Does credit counseling work?

iVillage Member
Registered: 05-29-2003
Does credit counseling work?
Thu, 06-05-2003 - 12:09pm
I'm new here and would like some advice. My DH and I both work, he works full-time and gets as much OT as is available, which isn't very much anymore. I work 4 days a week. We have a 10 month old and my step daughter who is 16 lives with us, her mother pays no support, which is a long running battle I have with my husband. Anyway we have a budget but too many bills if that makes sense. After adding up all our bills we are left with only about $20 extra a week if there is no OT on his check. That would be for going out, lunches, etc. Our CC debt is about $14,000 which is the biggest problem. Plus two car payments which are about $450 a month but should be paid off by end of this year.

Anyway my question is I contacted Consumer Credit Counseling, they said we could get on a plan to have CC paid off in 5 years. Has anyone completed these plans, do they work? We are not usually behind on our payments but can only make the minimums. I have gotten the interest reduced on one card to 8%. But have two others that are higher. Would I be better off to call the CC Companies and try to work out a plan myself? How do banks view these plans when they show up on credit reports for future applications such as cars or houses. Do they view as a bad or good move?

I'm not sure what to do. We are hanging by a thread, living check to check and the smallest thing can throw us off our budget like car repairs which happened recently. I would appreciate any advice. Thanks

By the way we are not using our CC anymore. But debt is still high because we can only make minimums.

iVillage Member
Registered: 06-03-2003
Thu, 06-05-2003 - 12:57pm
Hi there -

here's my 2cents from my experience. I consolidated my credit cards (9 of them!) about 2 years ago with Minnesota Debt Solutions. (btw - i live in NC!) I had my lawyer look over the contract to make sure it was legit and then signed my life away. It has worked out very well for me. They actually only make around $4 per month off me! They pull $250 from my checking account once a month and distribute that to each card. Then I get a statement every month from each card showing the amount I paid. They didn't seem to reduce my interest rates much, but it is nice not to have to think about them. Before I was missing payments, charging more on my cards and just paying the minimums. They automatically close the accounts for you. I am down to 4 big cards now and making major headway.


I don't think I realized that 'consolidating' can really hurt your credit. I tried to buy a car about a year ago and was turned down b/c I consolidated.

It sounds like you are pretty on top of your bills so this may not be a good option for you. I was paying $10 on each card and then immediately recharging $10 more! CRAZY!

Best of Luck,


Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 06-05-2003 - 6:09pm
I am of the opinion that if you can sit down, figure out all your debts, and create a repayment plan, there is *little to nothing* that consumer credit agencies can do for you that you cannot do for yourself. It's not uncommon nowadays to hear that they couldn't even get your interest rate reduced with the lenders. It sounds like you're stretched, but it also sounds like you're aware and ready to formulate a plan. I think I would try that first.

My idea of consumer credit agencies is that they're great if you are trying to avoid filing bankruptcy - if you really think you're that far down the path, then consider it. Otherwise, try to handle it yourself.

Best of luck - we're here for you!!


All my best,