PDA

View Full Version : what are the pros & cons of consumer credit counceling debt management programs



wsm9808
12-16-2007, 01:37 PM
About 1 1/2 years ago I expanded my business and bought several new machines and opened a second location with a partner in the new location. Long story short, the partner stole me blind and left me holding 50,000.00 in debt before I got him booted. The debt is on my lines of credit and a couple of credit cards. They all had well below 10% intrest rates at the time I used them. Then because of my new "debt ratio" the fahkers shot all my rates up in the 18% range. I can still make the payments, but why waste all that money.
I have been fighting with the creditors and they will not budge on the rates even though I have a 30 year perfect payment history and a mid 700 credit score. Then, last week one of them put me on hold and the next thing I knew they had transfered me to a credit counseling company. I was insulted and pissed at first, but as we talked I found out they could lump all those accounts together, close them, and get me a 6% rate on the whole amount.
Anyone have any experiance with Novadebt? It is a non profit organization and they claim going through them will have no negative impact on my credit rating.
And, why will the credt cards accept closing my accounts and dropping my intrest to 6% through the Nova program but will not give me back my 8 or 9% rates on my own like I had before? They are losing money and a top shelf customer this way.

War Canoe
12-16-2007, 01:42 PM
Credit counseling is considered by MANY lenders as a bankruptcy....I have been in lending 25 years...I would be VERY careful what you do. Ask your bank how they would look at the Consumer Credit Counseling.

scooooter7
12-16-2007, 02:10 PM
Novadebt is NOT Consumer Credit Counseling. I repeat, NOT the same.
Think about it. Counseling. What does that mean? It isn't fixing your debt. Counseling is a way of teaching you how to eliminate your debt and helping you figure out a budget to do so. They will call your lenders and help you if the lenders are willing to help. You pay them a monthly payment with a surcharge fee and they pay your lenders through some type of repayment plan, if they are willing to accept this. Usually bank cards and loans are unwilling to go along.
I don't know about Novadebt. It sounds very suspicious to me. You said it too.
"And, why will the credt cards accept closing my accounts and dropping my intrest to 6% through the Nova program but will not give me back my 8 or 9% rates on my own like I had before? They are losing money and a top shelf customer this way."
I suggest you be very careful and look for alternate means to fix this.
Consumer Credit Counseling is a non profit organization that helps hundreds of people in financial trouble. Again, Novadebt is not the same!

YeLLowBoaT
12-16-2007, 02:14 PM
Talk to the credit card companys... they have been known to play with intrest rates. Its just a phone call.

mark49
12-16-2007, 03:10 PM
File a BK, my bookeeper did a few years back and started getting credit cards offers fulfilled in less then two years...

wsm9808
12-16-2007, 03:13 PM
Credit counseling is considered by MANY lenders as a bankruptcy....I have been in lending 25 years...I would be VERY careful what you do. Ask your bank how they would look at the Consumer Credit Counseling.
I am trying to be careful, that is why I'm asking for help on here. Friday I called a long time friend who ownes a morgage company to see how it would look on a credit report. But she is out of town untill tuesday. But I'm in no rush so I will wait and talk to her too.
Thank you for your reply, every bit helps.

wsm9808
12-16-2007, 03:25 PM
Novadebt is NOT Consumer Credit Counseling. I repeat, NOT the same.
Think about it. Counseling. What does that mean? It isn't fixing your debt. Counseling is a way of teaching you how to eliminate your debt and helping you figure out a budget to do so. They will call your lenders and help you if the lenders are willing to help. You pay them a monthly payment with a surcharge fee and they pay your lenders through some type of repayment plan, if they are willing to accept this. Usually bank cards and loans are unwilling to go along.
I don't know about Novadebt. It sounds very suspicious to me. You said it too.
"And, why will the credt cards accept closing my accounts and dropping my intrest to 6% through the Nova program but will not give me back my 8 or 9% rates on my own like I had before? They are losing money and a top shelf customer this way."
I suggest you be very careful and look for alternate means to fix this.
Consumer Credit Counseling is a non profit organization that helps hundreds of people in financial trouble. Again, Novadebt is not the same!
I agree with everything youve said. That is why I'm trying to find out more about it.
But what gives it some credability in my mind is that Chase bank refered me to them and they even have an 800 number through Chase to Nova. When I try to talk to Chase about my rates they just transfer over to Nova.
Here is Novas web site link http://www.novadebt.org/
Anyone have any expereince with them (NOVA)?
Thanks for the help
Scott

wsm9808
12-16-2007, 03:43 PM
Talk to the credit card companys... they have been known to play with intrest rates. Its just a phone call.
OMG, I have been relentless with trying to get the companys to work with me. You cant believe some of the stupid things they will tell you. Bank of America is the worst. What a bunch of a$$es. They pissed me off so bad. I was paying in to them over 500.00 a month in intrest alone and never missed a payment. I never even had an account with BOA, they bought my old bank and raised me from 6.99 to 18.4 and when I tryed to talk to them they bumped me to 19.4. I sold one of my boats and a couple of project cars just to get completely free from those pigs.
I noticed on Cspan december 4th that they were hearing testemony on this very subject. But I dont think it would be a very good plan to wait for the government to do anything about it. Also, just last week I got my part of a class action suite against a major ceditor that had been screwing us on illegal rate fixing.

