I have a friend who went to a web based consumer counseling service last year. They did help her get her debts an a payment plan of $360 ($300 to the creditor and $60 to the service) per month for 6 years. They did not tell her that this would show up on her credit report and prevent from applying for a mortgage loan. To me this seems like a "soft" bankruptcy. Her score with this information on her credit report is 580. Can anyone answer the following questions? 1) Can she by pass the service and pay the creditors herself and still pay them their service charge of $60 per month. Will this action help with removing the notation from her credit report.? 2) If she breaks her agreement with THEM, can they make her credit situation worse? 3) Would it be best to send a form letter to her creditors asking ther permission to bypass the counseling service? Do they care as long as they get their money? 4) If she stays with the counseling service is there a way to remove the notation from her credit report.
??? No its voluntary They would probably not give her the interest/payment breaks No...its the creditor that is putting it on her credit report - not the counseling service.
Re: Re: Getting Out of Consumer Counseling Well, I had a meltdown. Of course there are ways to TRY and get it off her credit report. As George said, you can dispute, but there are no guarantees. Tell your friend good luck!
There are many variations of these services. Six years seems like a long time to commit to. Be careful. Before you just stop sending payments or send a cancellation, read the contract she signed. She may have to pay to cancel. I think most of them go month to month, but if she committed to six years, she may have a different kind of contract.
I am a NFCC/CCCS counselor. Regarding question #1 She is dealing with a very expensive service. Typically For a $300 payment to creditors the payment would be $20 depending on how many creditors are involved. At our agency if that number is less than 11 the payment would be $15. Our payback times are designed to eliminate debt in 55 months. Any notation " paid by counseling service " may or may not be eliminated when one begins to pay on their own. That notation is of lesser importance all the time. Credit Scores and cash flows are very important in determining what terms a person can get. You can apply for anything anytime, the trick is getting accepted at reasonable terms. We help people obtain financing by writing letters that indicate that our clients are paying regularly on our program. She should be able to quit the program that she is on without any penalty -- but she should read her agreements. #2 They can not make her situation worse by terminating her existing program. Only she can do that. There is a danger that the terms agreed upon with credit card companies could revert to preprogram rates or worse. The other side of the coin though is she may be able to get better terms on her own. I've seen it happen. #3 She would not have to write all creditors informing them the of the change, although it wouldn't hurt. jlynn is correct, they simply want their money. It doesn't sound as if your friend is really with a consumer cunseling service. Sometimes our program is not the best course of action for her. All possibilities should be explord. Many times after hearing about their situation I will recmmend a solutuion that does not involve our program but is in their best short term or long term interests.
Are there companies outhere claiming to be with consumer counseling that are in it for the quick buck?
There are (OR WERE) some that signed a bunch of people up and skipped town... There are some that ALWAYS MAKE LATE PAYMENTS (and YOU suffer the consequences)
Yes, some are in it for the money. They call themselves nonprofits, and find a way to make it legal, but they charge high fees and much of the money never gets to the creditor. Some take your first month or two of payments for "setting up" your account. Seems like you could use that better toward your bills. One of these companies is Ameridebt, which has a thread going as well: http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=379245#post379245
Ruuuuuuun! Some of these types of services are affiliated with the CRA's! And some are definitely commiting fraud. See link below: http://www.bizjournals.com/kansascity/stories/2003/09/08/daily35.html
