Difference between debt settlement/couns

iVillage Member
Registered: 04-26-2007
Difference between debt settlement/couns
3
Thu, 07-24-2008 - 2:18pm

Ok, so I just finished signing up with money management Int., the one mentioned on Quicken and in Suze Orman's book. Then a guy from a debt settlement place calls me after I put some info on their website and tells me he can settle the debt for almost half of what I owe and my payments would be almost half of what I'm paying MMI. But, he says they open a savings account in my name and once enough money is in there, THEN they negotiate settlements with the creditors. With MMI, they withdraw the $ from MY checking account and then start writing letters to the creditors right away. With both companies, they are telling me it would take about 4 years to pay everything off.
I just don't want to get screwed! Can someone tell me which way is better? MMI had been around for around 40 years and this settlement place (Fast Trak) has been around only 10 years.
Please tell me what you know about the differences in these companies and the way it all works as far as settlement vs. a debt management plan and counseling, and your opinion on what is best. They both say to close the accounts and they both affect my credit in the same way.

THANKS!

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Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 07-24-2008 - 2:35pm

MMI is better.


Debt settlement works by NOT paying your bills for several months, which trashes your credit.

All my best,
Danni

iVillage Member
Registered: 04-26-2007
Thu, 07-24-2008 - 2:53pm

Ok. Thanks. I was thinking MMI is better, but wanted to ask the experts here! LOL
Have you used MMI? The settlement thing sounded fishy when he said they open an account for me, they have to wait for a certain amount to be in there, etc.
I am not in a dire situation to go to them. So, I'll stick with MMI.

Kim

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Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 07-24-2008 - 3:57pm

Hi Kim - I've not used a credit counselling service personally, but my sister has been using one for over 2 years now, and she's not had any problems.

All my best,
Danni