What are some LEGITIMATE "debt consolidation" companies/services

[bobbyw24]

Alternatives to Bankruptcy

by Nicholas Ortiz, Boston Bankruptcy Attorney
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Most people would like to avoid bankruptcy if they can. Sometimes alternatives are worth trying, but it pays to know the risks. A good bankruptcy lawyer never pushes someone into bankruptcy but, instead, lays out the options and lets the individual decide. Here’s a bit of information about commonly-tried bankruptcy alternatives.

1. Debt consolidation: If you are able to get a loan to consolidate unsecured debt into another loan, it can make a difference if the new loan has a lower interest rate or longer re-payment term. This solution is one that makes sense for people who can almost pay all their debts, but are struggling a bit and want better repayment terms. One must understand the risks if unsecured debt is transformed to secured debt on your home as part of the consolidation. If something goes wrong with the new loan, the future consequences will be more severe, i.e., your home will be in jeopardy.

2. Debt settlement:Once a debt goes into extended default, it can often be settled for less than the face amount–often much less. If a debt is deeply in default and has been purchased by a debt buyer, it is realistic to attempt to settle such a debt for between 30 to 60 percent of face value (sometimes less, sometimes more). However, there are a few traps for the unwary. Once debts have traveled into lengthy default, they have usually ballooned to a much larger face amount (due to interest and fees) than they were when you stopped making charges. So, 50 percent of a future amount may sometimes look a lot like 100 percent of a current debt balance, but it depends on the circumstances and time periods involved. There are also important tax consequences to debt forgiveness. Moreover, in trying this approach, one needs to be ready to deal with the sometimes annoying contacts from debt collectors for an extended time period. However, debt settlement can sometimes make sense for people who have (or can save) enough cash to make realistic offers to debt buyers. This is something that you can usually do yourself. Beware of companies who specialize in this work: most are scammers.

More:

http://www.bankruptcylawnetwork.com/...-bankruptcy-2/

[bobbyw24]

The lead article in the Economy section of the June 18, 2010 New York Times offers revealing insight into the practices of “debt settlement” companies. Debt settlement companies position themselves as alternatives to bankruptcy, suggesting that they have insight into “secrets that the credit card companies don’t want you to know.” In fact, the business models used by debt settlement vendors is fairly simple. As the Times article explains:

In the typical arrangement, the companies direct consumers to set up special accounts and stock them with monthly deposits while skipping their credit card payments. Once balances reach sufficient size, negotiators strike lump-sum settlements with credit card companies that can cut debts in half. The programs generally last two to three years.

The problem, however is this:

http://www.bankruptcylawnetwork.com/...om-regulators/

[Danke]

...

You're back...did you get banned from DP?

[jclay2]

Don't do Debt CONsolidation (as dave ramsey says). Pay your debts off one by one and call up your creditors to see if they will settle the amount owed for a cash discount.

[ZENemy]

www.Lexingtonlaw.com

I used this when I cared about my credit and debt, they get you started by sending letters to creditors to find and clean up errors. It worked pretty well until I learned to do it all myself.

[Jordan]

No one is going to give them a consolidation because they're unemployed. Loaning money to people who make $0 is dangerous as hell.

Now would be a good time to start assessing options if they're feeling the pinch. I'd start carefully considering the odds of finding a job soon. And also the idea that the endgame might be bankruptcy.

There isn't nearly enough information here, and I wouldn't want you to post it publicly, but sit down with your family and tally what they owe each month, the interest rates on each debt, and which are really necessities (home) and which can be told to go to hell (store credit cards, or something).

[Jordan]

Don't do Debt CONsolidation (as dave ramsey says). Pay your debts off one by one and call up your creditors to see if they will settle the amount owed for a cash discount.

Dave Ramsey is a moron. This will never work. In the cases that it will (like an old collections problem from years ago) this strategy just risks ruining your credit by extending the life of a bad mark (paying on it makes it fresh again, meaning it'll sit on your credit report for 7 more years) or a lawsuit for a judgment against you (because they know you have money now).

Dave Ramsey doesn't care about credit reports or scores, again because he's an idiot, so he can fling around this advice without considering any of the disadvantages. Listen to him at your own risk.

[jclay2]

Dave Ramsey is a moron. This will never work. In the cases that it will (like an old collections problem from years ago) this strategy just risks ruining your credit by extending the life of a bad mark (paying on it makes it fresh again, meaning it'll sit on your credit report for 7 more years) or a lawsuit for a judgment against you (because they know you have money now).

Dave Ramsey doesn't care about credit reports or scores, again because he's an idiot, so he can fling around this advice without considering any of the disadvantages. Listen to him at your own risk.

His system works. I have seen people use his methods and be successful in turning around extremely dysfunctional lifestyles and massive debts. You can keep your bs credit score. High Credit Score = "I am a good little debt slave".

[Jordan]

His system works. I have seen people use his methods and be successful in turning around extremely dysfunctional lifestyles and massive debts. You can keep your bs credit score. High Credit Score = "I am a good little debt slave".

Typewriters work. I have seen people use typewriters to turn around poor handwriting and compose excellent legible papers and letters. You can keep your BS word processor.

Dave's system works like typewriters work: poorly and slowly.

Credit scores are used to find good employees and price insurance rates. There's more to it than Dave's simpleton perspective that you're repeating. P.S. You don't need debt to have a high credit score.