Quoted:
Quoted: When I was making better money I got a credit card thats now a burden. I'm still in a position to make payments but not much over monthly charges so the balance is going nowhere fast.
What can those companies that help with debt do for me? Do they negotiate better payments or more $$ towards the principal, what? How do they go about it?
|
Will debt-counseling affect my credit? Using a debt-management plan to pay off debt won't hurt your credit score, but it may make it difficult to qualify for new credit.
When you enroll in a debt-management program, you write a monthly check to a credit-counseling agency and the agency pays your creditors. A debt-management plan usually lasts three or four years. A comment stating that you're paying an account through a credit-counseling agency appears on your credit report and remains until the account is paid in full. Such a comment won't hurt your credit score in the least.
However, if you get involved with a debt management agency that is late making payments to your creditors -- or doesn't make any payments at all -- your credit will be damaged.
Go here for more info www.bankrate.com/brm/news/debt/debt_manage_2004/pro-help-faq.asp
|
+1 on this...
Depending on how savvy you are, you can do everything a debt counselor will do for you and without charge. Granted, you don't typically have the bargaining power that a credit counselor does but if creditors know that they can either work with you and get paid or you will take bankruptcy and they will get little to bupkiss, you can negotiate.
If you are savvy, you might contact your creditors directly to bargain for lower interest, etc... just don't let them sell you an extension of credit or offer to spread out payments at a higher rate of interest...if you have debt problems it is important to stop relying on credit ASAP. If you find that you cannot, a BK may be in your future.
Tread carefully, I have filed BK for a vast number of people who had little to no result with a credit counselor. Of course, if they have a good result, they don't come to see me so take my observations with a grain of salt. Remember, most credit counselors operate for a fee and are therefore your creditors as well... they are typically looking out for their own best interest, not yours.