Mandelon
12-16-2007, 04:09 PM
Can you borrow from somewhere else at at lower rate, like a consolidation deal? Pay them all off and then pay on just one loan at a lower rate?

YeLLowBoaT
12-16-2007, 04:27 PM
OMG, I have been relentless with trying to get the companys to work with me. You cant believe some of the stupid things they will tell you. Bank of America is the worst. What a bunch of a$$es. They pissed me off so bad. I was paying in to them over 500.00 a month in intrest alone and never missed a payment. I never even had an account with BOA, they bought my old bank and raised me from 6.99 to 18.4 and when I tryed to talk to them they bumped me to 19.4. I sold one of my boats and a couple of project cars just to get completely free from those pigs.
I noticed on Cspan december 4th that they were hearing testemony on this very subject. But I dont think it would be a very good plan to wait for the government to do anything about it. Also, just last week I got my part of a class action suite against a major ceditor that had been screwing us on illegal rate fixing.
see you tell them, you ethier lower the rate or your going to file BK and they won't get a dime...it works.

redneckcharlie
12-16-2007, 05:17 PM
see you tell them, you ethier lower the rate or your going to file BK and they won't get a dime...it works.
That tactic doesn't work. It is extremely difficult for anybody to file bankruptcy anymore. The laws have been changed and tightened up the filings. The days of walking in to an attorneys office and filing bk are gone for the most part. ;)

YeLLowBoaT
12-16-2007, 05:30 PM
That tactic doesn't work. It is extremely difficult for anybody to file bankruptcy anymore. The laws have been changed and tightened up the filings. The days of walking in to an attorneys office and filing bk are gone for the most part. ;)
worked for me this year... long story short had a prob with a escrow company and had to put 40k on my card for building materails.( mill work) sure as hell it went from 7 % to 19( was not over the limit) Told them I was going into chapter elven if they did not put it back to the intrest rate it was before.( chapter 11 gives you rights to renegotiate payment plans.) got the old "no prob, we will take care of that right now" Paid it off the fallowing month, closed the account.

scooooter7
12-16-2007, 05:30 PM
http://www.cccsstx.org/wiki/CCC/HomePage
I found this site doing a Google search. You might look into it. Novadebt could be linked to Chase, since you said they directed you there.
Like I said earlier, Bank Cards are not very forgiving when trying to work out a debt repayment plan. The threat of filing BK (if possible) might twist their arm a little, but I doubt it.
The best use for credit cards are for being a "dead beat" consumer and paying them off monthly. Otherwise they have you by the gonads.

totenhosen
12-16-2007, 05:41 PM
Do not use any sort of credit counseling services. It is almost as abs as having a BK on your credit report.
I have a feeling the reason why they are not negoitiating with you at this time is that you are not behind on the payments. Once you get into the 60-9 days past due than they do so. Than again your credit will be in the crapper. If you do settle with them make sure you get everything in writing from them before you send them any money. Also insists that they clear your payment history and just report it as settled.

Infomaniac
12-16-2007, 09:10 PM
Credit counseling services slow pay everything for you.
It does ruin your credit but you pay for everything you owe. They negotiate with the credit card companies. Freeze the account and no interest accrues.
If you are in over your head and cant make all of your payments now it will help.

C-2
12-16-2007, 10:03 PM
I’m sure there are tons of credit card companies willing to carry your balances for 10% or less. In fact the number of credit card companies is staggering, there’s a lot more players out there than the big guys you are dealing with.
If your score is mid 700’s – then you can pretty much qualify for anything. For example, Pentagon Federal Credit Union is offering 5% balance transfers for the life of the balance transferred (until it’s paid off). With a good credit score, you might easily get $15K.
Research message boards on websites like myfico.com and consumers.creditnet.com. Find out who has the best deals, and who to avoid (for example, Citi doesn’t have the bullshit universal default). It takes time to do the research, but you will learn the best way to keep your score up, and how to slice up your debt.
And remember – a bad customer to a credit card company is somebody who pays in full every month. A great customer to them is somebody carrying a large monthly balance at 18-23%.
Stay away from the threats of BK – as redneck pointed out – the laws have changed and no matter what chapter a person files, creditors almost always get 100% payback – so it makes little difference to them if you file.

catman-do
12-17-2007, 07:31 AM
Like said before, CCC is looked at by many lenders as the same as BK, I would first try to transfer over the debt to lower interest loans. Maybe through a credit union, you can get a private loan. If you cant then you probably DO have the justification for BK in the court systems eyes, due to your partner bailing on you. The credit company isnt in the business of selling out used equipment, they are in the business of money, and they know that. Its the job of the finance company to see just how much money they can make from you. Once they are justifiably called out on it, they might be willing to bargain.

Rvr Swpr
12-17-2007, 07:50 AM
Can you borrow from somewhere else at at lower rate, like a consolidation deal? Pay them all off and then pay on just one loan at a lower rate?
This is the solution to your problem.

SB
12-17-2007, 12:08 PM
I used to refer to people to Consumer Credit Counseling, then I found out they were trying to make a profit on the deal. No more.:mad:
Please spend half an hour talking with a bankruptcy attorney to find out what your rights are. You have several options which were covered above.:)
Lenders are very hard pressed right now, but you have income you should be able to figure something out.