







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While there may be an exception, I've never seen one. IMO, all debt fixers are scams.  CCCS is a nationwide "franchise" operation...each office operates more-or-less independently, which means they're only as honest as the local owner.  Being "not for profit" doesn't make them any better.  They will do nothing for you that you can't do yourself....and, its unlikely you can "borrow" money to get yourself out of this.


I'd suggest you sit down and work out a budget.  Figure out what you need for food, clothes, housing...whatever is let goes to credit card debt.  Double up on payments.

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Thanks so much for your feedback, it really helped!
So here's an update.  We went to the CCCS b/c I wanted to know what kinds of interest rates they have negotiated with these credit card companies as a general rule.  Mission accomplished - I told the hubby we weren't signing anything and we brought our own credit reports with personally identifiable info blacked out.
We came home, gave it a week's rest, then sat down and discussed our options.  Bankruptcy was eliminated as the first option.  I was very hesitant to involve any 3rd party in our situation, as I don't trust them to have our interests at heart, or to advocate for it on any level. 
I then did a lot of research and yesterday, this is what I accomplished - I really need to know if I did this right before we formally sign on the dotted line with the credit card companies:
1.  Any creditor who offered a "settlement" was told that we won't even entertain that as an option.  No point in paying down debt with an R-9 showing on our credit reports; we'll just walk away from the whole thing. 
2.  I was able to claim hardship (medical and employment related) with 100% of the credit card companies...below outlines the balances and APR% when I started my calls and the outcome of those discussions:
     1.  Citi American Airlines - $9,479 balance 17.99% APR ($277/mo open-ended)
     2.  Citi Shell MasterCard - $3,096 balance  23.99% APR ($65/mo open-ended)
     3.  World's Foremost Bank (Cabela's) - $19,200 balance  15.18% APR ($700/mo open-ended)
     4.  Barclay US (Williams-Sonoma) - $9,600 balance  17.74% APR ($280/mo open-ended)
    1.  Citi American Airlines - $9,400 balance - 0% APR ($154/mo x 60 mos) - "closed by consumer" - "paying as agreed" (re-aged immed)
    2.  Citi Shell MasterCard - $3,096 balance- 0% APR ($58/mo x 54 mos) - "closed by consumer" - "paying as agreed" (re-aged immed)
    3.  World's Foremost Bank - $19,200 balance - 0% APR ($331/mo x 55 mos) - "closed by consumer" - "paying as agreed" - (re-aged eff immed after we paid $993 good faith)
    4.  Barclay US - $9,600 balance - 2.9% interest - ($203/mo x 40 mos) - "closed by consumer" - "paying as agreed" (will re-age in Jan 2016)
So as of right now, I've got our monthly payment on those four down to an average of $678/mo  (some balances will mature more quickly than others) over a 60 month term.  The monthly pmt for the first 40 months will be $746/mo...once the Barclays card matures and that's paid off, we'll use the $203/mo savings to accelerate the maturity date on the remaining three cards. 
We sold one of our classic cars, so we are going to pay off the two cards below in very short order - that is why I'm not including them in the long-term payoff cards above. 
We made $24,000 on the sale of that car, so we are investing it (hubby's a portfolio manager) and making the agreed payments on the 0 interest cards in the interim.
Late fees and penalties waived
We have two other cards, one of which I'm in process of negotiating - it's our Crate and Barrel cc issued by Comenity Bank (they SUCK!)...
   5.  Comenity Bank - $1,818 balance - 26.99% interest
        Think we're going to go with the 10% APR interest offered, but not before I beat them up some more and make sure it's re-aged, listed as "closed by consumer" and "paying as agreed" on our CRs...then we'll pay it off in 6 installments, but let them negotiate out longer payment terms...
   6.  Chase Slate - $3,030 balance - 0% Introductory APR that expires in June 2016 - We are not going to claim hardship on this card - we plan to pay off full balance by the time the 0% interest term expires and keep the card open as-is with a $3,500 credit limit.  We need a card, after all - good luck renting a car without one.
So all told, we have $42,000 in debt on four cards.  We will pay 2.9% interest on $9,600 of it and the rest is at 0%. 


We will keep one of our cards with a modest, manageable CL open, the rest will show that WE closed them due to the change in our financial circumstances and that we are in good standing with the creditors. Then I will send a letter for each of these TLs citing hardship for the reason why we had lates and decided to close the accounts.  All were paid as agreed and in good standing prior to our situation and then we had a period of 60-90 days late on them - with this arrangement, we have brought all accounts current and going forward, will continue to pay timely. 
I hope that I haven't missed anything MAJOR here and that these negotiations reflect positively on our CRs for potential creditors down the line. 
Had we gone with a CCCS, this is what would have happened:
1. Debt Settlement
Total Debt: $48,846
Est Avg Settlement:  43.15%
Total Settlement:  $20,214.06
DMP Service Rate: 15% (based on TOTAL debt, not settlement amount)
DMP Service Fee: $7,026.90
Total Amount of Settlement & Fees:  $27,240.96
Total Monthly Payment (based on 42 mos) = $648.59
$19,605 debt forgiven would be taxable income and we'd receive a 1099-C - unless insolvency at the time of settlement could be proven, we'd be on the hook for that.  We would owe the IRS $4,901.25 in tax (est 25% tax rate) on 4/15/2016, our credit destroyed with numerous "charge offs" listed for amounts forgiven...NOT worth it.
Total settlement + tax liability = $32,141 with trashed credit. And the potential for being sued b/tw the time they start negotiating debt and the time they raise the capital to fully fund the settlement amount.  Oh, and additional interest/penalties that accrue as well as late payment and/or charge off risks.  NOT worth it for us. 
2. Debt Management Plan
Total Balances:  $46,846
Sum of Interest: $12,649.91
Total DMP (incl. DMP monthly fee $50) $62,495.91
Monthly Pmt:  $1,057.20
Terms:  60 mos.
CCCS also gets 10% from credit card companies, which ups their take from $3,000 to almost $9,000.  To destroy our credit rating...really?!?!


