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consumer credit counseling - the reality
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Posted by Linda on January 19, 2002 at 11:15:51:
In Reply to: Re: Debt Consolidation posted by Jackie on January 15, 2002 at 15:27:38:
Jackie, Although all of the credit card companies will technically agree to the terms laid out by CCCS, they do not actually honor that agreement in their day to day practices. So, say you set up your payment date to CCCS for the 15th of the month, and you have due dates on the 1st, the 5th, and the 10th of the month. So you make every payment to CCCS on time, and each month you are getting 1 late pay reported on each account. Each of those 3 credit card companies will consider your payment late even though they have agreed to CCCS' terms. If it is *THE* CCCS that you are dealing with, your payments will actually be made and your fees are not outrageous. Many of the companies advertising this "non-profit" service on the web, however, are not so hot about making your payments. There are horror stories everywhere about "debt consolication" services who hardly ever made payments, and the debts were actually defaulted. The so-called service was just taking most of the money in fees that were not accurately (or understandably) disclosed. Lets say, for our purposes, you are dealing with an ethical counseling service. The first thing they do is close all your accounts and negotiate a settlement amount with each card company. BAM!! charge-offs atart appearing on your credit report. In addition, the counseling service reports you as being "in credit counseling" (a very bad thing to have reported). Then you start making payments and many of them are actually being made late - so the late-pays are reported - over and over and over, for however many years it takes you to fulfill your obligation to CCCS. Most consumers, thinking they are doing the right, responsible thing, expect to see clean credit reports when they have finished paying off a CCCS contract. So, their nightmare supposedly over, they go off to buy a new car - since they have cleared it all up in a manner endorsed by the credit industry. And they get turned down for the car loan, or offered a 21% installment agreement, where they will be paying for the car 10 times over. Upset, they send for their credit reports, and what do they see??? The mess that CCCS has created for them!! All of it true, all perfectly legal. So, they sweated and squirmed and did without, and made their CCCS payments for 3 years without fail. A totally trashed credit report (which will be that way for the next 7 years) is their reward. Never mind that they had cancer, or the breadwinner died, or an ex refused to pay their child support. Chapter 2 follows.....
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