New here/Consumer Credit Counseling

iVillage Member
Registered: 07-02-2003
New here/Consumer Credit Counseling
6
Wed, 07-02-2003 - 11:39am
Hi all. I have lurked here before but never posted, and in the meantime my debt has tripled (where's that sad face emoticon?) My husband went into business for himself and while he did that full time for 2 years, it wasn't enough to make ends meet and we accumulated a lot of debt during that time, about 30K unsecured. He closed the business and now has another job, but the ends still are not meeting and I have no idea how we're going to even make the minimum payments on our credit cards. I have called Consumer Credit Counseling Services and plan to go through them to clean up the mess we've made. Has anyone used that service, and if so what are your thoughts? We want to pay our debts. We are committed to paying this off and to not charging another thing. I want to do the best thing I can do to pay this off, and to protect our credit rating (NOT because I want another *^*&^$^#%# credit card, but because we hope to get a bigger house someday). Can I get some input please? Thanks!!!

Kim

iVillage Member
Registered: 02-14-2003
Wed, 07-02-2003 - 1:26pm
Hi Kim. I'm so glad you're posting! :o)

I don't recommend using a debt management company to pay your bills unless it's your last stop on your way to the doors of bankruptcy court. Use them for the free budgeting classes, but not to pay your bills for you. Use the emotional support here and the how-to infomation on Debt Q&A. They're both free, we've all been there, and your credit won't be adversely affected. :o)

Can you or your husband or both of you get a second part-time job? The second job (or jobs) don't have to be permanent, but they will help tremendously with getting caught up.

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Keep posting sweetie.

Ms Joe

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

iVillage Member
Registered: 04-02-2003
Wed, 07-02-2003 - 1:33pm
I have never used on the services. But, before you do make sure that you check them out with BBB and clearly understand what their policies are. I personally, would only go that route as a last resort. Have you contacted the credit cards directly to see if there is anything they can do like lower the interest, waive fees, etc. This is the same thing CCCS does. Except you are the one in control. My best advice is just to make sure of all of your options before you move forward.

Best of luck.

Momtochris

iVillage Member
Registered: 06-13-2003
Wed, 07-02-2003 - 4:20pm
Yes, I went through CCCS, in about four years all of my credit cards were paid off. Although I cannot say that I had a negative experience going through CCCS, I would agree with the other posts to only go through them as a last resort, and if you do, I would also agree to be sure to check with the BBB first. There have been many horror stories regarding debt consolidation or credit counseling services that take your monthly payments and then do not pay the entire amount to your creditors. My experience was that although the CCCS was a non-profit agency, after a couple of months they began charging me an additional monthly "service" fee. It can also show up on your credit report that you are enrolled in debt counseling.

After completing CCCS I was then bombarded by what seemed to be great credit offers, not learning my lesson the first time around, I fell into the credit/debt trap again. Since CCCS did it all for me, it was just another monthly payment, I didn't really learn how to handle my finances correctly. I am now working my way out of debt again, but on my own this time, and learning to remain debt-free. The resources listed in the previous posts are a great place to start.

Best of luck.

iVillage Member
Registered: 02-14-2003
Wed, 07-02-2003 - 7:43pm
What a great post! Thank you for sharing yourself with us. I'm glad you're here. Post lots. :o)

Ms Joe

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

iVillage Member
Registered: 04-07-2003
Wed, 07-02-2003 - 8:30pm
I have also been going through CCCS during the last four years and my last

payment is in September. I will have paid off $25k in credit card debt

and 1 student loan. My monthly payment was $600 which included a $14 debt management fee paid to CCCS. If I knew back then what I know today, I probably

would not do it. However, the best thing about CCCS was no access to credit.

I have not applied for credit since beginning CCCS. The important of not using

credit is evident in the fact that I kept 1 credit card with a $1k limit out

of my plan. The balance has remained just below $1k to this day. Several of my credit

card companies reported my account as "managed by consumer credit counseling."

But since I have not applied for credit, I do not know the effect of this on

my credit report. I don't think it had much effect on my FICO score, but I don't know

about actually applying for credit. I was told that by going through CCCS that I

saved over $5k in interest charges. If you still have good credit and can get zero percent or very low interest rates, I would definitely not do it. However, since

I was so overextended, prior to CCCS I was not getting good offers or being turned down

for too many accounts. If you have not read Jerry Mundis' book or books by Mary Hunt, I would suggest that you do so. The most important thing about getting out of debt is not incurring any more debt. CCCS really helped me with that because I don't think I was knowledgable enough back then to do it on my own.
iVillage Member
Registered: 06-14-2003
Sun, 07-06-2003 - 4:44pm
Just my opinion... see if you can work with your creditors to lower the interest rates, if possible. Even if they won't, paying them on your own is better than credit counseling in the long run. I have been told by several people in the financial world that credit counseling looks just as bad on your credit report as bankruptcy. I was going through a service (I am not sure if we are allowed to name names) and they assured me that my creditors would not report that the account was being handled by a credit counseling service and therefore would not affect my credit score - wrong, it showed up on my credit report! The other thing is that although I made my payments on time to this organization, they often sent my payments late to my creditors - resulting in late fees and showing up as I pay late on my credit report. I heard about people having a hard time getting financing for a mortgage when they have been through credit counseling, so I took all my accounts out of this place. Ever since then, I make my own payments - on the same terms that they negotiated - and on time! I know that credit counseling really helps some people, but if you want to buy a house, I would think carefully about it.

Good Luck!

Miki