has anyone/know of anyone who has benefitted from the "debt reduction program"?

  • rnch

    Posts: 11525

    Mar 27, 2011 11:34 AM GMT
    i keep seeing ads from places like lowermybills.com that want to help peeps with excessive credit card balances get their debt load legally reduced or eliminated.

    are these sites legit?

    do they do as they claim?

    do you know of someone who has taken advantage of the debt reduciton act and had their high credit card load reduced?
  • tatootim

    Posts: 15

    Mar 27, 2011 1:49 PM GMT
    I have heard that your credit can take a strong hit if you do that. You might try looking at a credit forum online to see what people say there. I personally created a list of all my debts, and then starting with the smallest one paid them off. Good luck
  • wander2340

    Posts: 176

    Mar 27, 2011 2:39 PM GMT
    In real estate this issue comes up a lot when peopel are trying to get a mortgage. In my experience it is best to negotiate with the your creditors on your own. They will play hard ball with you and your credit will most likely take a hit but it may be worth it. Using a credit counseling organization will almost always make bad credit look even worse. Pretty much all they do is negotiate with your creditors for you. Educate yourself on how best to negotiate with creditors and do it on your own. Just make sure you get any negotiated agreements in writing.

    A good general rule of thumb is to have no late payments and at least 3 accounts that are "paid as agreed" during the last 12 months to be considered a good credit risk.
  • rnch

    Posts: 11525

    Mar 27, 2011 2:52 PM GMT
    thanks 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.


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  • masculumpedes

    Posts: 5549

    Mar 27, 2011 6:25 PM GMT
    tatootim said I personally created a list of all my debts, and then starting with the smallest one paid them off. Good luck



    Same here...to me it was the only way to go. icon_wink.gif
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    Mar 27, 2011 6:33 PM GMT
    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.


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    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......icon_wink.gif
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    Mar 27, 2011 6:38 PM GMT
    Did this a few years ago with CCCS... never signed up for their plan, but met with them, got some great advice and tackled it myself. Happy to say, I'm one year away from beign debt free and feel soo good about it! THe counselor I dealt with still checks in on me. She told me to negotiate with my creditors, set up a payment plan and told me what they could actually do for me. It took several tries with them, but I didn't give up or back down AND I payed off my entire debt. So, CCCS is the way to go... they really saved my sanity.
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    Mar 27, 2011 6:40 PM GMT
    turbobilly said
    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.


    icon_cool.gif


    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......icon_wink.gif


    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.