Hi all, I've heard that using bill consolidation is just bad, some say even more destructive than a BK on your reports. I told my sister this, but she still wants to look into bill consolodation. She has a few CC bills that are out of control, and she just wants to resolve it as quickly as possible. Having said all of that, are there any consolodation companies that are better than others or are they all pretty much the same? Any help, insight will be appreciated.
I would say they are all about the same. The rumors you heard about them are true. It is best to stay away from them if possible. They do report you as participating in a credit counseling agreement on your reports, and this appears bad to creditors. Even though it is an attempt to be responsible by the debtor, creditors see it as "this person can't manage their finances" so it is almost as bad as a BK in some ways. It is also possible to make your credit worse using these services, because it is not uncommon for the service to pay bills late or not pay enough to each creditor, so the creditor reports late payments in addition to the credit counseling notation which is a double whammy. I was tempted to use these services in the past, but decided not to and I am glad I didn't. If you must use one, I have heard that Debt Counselors of America is not too bad. Also, even though Consumer Credit Counselors pretty much works for the creditors, they are the biggest and most established agency. It may be good to go with them. DEFINITELY stay away from Ameridebt. They suck.
