Re: Anyone had success with Debt Reduction Companies?????????????????????

Posted by Drew (24.59.27.46) on July 01, 2004 at 22:00:52:

In Reply to: Anyone had success with Debt Reduction Companies????????????????????? posted by ANON on July 01, 2004 at 15:54:33:

These are scams.

This is what will happen. They will collect your payments that you are supposed to be paying to your creditor. THey are supposed to be doing that. They will then put them in a special fund and not pay them hoping to play hardball with your creditors and force them into wanting to settle. This will only tick your creditors off.

YOur creditors will put you as a late pay for three months on your credit report. Your credit rating will tank like a sinking ship. THey will then force your creditors into a charge off mode and they will cancel your accounts, write you off and you are in worse shape than ever.

You are much better following a slow steady plan of paying the minimums on the higher balances, and paying more on the lower balances until you get them paid off. Cut up all your credit cards except the one that has the lowest interest rate and is your best card. Try and preserve that one. Pay the others down and don't use them. This plan will take about three to five years if you are disciplined about it. The key is always to pay at least $200 more than the minimum on it.

There is no easy way out of debt. Also if you are in debt consolidation, your creditors will report you as being in a counseling program which will sink your credit score a bunch.

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