Should I use a Debt Consolidation program?

Submitted by marybeth_sherman on Fri, 10/09/2009 - 19:30

Should I go through a company like American Consumer Credit Counseling to fix my credit, or am I better off doing a self-administered repayment plan? I have 10 accounts in collections, 4 of which are marked as charge offs. One of these I paid recently not knowing about the pay for delete agreement, is there any way to get that off my credit now, or am I stuck with it there? Is a good way to start just to write debt validations to all creditors? All of this debt is from 2005, so it is all pretty old.

I think both the optiosn are ok. In the first option some one else will work for you, but in the second option you need to really disciplined and make necessry work

But to startr, I think it is a good idea to send them letter asking for validation of these collection items

Sat, 10/10/2009 - 03:36 Permalink

Hi marybeth_sherman,

First of all you need to check whether or not your debts have passed the Statute of Limitations. The SOL is stipulated time period for different types of debt accounts within which a creditor or CA can take a legal action against the debtor. If your debts have passed the SOL, then you need not pay them. If you had told us about the state you live in, I could have given you the SOL for that respective state.

If your debts are not past the SOL, then you can start sending debt validation letters to the agencies. As soon as your debt gets validated send pay for delete letters to them stating the amount you can pay and requesting them to remove the negative item from your list. The one you have already paid cannot be removed from your listing. Like any other negative item, it will also remain in your credit report for 7 years.

If you think that you will be able to manage this alone, then you can start doing it. Otherwise enroll yourself for a debt consolidation program, which will help to reduce your monthly payments and waive off any extra/late payments. However, before enrolling into debt consolidation program, you have to undergo debt counseling, where the counselor will evaluate your financial situation and decide your monthly payments. Moreover, the consultant will negotiate with the companies on your behalf. For doing all these, the debt relief company will charge a fee from you.

Sat, 10/10/2009 - 06:18 Permalink


You nailed it to the point

Really detailed and informative

Sat, 10/10/2009 - 17:27 Permalink

...and (just to add to JUSTIN's post) you may go MORE into debt, depending on the 'plan'+ a fee, by the Debt Consolidation Co. If you do go into a plan like this, it does 'reflect' on your credit, that you are participating with a Debt Con Co. However...of course, you need to do what 'works for you' and decide what will benefit for you.

Sun, 10/11/2009 - 12:17 Permalink