Debt Settlement

iVillage Member
Registered: 12-30-2007
Debt Settlement
1
Sat, 09-19-2009 - 8:39pm
Really close to either bankruptcy to save the mortgage or as a last ditch, seeing if I can settle some of my big balances on unsecured debt.
iVillage Member
Registered: 07-05-2006
In reply to: ihsdebt
Mon, 09-21-2009 - 8:45am

I hired a company to do it, but ended up settling many debts on my own. After hiring the company, I diligently put away money each month and paid them their fee. I had put 3 cards into the program, totaling around 15K. Everything was going well until I got a big tax bill from a paper I had forgotten to file years before and I had to pay my taxes before my credit cards, so I used my credit card savings for the taxes and when a credit card was ready to settle with me, I didn't have the money and declined. They continued to sue me. I was pregnant and sick...really sick...I ignored the mail for 3 months during my morning sickness and when I was finally able to go through the mail, I saw the paperwork from the lawyers and as quickly as I could tried to get the paperwork back to them, but I missed the deadline and they won in court. I had to pay them $7,000 dollars in about 3 months. It was devestating. I'm sure, looking back, that there was probably something I could have done to fix the situation. Or at least, lengthen the payment period, but I was a mess back then. Pregnancy does not agree with me and by that time I was in my 8th and 9th month. My parents gave me the money to pay them off. After that, I didn't really trust the debt settlement company and I came to realize after talking to the rest of my creditors that they had not made much effort. One creditor went as far as to tell me. 'We do not deal with those companies and they only tried to call us once.' Hmmmmm, who do you believe?

All of my other cards had already gone to collections and beyond by that point. As I would get money together, I would call them and work out payment arrangements. Some of them were easier than others. Most of them want huge, lump sum payments. I would usually wait until I had a tax refund before calling them. I settled one card with a $4500 dollar balance for $2500. I usually settled for 50%-75% of what I owed, except for the one card that sued me. That card had a 7K balance. With all the fees and interest they had charged me for not paying for so long, my balance had gotten up to 9K. I settled with them for $7200.

Basically, I would not go through a debt settlement company again. They promise so much. They will stop the calls, they will deal with all of your creditors. You can settle for half of what you owe. Then they charge you a fee. I payed them a little under a thousand dollars for them to do nothing! I did end up settling one card with them. My last card that I hadn't taken out of their program.

If I could go back and do it again...I would hire a bankruptcy attorney. I heard one talk on a money show and she was talking about people like me, who get stuck in bad situations, don't know any of the laws or protocols and end up suffering alone with no help. She talked about how we all have this fear and anxiety about bankruptcy, but sometimes it is a way to fix things and put things behind you and it protects you from creditors! I would have loved to at least talk with her back when I was going through my struggles. She said that it was free for her to have a consultation with you and that she wasn't going to overcharge people who were already struggling with money. Back then, I would have automatically assumed that I couldn't afford an attorney, but if someone could have helped me out when I was sued, that would have been worth any amount of money!