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9/19/2017 7:27:10 PM
Posted: 8/14/2002 6:43:46 PM EDT
I have a question... I'm sure most of you have noticed in the past few years these debt consolidation services have been getting more and more popular as a way to avoid bankruptcy. They advertise in TV commercials, Internet popup ads and on the radio. They are everywhere. What they do is they will take all your credit card bills, and negotiate with the creditors so you make one payment and get out of debt. Now I should say, I'm not considering signing up for one or anything, but they advertise everywhere, and I heard the 5th commercial for one today so now my curiosity has gotten the better of me. These companies claim to be non-profit. I.e. they are just there to help you, but damnit if something about them doesn't seem fishy. There are too many competing services out there...the ads are too slick. They make too many promises. Everytime I hear one of those ads, it makes me think of some kind of scam...like those diet pills that say you can take one pill a day, eat like a pig and sit on the couch and still lose weight. I don't trust them. So what's the REAL story??? I should say that my ex girlfriend piled up too much credit card debt and signed on with one of those services, and she said that they were pretty helpful for her...there was no apparent catch, so maybe there's something to it. But who's paying for all these damn ads? Not the credit card companies??? Anyone know the story behind these things? -Nick Viejo.
Link Posted: 8/14/2002 7:01:16 PM EDT
THey can be operated by almost anyone, but the vast moajority of them are run by the credit information bureaus (TRW...Et al). THis way they know exactly what you have, what you can afford and all of your personal history (which is quite valuable). One thing none of them ever mention is, is that your credit suffers pretty badly when you use them, the credit agencies still report deliquent payments, even after you negotiate with them, they also report how much they allowed you to squeeze them for. Try getting credit of any kind after you have a third party handle your debt. Bad juju there, cut up your cards and religously pay off your debt, remember, TANSTAAFL.
Link Posted: 8/15/2002 4:43:10 AM EDT
[Last Edit: 8/15/2002 4:44:39 AM EDT by mcgrubbs]
Link Posted: 8/15/2002 7:55:23 AM EDT
who is dave ramsey
Link Posted: 8/15/2002 8:03:47 AM EDT
[url]www.daveramsey.com[/url] Smart man. We are on a 3 year plan to be debt free except the mortgage, after that we go after it.
Link Posted: 8/15/2002 8:30:20 AM EDT
I'm a mortgage banker and I can verify that it will pretty much ruin your credit almost as much as BK-13. If you own a home, refinance it to pay off your credit cards and then CUT THEM UP!!! I see this crap everyday, and it makes me just as mad. Just because somebody is a "non-profit" org, it sounds like they are out for your best interest. Personally, I'd rather trust somebody who is a financial professional as opposed to someone who works for a non-profit org and probably makes just over minimum wage... Have you ever seen some of these yahoos? F'N hippies
Link Posted: 8/15/2002 8:53:19 AM EDT
Curiousity got the better of me one day and I called them up to see how it worked. Pretty slick scam from the one I called. Presumably you don't pay them for their services. Really they take interest from you. They always have at least one month of payments from you in their bank accounts earning interest. So you start atleast one month behind. So even if they only have 500 customers at an average of 500 bucks a month you figure they are holding 250,000 at any one time in the bank of your money gaining interest.
Link Posted: 8/15/2002 4:35:51 PM EDT
Thanks for the responses so far guys, they've been enlightening. As for them making a profit--I don't begrudge them for taking in more money than they paid out (running "in the black" so to speak) because ANY organization has to do that to survive. I am beginning to understand how they are scamming people, though...although I have never filled out one of the applications for such a service, I can imagine that they go through your bank account balances with a fine-toothed comb, thus the credit reporting agencies learn more about you than they ever would have known. I'm sure plenty of people will pay well for such information, as well. One other thought--I thought there was a law that said that if a corporation was non-profit, then they had to make their yearly financial statement publicly available. Is this really the case? I'd like to download some of the statements from these debt consolodaters. -Nick Viejo.
Link Posted: 8/15/2002 7:52:26 PM EDT
Link Posted: 8/16/2002 7:37:19 AM EDT
[Last Edit: 8/16/2002 7:41:51 AM EDT by Kingme]
Ever notice that people ususlly reply by saying somebody should do this and somebody should do that? And if they did this and if they did that, then our country would be better? Do you notice that they're not doing anything? Seems like they want to maintain their convenient life style while someone else does the work to get things turned around. Ain't gonna happen. People like their credit and don't understand that to turn this country around will depend on THEM making a sacrifice. THEY are the ones that will have to give up convenience for inconvenience. Otherwise the banks will dictate what you do. Then they wonder why USA is in financial trouble. Look at Argentina. Credit was their downfall. This is your country (picture an egg). This is your country on credit (picture an egg frying in a pan).
Link Posted: 8/16/2002 8:14:50 AM EDT
Link Posted: 8/16/2002 8:30:26 AM EDT
What DK-prof said. I have seen the same thing many times.
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