Re: Question on new BK law

Posted by WoodWorker (172.193.193.243) on December 31, 2003 at 17:48:33:

In Reply to: Re: Question on new BK law posted by Paul on December 31, 2003 at 17:14:44:

Some good points. Made me think how much of our economy is based on credit/debit. One person's liability is another person's asset (OK, I'm reading the Rich Dad/Poor Dad books right now). At least I know the difference between good debt/bad debt. It seems almost all major purchases people make (house, car, schooling, home theater system, etc.) involve going into debt, and if you slow down borrowing, you'll stifle the economy. BK has to be a part of that equation or else people will be less likely to borrow. Going back to debtor's prisons would kill the economy as we know it.

So, it sounds like the required "credit counseling" would just be education, not a CCCS payment program. I personally got screwed on a CCCS program, partly because I went through an agency which was just a recruiter for the real CCCS (they took my first payment of $2500 for themselves as a commission [no, it wasn't Ameridebt]). I then lost my job and could only afford to pay a third of what I was paying before. However, my creditors wouldn't "accept" the lower amounts (creditor participation in CCCS is voluntary). Eventually, my accounts all charged off and I'm now in the situation I'm in. Ironically, when I told someone at CCCS that I needed to reduce my payments, the guy suggested that I should declare a Chapter 13 BK. And I was told that CCCS was an alternative to BK. They're partially funded by the creditors and hide under non-profit status. A bunch of BS from what I can tell; they work for themselves.

I'm not saying CCCS is all bad, but based on my experience I would recommend/advise a few things:

1) Don't use a CCCS that has a large up-front fee;

2) Don't use a CCCS that has a large service fee (should be less than $50).

3) CCCS will ruin your credit. Lenders consider it one step away from BK.

4) CCCS is only good for reducing interest and suspending late/overlimit charges. It doesn't seem to be too good for lower monthly payments. Creditors generally want the whole debt re-paid in five years.

5) You'll lose available credit you may have, as you have to close those accounts that you put on the program.

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