Can consumer credit counselors really negotiate debt?
A co worker of mine said that she had several thousand dollars in debt and she said she is only paying a fraction.
Sounds too good to be true. . . .
and. . she said that it was free from the state of california. .
I generally wouldn’t believe that. Most credit counselors negotiate a payment option and work as a negotiator between you and the creditor. Basically, if it’s too good. It probably is.
yea its true. And you dont even need a credit counselor. You can do it yourself. Problem is you have to be at least 3 or 4 months behind. Then your credit is trash. We did it on $16,000.00 debt. We only paid $8,000.00. But you have to get it in writing.
Yes … this does happen. There are a lot of variables though. How much do you owe? Does the creditor think you can make the payments as they are or will you default? I have a friend that did this through Credit Management. The good thing is…. the interest is cut.
If you have several debts, the management company combines and negotiates them and you make one payment per month. You cannot incurr any new debt however. Ultimatley you pay a lot less. And the monthly payments are much easier to manage.
Usually the management fee is part of the monthly payment and you pay a small setup fee at the beginning.
There are some bad people out there though. Be careful who you deal with.
Hope this helped
There are reputable credit counseling agencies and some are just scams. Most creditors will accept smaller monthly payments, while you are working with a credit counseling agency and in return will lower or eliminate the interest and waive the late and/or overlimit fees. Make sure that you check with the Better Business Bureau before you sign any agreement and pay any fees. Once of the best nationwide agencies is Greenpath Debt Solutions. http://www.greenpath.com
consumer credit counselors will hurt you credit, you can do it yourself.
When you are stuck in debt, consider all the available options. You will need to work closely with experts who will provide right guidance to clear off your debts. Credit counseling agency is one such set of experts, equipped to fight debt. These agencies have a program meant to solve each of the situations.
http://www.complete-debt-info.com/category/Credit-Counseling-Programs.html
Any consumer can dispute a debt at any time. It depends on how old it is and is it still with the OC (original creditor) or been written off and sent to collections? The next question is has the statute of limitations run out on collecting the debt? SOL in state of CA is 4 years. SOL is based on the DOLA (date of last activity, your last payment). Whatever you do, you DO NOT PAY THE COLLECTORS if you dispute the debt. It restarts the SOL and then you’re SOL.
This was my experience with collections, not original creditors. 2 years ago I had over $20,000 in (mostly time barred) debt. Now I have a FICO score of 670 and I didn’t pay anybody to negotiate on my behalf. I only became familiar with how to make collectors obey the law because many of them don’t. You need to become extremely familiar with the Fair Debt Collection Act because collectors know that most consumers are naive. Calling you is nothing but a pissing contest because it’s not admissible in court, the last step of the collection process. You tell them, “put it in writing” and you hang up. Once you have a nastygram (a dunning letter), you respond with an “I dispute this debt” (google for responses to dunning letters. It needs to say, “This is not a refusal to pay, but a request for validation. Please submit proof that the SOL has not run out etc.) and you copy paragraph 804/805 of the FDCPA and send it to them with “I demand you cease telephonic communications. The only way you can communicate with me is through the USPS.” This should end the calls (if it doesn’t it’s a FDCPA violation, $1000 fine) and generate a nastygram (dunning letter.).
Once you have the dunning letter, you have 30 days to respond to it with your dispute. You send your letter Certified Mail, Return Receipt Requested so you have PROOF when the collection agency received it. If they don’t respond with proof (something that shows the date of last activity or your indebtedness.) within either 30 or 45 days, I don’t remember, you then have enough information to write to the credit bureaus to say the debt hasn’t been validated in X amount of time, please delete the derogatory mark from your report. If the derog reappears on your credit report without a response to your request for validation, that’s a FDCPA violation. You do not put your signature on this letter because it can be used to create a bogus affidavit if they decide to sue you.
If you receive a dunning letter on old debt (buying a house is a great way to awaken junk debt buyers – I just got a dunning letter on a 10 year old debt after purchasing a home), you need to dispute it even if the SOL has run out because if you don’t, your silence is taken as tacit admission the debt is valid. Then they can sue you. When you are a no show in court (even though the SOL has run out), the judge will rule against you and you WILL be on the hook with a judgment against you for a debt you shouldn’t have had to pay due to it being time barred.
If it comes back validated, you can play this game once a month until someone screws up and doesn’t respond. You keep copies of your letters and those green cards because that is your proof.
Who am I? I am a consumer who was put through the ringer by abusive collectors. I never intimated that I hadn’t at one time owed the money, but just as a criminal is entitled to due process, so is a debtor!!!! If they couldn’t follow the law and the statutes of limitations to collect from me, then I had no obligation to pay them, especially when the company to which I owed the money wouldn’t see a DIME of it. (Google 3rd party or junk debt buyers or junk debt collectors, then see if the agency harassing you is listed on the first link I have provided below. I have been threatened with prison time, threatened to have my current utilities shut off and the list goes on. I decided to get educated and fight back. For most of my debt the SOL had run out, but I also played an arduous 18 month game of cat and mouse with one where the SOL had not run out. I disputed all my debt (old debt, about $20,000 worth) online through that free nameless once a year site. NOTE – DO NOT DISPUTE THE DEBT AS “NOT MINE”. This will generate a code with the credit bureaus to request an affidavit of identity theft from you. Use one of the other options. I always used “never got the bill.” The only debt that was verified was my student loan. I didn’t have to do any follow up because the items just dropped off because I disputed as SOL had run out.
Depending on the age of the debt and the tenacity of the collector, it can be fairly easy to dispute. It was a cakewalk online. Once I had my report #, I could log in at will for a year (they may have changed this, this was 2005) to see what had been removed. Oftentimes the creditor will not validate on a dispute because it’s not worth it, or they will respond with some computer generated BS with no dates on it, or dates showing the debt is now time barred. In that case you write a second letter referencing the first letter in which you stated you need proof the SOL has not run out. They’ve bought the debt for pennies on the dollar and it’s pure profit to them because the OC has written it off.
Caveat – If you have moved state to state, the SOL could have tolled (started over again) and I am not familiar with how that works. I was a lifelong California resident when I disputed my debt.
What do you have to lose? If it’s already on your credit report, all it can do is either remain or be removed.
Signed, Robinhood