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Debt Relief – Insolvency – Bankruptcy Information » Debt Consolidation and Refinancing » Are there any debt consolidation companies that really work?

Are there any debt consolidation companies that really work?

With the current economy, and my work hours being cut, I’m in need of some serious credit card help. It’s now a decision between the credit cards and housing/food. If I could reduce my debt and make significantly lower monthly payments, it would be a life saver! Do any of these companies really do what they say? Also, what would be the impact on my credit ( as opposed to bankruptcy ), and how long would it take for this to drop off my credit bureau. I’d appreciate any advice.

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4 Responses to "Are there any debt consolidation companies that really work?"

  1. Judy says:
    Get a book on Credit / Debt Repair
    from your bookstore or library.
    First try to do this on your own, before paying thousands to a company.
    The books will teach you how to clean up your reports.
    You can negotiate, settle, and do the pay on delete on one time charges.
    /
  2. PooPooLaTrash says:
    Some of these companies are legit, but as Judy said, they often accomplish no more than you can do yourself by negotiating with your creditors, and is something you can accomplish for free.

    A debt paid off by negotiation is reported in a derogatory manner, but not as bad as if you default and / or if it is charged off and sold to a collection agency.

    All derogatories stay on your credit report for 7 years and a Chapter 7 bankruptcy can remain for 10 years. A Chapter 13 bankruptcy will remain on your credit report for 7 years, but often allows for a more reasonable repayment plan than straight repayment and the companies cannot assess further interest and fines.

    My advice would be to get consumer credit counseling to explore your options. Go to http://www.nfcc.org/ and click the “Find a counselor” link (direct link: http://www.nfcc.org/FirstStep/firststep_01.cfm). Explain your situation to the counselor and they will advise you on how best to proceed.

  3. Jason Alexander says:
    Hi -

    What they usually do is buy off your bad debt from your creditors, then try to collect. So, it depends entirely on which company you choose to work with, and if your debt is even for sale. If it’s relatively new, most likely it won’t be sold yet.

    Some companies won’t even sell your debt and will pursue you relentlessly.

  4. Jaycee says:
    There are some debt consolidation companies that will negotiate a settlement with your creditors. However, using their services may harm your credit rating. It’s hard to say how long this negative information will stay on your report, but it’s safe to say it can be a blemish on your credit for years. Some debt consolidation companies may renege on your credit card bills and leave you to deal with the problem, all while they’re taking your money. You need to really research debt consolidation companies to make sure that they’re reputable and won’t leave you out on a limb.

    You’re better off getting a low interest debt consolidation loan on your own from your bank or credit union. Then use that money to pay off the high-interest credit cards yourself.

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