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Posted: 8/26/2004 7:04:36 PM EDT
I have seen members criticize debt consolidation companies and credit management companies in several threads here. Not that I'm taking any sides but why are they so bad for people trying to get out of debt/reestablish good credit?

This is a very serious question btw. An ex coworker of mine filed for bankruptcy at 22 years old because she didn't want to go through the debt management stuff after getting into debt.
Link Posted: 8/26/2004 7:11:08 PM EDT
The "debt management" companies are a freaking scam. On your credit report it's the same as a Chapter 13 filing, with the added benefit of getting to pay these retards $30 a month for them telling you what a budget is.

If you want to go Chap13 instead of Chap11, just pay a bankruptcy attorney the small fee up front and have them get it done. A guy my wife works with just did it, he wrote the attorney 12 monthly postdated checks for $60 each, and he was good to go.
Link Posted: 8/26/2004 7:18:48 PM EDT
The irony of debt consolidation loans is the fact that the same discipline problem that got the person into the bind in the first place has not been cured. Too often, the 'extra money' is seen as more disposable cash to burn. Ergo, no progress...

With a bankruptcy, at least there is defacto control of your credit.
Link Posted: 8/26/2004 7:25:29 PM EDT
There are some legit ones out there, good news is you can do the same thing yourself.

Also it is the same as filing a chapter 13 on your credit report if you use a service.
Link Posted: 8/26/2004 7:25:48 PM EDT
[Last Edit: 8/26/2004 7:27:10 PM EDT by Sammich]
So in effect it would be better for a person to file bankruptcy than to go throuhg debt consolidation?

ETA: So a person can make more progress speaking directly with the creditors than debt management?

Also thanks for the replies.
Link Posted: 8/26/2004 7:27:25 PM EDT
[Last Edit: 8/26/2004 7:30:01 PM EDT by MMcCall]

Originally Posted By Sammich:
So in effect it would be better for a person to file bankruptcy than to go throuhg debt consolidation?

Depends on the amount of debt vs. the person's income and their feelings about personal responsibility, IMO.
Link Posted: 8/26/2004 7:42:29 PM EDT
Ahh, ok, thanks!
Link Posted: 8/26/2004 8:25:16 PM EDT
Well crap.

I wish I would have known about this before I did debt consolidation a year ago.
Link Posted: 8/26/2004 8:34:26 PM EDT
Do a Google search with "Ameridebt" and "lawsuits." You'll be up all night reading (when you could be here!).
Link Posted: 8/26/2004 8:43:15 PM EDT
A good debt consolidation company won't charge you.
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