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Debt Relief – Insolvency – Bankruptcy Information » Debt Consolidation and Refinancing » Are there any debt consolidation companies that do bulk settlements that clear your credit quickly?

Are there any debt consolidation companies that do bulk settlements that clear your credit quickly?

I want to work with a debt consolidation company that pays off the debt on your credit report quickly and have you pay them monthly. I do not want a consolidation company that only pays the collectors as you pay them.


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5 Responses to "Are there any debt consolidation companies that do bulk settlements that clear your credit quickly?"

  1. ∞infiniti∞ says:
    There is no such animal.

    Debt consolidation companies work this way: You agree to pay them a certain amount each month.

    The debt consolidation company splits the amount among your creditors.

    The debt consolidation company receives a commission of 10 to 15% of your payment from the creditors.

    Your creditors are under no obligation to accept this arrangement from the debt consolidation company. Participation is voluntary.

    Your creditors can refuse to work with the debt consolidation company. They can opt to continue to collect from you and subsequently take you to court.

  2. CatDad says:
    They will only pay your creditors when enough money has been paid in by you to settle debts. They take their fees first. Debt consolidation is a risky move to take…be careful

    Stay away from any “debt consolidation” company that promises to cut your debt and payments in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.

    Many people who sign up with “debt consolidation” firms incorrectly assume that they have the power to force your creditors to accept settlements…they don’t. Your creditors have the right to refuse settlements and take you to court.

  3. Reena says:
    Listen to CatDad and Infinit – there really isn’t such an Animal as you describe.

    I am busy reporting the “Nigerian fake loan” spammer….

  4. bdancer222 says:
    You want a consolidation loan — you take out a big loan that pays off all your debt and then you make payments on that loan. This will only work if you are disciplined enough to not run the credit cards back up.

    It also depends on whether your credit is good enough for a unsecured loan large enough to pay off the other debts. It it harder to get large unsecured personal loans. You have to have good credit to qualify.

  5. sburtonhome says:
    There is a lot of confusion as to the difference between “debt consolidation”, “debt settlement”, and “debt management”. It sounds like you are looking for a hybrid of debt management and debt settlement which I don’t believe exists. In order to accomplish what you are looking for you may be best off just consulting with a non-profit consumer counselor and then handling your situation on your own. Here are the 3 most typical alternatives for bankruptcy:

    1) Debt Consolidation. This is an option where you take all of your debts and combine them into one loan with a lower interest rate. This option has it’s advantages as well as disadvantages. The advantage is that doing this will typically not hurt your credit and if disciplined, allow you to pay off your debt sooner. The disadvantages are that i) many of us are not discipline enough and often just go out and borrow more compounding the problem, and ii) often the consolidation loan is secured against your home. This means that you will most likely convert unsecured debt (ie credit cards, medical bills, etc) that is more easily discharged through bankruptcy or settled through debt settlement into secured debt that puts your personal home at risk if you default.

    2) Debt Management Plan (Credit Counseling). Debt Management typically involves a third-party company (usually non-profit) negotiating a lower interest rate and/or longer payment term on your debt. This helps you to lower your monthly payment. The company is paid by your creditors directly for their services. The advantages to this option is that you are able to pay off your debt without excessive creditor harassment or without the risk of getting sued for non-payment of debt. The disadvantage is that it will typically take longer to pay your debts off, hurt your credit score, if you miss a payment the creditors often have the right to revert back to the old terms of the agreement and the company helping you often is beholden to their boss – your creditors.

    3) Debt Settlement. Debt Settlement involves you (or a third-party company you hire) settling your debt for an amount 40-60% less than what you owe. With Debt Settlement, you stop paying your creditors and begin setting aside funds in a settlement account you own to settle with creditors. As the account grows, creditors will be settled one by one. The advantages to debt settlement are that you typically pay off your debt in a shorter amount of time and pay less than your initial principal. You also maintain control of your settlement since funds are placed into a settlement account owned by you rather than sending them to your creditors. The disadvantages are that it will hurt your credit (since creditors typically will not settle until you are at least 6 months late), that you will have to deal with creditors’ collection practices, and, if you hire a company to help you, you will have to pay that company anywhere from 10-20% of your debt amount.

    You would be best off consulting with your attorney as to your situation, exploring your options, and then making a decision based on that.

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