rnch saidthanks to a steady job and personal spending disipline; i am not in need of these "debt reduction" services.
i was just wondering if this program had done anyone any good.
What happens is the debt reduction companies negotiate a deal with the creditors to accept less than is owed....better something than nothing. The debt reduction companies get a kick back and your credit rating takes a dive.
Pay your credit cards in full every month! I recently got a notice from Bank of America that they want to charge me $59 a year for the use of their card....heheheh.......because they're not making any interest $$$ off of me.....CANCEL.......moving on to Discover......
Most credit card companies will waive any fees if you tell them you will cancel otherwise. Also watch interest rates - the same philosophy applies.
Keep in mind when a creditor accepts a lesser amount than is actually due, the IRS looks at the remaining balance as income and you are now expected to pay taxes on it. So if you owe $10,000 and you or a "credit counseling service" negotiates a settlement of $7,500 the IRS now considers the unpaid $2,500 as taxable income.