Consumer Credit Counseling vs. Debt Settlement Companies
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Posted by Bob3
(216.51.101.95) on September 20, 2003 at 14:13:58:
I thought CCC type companies were low lifes, these DSC's make them look good. Stay away from both!! + + + + +
How Debt Settlement Companies Can Make Your Credit Worse
The difference between that and credit counseling is significant.
Debt settlement companies collect money from consumers every month and do not disburse payments until they have collected enough money to negotiate a payoff on an account. It could take two or three years to collect enough money to pay off one creditor. During this time of nonpayment the majority of the creditors will likely sue the consumer, further destroying a poor credit history. The debt settlement company may offer a creditor 50% of the balance in full to clear the account. There is no guarantee a creditor will settle for less. Credit counseling agencies accept money from consumers and promptly disburse payments to creditors, often at an agreed on reduced schedule. The debts will be paid back 100%. Some creditors who agree to participate in this program also agree to stop collection activity on the accounts. Some creditors may report "special arrangements" on an individual's credit history. Paying re-negotiated payments every month have a negative impact on one's credit history when compared to someone who makes the full payments on time each month. Credit counseling clients do not emerge from the program with a severely damaged credit history as those who spent three years in a debt settlement program. (But still damaged!! -- Bob3)
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