Can I blame my money problems on Jim Kramer?

March 31, 2009 4:50 PM

Have you ever used a debt consolidation/management company? What was your experience with them like? Can you recommend one?

After doing a search on AskMeFi, I can't really find any recommendations - only people saying not to ever use one.

I don't necessarily want to discuss my debt or how to get out of it, I'm just looking for recommendations on debt consolidation companies.

posted by All.star to work & money (16 answers total)

According to Clark Howard, many of these companies are a rip off.

Does Clark recommend using a credit consolidation company?

No, consumers should avoid using credit consolidation companies. They usually want upfront fees and you may not get your credit problems resolved. Clark feels that Consumer Credit Counseling Service is the legitimate counseling service out there. They provide credit counseling for free and a debt management service for a three-to-five percent monthly fee not to exceed $50 (different for all states). Go to www.nfcc.org to find your local CCCS office.

posted by MegoSteve at 5:09 PM on March 31, 2009

My brother signed up with one of these places to help him salvage his debt problems. They just fucked things up worse.

As MegoSteve says, if you're going to do this, be sure to go through somebody certified by the National Foundation for Credit Counseling.
posted by jdroth at 5:35 PM on March 31, 2009

My friend signed up for this and got screwed. They tried to garnish her wages. Be very careful.
posted by E-Boogie at 5:38 PM on March 31, 2009

All.Star, look into the services of United Family Services in our area. I believe they have a regional office near you.
posted by Sweetie Darling at 5:50 PM on March 31, 2009

Seconding CCCS. They're definitely legit and also, everyone I ever had contact with was both knowledgeable and kind.
posted by crankylex at 6:09 PM on March 31, 2009

When I was looking for a credit counseling/consolidation company, I called my bank for a referral (one of my credit cards was through my bank). They suggested Take Charge America. I've found them to be highly reputable and professional. They were able to negotiate with my creditors and significantly lower my interest rates, in some instances to 0 or 1 percent. I have about 9 months left in what was originally a 4 1/2 year payoff plan and everything has gone as projected, with no glitches or causes for concern.
posted by SweetTeaAndABiscuit at 6:30 PM on March 31, 2009

Consumer Reports has two articles about debt consolidation. The bottom line was this:

"If you're in a desperate financial situation, consolidating might make matters worse. You may want to speak with a nonprofit credit counselor to help you decide if refinancing makes sense. "

-And about finding a credit counselor-

"Stick with reputable, nonprofit agencies that follow best-practice standards, employ trained and certified counselors, and are members of the Association of Independent Consumer Credit Counseling Agencies (www.aiccca.org) or the National Foundation for Credit Counseling (www.nfcc.org).

Usually, a credit counselor will give you basic advice free. Setting up a plan should cost $50 to $75 initially and $25 to $50 per month thereafter. If a counselor you're considering charges higher fees, or won't disclose them, go elsewhere. Be sure to check out any agency with the local Better Business Bureau and the state attorney general's office to see if there are any unresolved complaints."
posted by Houstonian at 6:38 PM on March 31, 2009

There were other good suggestions listed the last time you asked this... did these not work out?
posted by Houstonian at 6:41 PM on March 31, 2009

There were other good suggestions listed the last time you asked this... did these not work out?

Those were student loans - I'm looking to work on my credit card debt.
posted by All.star at 7:16 PM on March 31, 2009

I worked with a non-profit credit counseling service and they were top notch.

They negotiate with your creditors and pay your creditors for you, you send them a check. I never engaged their services, but had a couple of meetings with them, which were very helpful and encouraging.

The company was called GreenPath.

They insist you repay all your debt, and they collect small fees on the money they handle (you pay them, they pay the creditors on your behalf). The advice was free.

I was very happy with my dealings with them & decided I could handle my money problems on my own.
posted by MesoFilter at 10:52 PM on March 31, 2009

This will wreck your credit only slightly less than bankruptcy.

You don't need to do this. You can do everything the companies do yourself and you'll have a better understanding of how not to get yourself into this mess again.

I'd suggest starting with books by Dave Ramsey called "The Total Money Makeover" and "Finacial Peace." If you are not religious, the information in them still works. His primary motivation seems to be getting people out of debt so they can give their money away, which is once of the best idea's I've ever heard.

I was sitting with more than 60k of debt 7 years ago and considered the Credit Counselors. I had a windfall and got out of it but then ran it up to 40k again within a few years. It took a total revaluation of my spending to get this worked out, something a credit counseling service won't do.

You can do this.
posted by bensherman at 7:58 AM on April 1, 2009

I dug my self a huge hole by being out of work for 6 months and I've been with CCCS (mentioned above) for almost two years now.

I know the common theme is that credit card counseling is a rip-off, but I would never have been able to pay off my debt if I hadn't signed up with them. I tried negotiating a lower interest rate with the credit card companies on my own and they all told me no way.

So far my credit is no worse than it was before i went into counseling. It is not really better, either but at the rate is was going...

Weigh your options and figure out what is best for you, but FWIW I don't think credit counseling is as bad as it is sometimes made out to be.
posted by ephemerista at 8:04 AM on April 1, 2009

"So far my credit is no worse than it was before i went into counseling."

Not yet, at least - you now or soon will have a debt consolidation black mark on your record - which may be good for you since you shouldn't be borrowing money now.
posted by bensherman at 9:19 AM on April 1, 2009

This will wreck your credit only slightly less than bankruptcy.

This is completely untrue. Go with the recommendation for Consumer Counseling Credit Service. They helped get me on track several years ago and my credit score increased dramatically when I was done.

I think when people talk about the bad associated with credit counseling, they are specifically talking about the outrageous upfront fee services. CCCS has been around for years, is associated with the United Way and offers credit counseling that also includes budgeting help. They negotiated with my credit card companies to stop them from charging me late fees and lower my interest rate. I had a fixed payment that went to CCCS each month. All the bills were paid on time. I now have stellar credit, better budgeting skills and most importantly, peace of mind.
posted by notjustfoxybrown at 12:29 PM on April 1, 2009

Nthing CCCS - got out of about $35k of debt in 3.5 years. They were able to really cut down on the interest rates I was being charged.

This will wreck your credit only slightly less than bankruptcy.

I'm repeating what notjustfoxybrown said, but this (italicized) statement is not true. I am in the mid-high 700s after just one year out of the program. It was definitely noted on my credit reports that I was in consumer credit counseling, but it did not prevent me from getting a mortgage or another car, and decent rates on both.
posted by getawaysticks at 12:40 PM on April 1, 2009

Thanks for all the responses. I am now in touch with a local CCCS office. Thanks!!
posted by All.star at 1:21 PM on April 1, 2009