Current Events > Anyone familiar with debt consolidation?

(+) Yeah! (+)

My wife and I have received many debt consolidation offers, and recently an individual from Better Path finances stopped by my house offering a seemingly too good to be true consolidation program.

So from my understanding, these programs basically payoff all unsecured accounts like credit cards, and turn them into one payment. Usually with a lower overall interest rate.

I've looked a pros and cons online but I got the impression it was more behavioral advice, but personally I just want to save some money on interest and pay lines off sooner.

Edit: currently we are doing a debt snowball plan ourselves, which is working, just slowly.

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I would be leary of those. idk specifically what/how they do it, but if you can get 0% apr on balance transfer credit cards; you could easily do it yourself.

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BuckVanHammer posted...

I would be leary of those. idk specifically what/how they do it, but if you can get 0% apr on balance transfer credit cards; you could easily do it yourself.

Yeah I saw online that balance transfer cards are better, and I should have the credit to swing it. But if I can't pay off the entire balance before the promotion period is over does it help at all after that?

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orangefire25 posted...

Yeah I saw online that balance transfer cards are better, and I should have the credit to swing it. But if I can't pay off the entire balance before the promotion period is over does it help at all after that?

ya roll over to a new one, keep that shit rolling.

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Those programs are a ripoff, I worked for one of those companies, all they do is contact your creditors and negotiate deals you could get yourself (usually the contract will say if they can settle for 70%, you have to accept it). You're on a 5-10 year plan where you pay the consolidation company every month. They get all their fees in the first couple of years, and it's only in the second half of the program that your money starts to go into a fund to pay settlements. By that time, they haven't paid your creditors anything for a couple of years, which means the debt is larger with interest, and sometimes the creditors sue you. At that point, a lot of people cancel the program because they've been paying for a while and have nothing to show for it. And the program doesn't care if you cancel, because they've already gotten all their fees.

Also the fact they came to your house suggests aggressive sales tactics.

DowntownMrSmith posted...

Those programs are a ripoff, I worked for one of those companies, all they do is contact your creditors and negotiate deals you could get yourself (usually the contract will say if they can settle for 70%, you have to accept it). You're on a 5-10 year plan where you pay the consolidation company every month. They get all their fees in the first couple of years, and it's only in the second half of the program that your money starts to go into a fund to pay settlements. By that time, they haven't paid your creditors anything for a couple of years, which means the debt is larger with interest, and sometimes the creditors sue you. At that point, a lot of people cancel the program because they've been paying for a while and have nothing to show for it. And the program doesn't care if you cancel, because they've already gotten all their fees.

Also the fact they came to your house suggests aggressive sales tactics.

Yeah he was asking for me to put in my dob and social on an iPad I was like, nah

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But jfc wow

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I did one once and I used my bank. A low fixed interest rate.

You want to borrow $5 and pay back $6...or $7 The loan then splits that up into payments and you know what the actual debt is for its entire life.

Mine was $10k and I paid back $12.25k over 2 years. Something like that.

The deal was I closed my CC accounts that this loan was paying off, which the CC companies don't have to honor, and the bank was the one to contact them to close. That was what I did...too many minimums. All I had to do was go into the bank, negotiate the deal, then wait to see if any kept open accounts. Cut up the ones confirmed closed.

6-7 accounts closed, 1 stayed open. Debt paid off. A year after paying it off, the bank issued me a new card through them again with it's low rate honored.

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NecroFoul99 posted...

I did one once and I used my bank. A low fixed interest rate.

You want to borrow $5 and pay back $6...or $7 The loan then splits that up into payments and you know what the actual debt is for its entire life.

Mine was $10k and I paid back $12.25k over 2 years. Something like that.

The deal was I closed my CC accounts that this loan was paying off, which the CC companies don't have to honor, and the bank was the one to contact them to close. That was what I did...too many minimums. All I had to do was go into the bank, negotiate the deal, then wait to see if any kept open accounts. Cut up the ones confirmed closed.

6-7 accounts closed, 1 stayed open. Debt paid off. A year after paying it off, the bank issued me a new card through them again with it's low rate honored.

In my case I only have four total credit cards, two of which are through my bank, one best buy, one home depot. Thanks for the feedback, that seems like a decent route.

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orangefire25 posted...

In my case I only have four total credit cards, two of which are through my bank, one best buy, one home depot. Thanks for the feedback, that seems like a decent route.

My highest balance offender was my own banks card. They just closed it there at the desk. That option was over, through them, until I paid off my consolidation debt.

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Got it.

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