Debt Settlement

iVillage Member
Registered: 05-30-2003
Debt Settlement
1
Fri, 05-30-2003 - 3:14am
My husband and I were about $25K in debt due some bad business decisions a couple of years ago. We didn't want to go bankrupt, so we looked into an alternative settlement company. What a mistake! They gave us a sales scam telling us that our credit would be improved once we settled our accounts. We were supposed to build up funds so that they could negotiate a settlement with the credit card companies. We sold a vehicle, and took out a 401K loan so that they could begin settling the accounts. They didn't tell us that they are dependent on holding off payment for 4-6 months before they settle and that we would get continuously harassing phone calls (including calls at work) even though we had saved up significant money to pay toward the (reduced) debt. I feel really dumb for falling for it, but we were desperate. At any rate, we ended up closing the program and getting half of our initiation fee back. Because we were so far into it, two of the credit card companies agreed to settle with us for 50-60% of the debt so we are still about $16K in debt. I'm frustrated that this type of scam is allowed to go on especially since they are feeding off of people that are in desperate situations already. I'm looking at a debt counseling program but am nervous about how much more damage it will do to our credit report. Does anyone have anything to contribute regarding credit counseling programs? Will I be unable to attain credit for anything for the two-three years that I'm on a program? Any help is much appreciated.Thanks!
iVillage Member
Registered: 02-14-2003
Fri, 05-30-2003 - 10:37am
Hi sweetie. I'm so sorry you got involved with this. I understand desperation driving the things we do with trying to get out of debt. But, think about it, how would your credit look better for not repaying your obligations in full? Also, you will receive a 1099 for any forgiven amount over $600. You will have to report this as income and you will owe taxes on it. :o( I'm glad that you were able to get out of it and get your money back. The company could have kept your money and vanished. Yikes!

Please post on our Debt Questions and Answers board for any questions you have about your debt and how to repay it. Keep posting here for the emotional support you need to keep paying it. :o) There are a lot of wonderful people on both boards.

CM Ms Joe Cool

Senior Community Moderator

moneylifecm@mail.ivillage.com

Ms Joe
CM Ms Joe Cool
Senior Community Moderator
moneylifecm@mail