We would not have gotten 0% APR on any of our credit cards...we would have been hit with significant enough interest to make the payments and total debt higher than what we negotiated.  We were adamant that the principal remain what it actually is - we were only negotiating on interest. 
Accounts would be shown as "closed by bank" ... bad, bad, bad.  Why bother paying anything then?
The CCCS we were talking to is funded by Bank of America, Citicorp, and various grants from HUD, etc/private foundations.  I think that is a huge conflict of interest; banks funding these places, "negotiating" terms with them and then giving them a 10% kickback.  WTF! I point blank asked her where their funding came from and at no time, did she ever once disclose that they receive funding from any of these banks. 


By negotiating the terms ourselves instead of going with a DMP arranged by a Consumer Credit Counseling Service, we are saving:


$265/mo avg. over a 60 month term

Total Savings:  $15,880

Barclays (with 2.9% int), Chase and Comenity total about $15,000 - instead of giving the CCCS that money, we can use it to eliminate three of our cards' balances in full while keeping one of them open.

Accounts are re-aged immediately

Accounts show "paid as agreed"

Accounts show "account closed by consumer"

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Thanks again! I feel better now, knowing I've got your stamp of approval :)


The CCCS did have some good information, and I don't mean to be so negative, so, I'll leave my commentary about them at this - they're a great resource to figure out where to start; being in a situation where there is an avalanche unfolding around you is so very stressful, as many here already know - they do a great job of first, finding out what caused the situation and then budgeting needs based expenses before diving into the debt management side of things and formulating a budget for that.  I just don't like their terms or the company they keep - I never saw an agreement to review, as we informed them that while we appreciated their help, we were able to negotiate very favorable terms going direct to our creditors...some of these accounts were days away from being charged off, so I'm glad we approached them when we did and managed to salvage our long-term credit outlook.


I also have to give huge props to the reps at the credit card companies we dealt with; most notably, Citi, World's Foremost Bank and Barclays.  At one point, I was giving the supervisor, who's recently married, life insurance advice (I'm an insurance consultant) while we were working through our account! I have his direct line and he's going to follow up with me on his life insurance situation when he has more information on his employer's plan (lol).  Really awesome, dedicated and accommodating people, who made us feel less like the deadbeats we were feeling like at the outset.  Non-judgmental and very sensitive to our situation, as well as bending over backwards to help us create manageable repayment terms that would cause us the least amount of harm. 


I plan to send thank you cards to each of them and a letter of gratitude to their company's CEO/supervisor telling them what great people they have working for them.  It makes us feel like our choice of banks to do business with were solid!


I think a lot of the success people in our situation experience depends on one's attitude going in...I was pretty dispassionate, calm, but assertive and would ask to speak with a person with decision-making authority if a rep was not able to accommodate all of my conditions...that was only possible after giving myself some time to put emotional distance between the situation and my emotions.  We matter-of-factly told them that we are giving priority to those companies who provide us with the most favorable terms...we were also very honest about how we landed in this position, that we incurred the debt and feel that we have an ethical obligation to pay off every dime we charged - it's the interest I wanted to eliminate and was largely successful.  I think it's also critical to contact them, instead of making them chase you...that the holidays are approaching was also a plus for us - I don't imagine a ton of people out there are contacting these places looking to throw money at them. 


I also reminded myself that I was actually the one in the power position, since I'm the one with the checkbook.  :)


My husband was totally stunned that I was able to negotiate the terms I did...which made me feel a little less crappy, since I'm the one who ran up a lot of our debt. 


I also want to thank the experts on this site who helped me figure out which path I should take.  I love that people and forums like this exist; I have come here more than a few times over the years and greatly appreciate that I have this invaluable resource, run by such caring people to lean on when I'm in need of information and/or advice.  Thanks again, I can't tell you what lifesavers you really are!


Oh, and we won't be missing any payments.  My husband had platinum credit...his Cabela's card had a $40,000 credit limit...he used it a lot in the 6 years that he had it and paid the full balance every month.  He is really out of his element being in this predicament and really struggled with it.  Emotionally, he was angry and the stress/unfamiliarity of it all took a huge toll on him, but I think it's been a learning experience for him too...we got through it when events like this usually destroy relationships...I can see why, but it was a great test for both of us. 


Happy Thanksgiving - I do have a lot to be thankful for this year!

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