Comments on: What Do Debt Consolidation Services Offer?

By: Free Money Finance

Free Money Finance — Fri, 24 Feb 2006 12:06:06 +0000

Star Money Articles for the Week of February 20

My favorite posts this week from the MoneyBlogNetwork members and beyond: AllThingsFinancial started his series on college funding math. Five Cent Nickel details Dave Ramsey’s Baby Steps. Blueprint for Financial Prosperity questions What Do Debt Cons…

By: Matt

Matt — Thu, 23 Feb 2006 06:05:25 +0000

I’ve known some people for whom such services are a viable and reasonable option. When bill collectors are hounding you around the clock, to the point where you’re seriously contemplating suicide as a solution, your interest rates and fees and penalties are crippling your budget, and even without taking more credit out you’re still falling further in debt every month, even paying debt-consolidation fees and 20% interest (which, in situations like that, is typically a lower rate than you’re already saddled with) can be a bargain.

It’s better for your credit than Chapter 7. And it’s better for your friends and family than putting a gun to your head. If those are the only alternatives you can see, then debt consolidation is a good deal for you. And yeah…like I said, I’ve known people in that position. I’ve been within 3 weeks of that position myself.

It’s definitely not for everybody. If your situation isn’t desperate, if there’s any way you can get out from under your debt on your own power, then this probably isn’t for you.

By: Michael

Michael — Wed, 22 Feb 2006 18:38:29 +0000

I had a completely different experience when I used CCCS from 1999-2002. Before then, I had a fatal combination of being poor and stupid. I racked up about $18,000 in credit card debt after college and was only paying the minimum payment about 90% of the time. I met with a rep at CCCS who, while I was there, called the 4 different CC companies and negotiated with them. I ended up getting 0% interest on two of them and the other two were lowered from around 13-14% to 6%. CCCS looked at my budget and saw that I had no money to cover their fees, so they didn’t ask for any. All I had to do was promise that I wouldn’t take out any more CCs during the 4-year plan No problem there. There was no other loan company involved. CCCS auto-withdrew the same amount every month, and I would get a statement showing where they had applied it.

Four years later, I was completely debt-free, and in the 4 years since then, I’ve had a CC balance for all of 2 months (wedding costs). Nothing was reported on my credit reports, and two years ago my credit score was 760.

I’m sure there are some scams out there and even with the good ones, they might not work for everyone. But for me, it was a lifesaver and a turning point.

By: Miller

Miller — Wed, 22 Feb 2006 17:34:28 +0000

I can see how this would be worth it if your credit card companies are taking you for 30% or something ridiculous. A 10-20% loan sucks, but it’s better than that! Isn’t that the type of situation debt consolidation companies are aimed toward?

By: jim

jim — Tue, 21 Feb 2006 17:54:20 +0000

You should be used to it, you do publish a podcast. Just wait until Scott from Money Blogger Podcast comes knocking to do an interview. Hearing yourself in a podcast on someone else’s site answering questions… you’ll really feel awkward.

By: ncnblog

ncnblog — Tue, 21 Feb 2006 16:48:40 +0000

I feel famous… I have been quoted! Awesome baby! Dork!

Re-reading an email you sent always feels like listening to your own voice on an answering machine…very, very wierd.

ncn