Ameridebt etc..

[Lathum]

I have a friend who was thinking about contacting one of these debt consolidation services. He has some student loans, car payments, and a couple of personal loans. He just had a kid so things got really tight on him and now he is struggling. Has anyone ever used a service like this or known anyone who has? Any feedback would be appreciated.

( BTW, I'm researching it for him because he shut his internet service off)

[bosshogg23]

I have never used a consolidation service. However I just refinanced my house and my contact at the mortgage company said Ameridebt in paticular is a very unpopular company and has alot of complaints. He mentioned that the Better Business Bureau had a extensive log of their problems.

I never looked into it as I wasnt interested in them so I dont know how accurate his information is.

[MikeVick7]

I have used one in the past...it was a non-profit agency located in Minnesota where I used to live. They're definitely legit and their customer service was great. They're called Minnesota Credit Association. I could be wrong but I really don't think you have to be located in MN to use them.

http://www.mncredit.com/

[judicial clerk]

Many of these creditconsolidation services are non-profit organizations. Do not let that fool you into think they are a charity. They are mAking money off of the service they provide to you. That is not to say that they are a rip off or anything. Your friend needs to do a lot of research. I believe that in some state, these debt-consolidation agencies must be registered or licensed with the state. The state govt may be able to provide you with more info.

a copuple of example agencies to contact would be

http://dfcs.oregon.gov/dca.htm

www.irs.gov/pub/irs-tege/eotopica04.pdf

[Swaggs]

In some cases, it can be smarter to file for bankruptcy than to consolidate. He should do a whole lot of research before doing either.

[Flasch186]

and get some advice:

FARRAH!!!!????

[JonInMiddleGA]

I think there should be some info of some use at www.clarkhoward.com
(credit counseling, etc. is something he really pushes, so I can't imagine there isn't something useful on his site).

[Buzzbee]

I think there should be some info of some use at www.clarkhoward.com (http://www.clarkhoward.com/)
(credit counseling, etc. is something he really pushes, so I can't imagine there isn't something useful on his site).
He has links to consumer credit counseling service, but they are based in GA, FL, TN, and MS. He also links to the National credit couseling service. If you go to Clark's Library>Clark's Rolodex and then click "web sites" it links to numerous useful websites, including the ones mentioned above.

[Draft Dodger]

I went through Consumer Credit Counseling Service (CCCS) a few years ago, and my mother also used them a little more recently. Basically, the two things they can be good for is 1) keeping the phone calls off your back and 2) possibly getting a better interest rate on some stuff. in my case, I didn't really care about #1 and I didn't get any benefits on interest rates. in my mom's case, she definitely got a better rate on these 2 cards she was trying to pay off...in her case it worked out pretty well for her. In my case, it worked out much better for me to just go it alone according to my own gameplan.

[Arles]

I have heard that the way the debt gets structured on your credit report can be sometimes classified as a "default". So, in many cases, your credit will take a big hit. As many have said here, I would really look at other options (home equity loans, 2nd mortgage) and make sure you understand the long term impact in using one before taking the plunge on one of these services.

[Flasch186]

your credit score is more important than whatever is in your wallet right now. Protect it at all costs, so if the people "sell" you on it not being a big deal, credit scores that is, run....run away. You need to minimize the hit on your credit.

[Radii]

I can quote the advice given on the fool.com's credit card debt board every time this comes up, which is very very often.


1) There is little these services do that you cannot do yourself(ie. call each of your creditors individually and explain your situation, and explain that you'd like a payment plan at the best possible rate. Don't miss any more payments, ever, and every few months call again to see if you can get a still better rate based on your sincere desire to pay off your creditors and your improving history).

2) In most cases using a service like this will show up in some way on your credti report and will make it harder to finance a home/car/any new major purchases

3) despite the two things above, for some this is a good last resort and the hand holding from the service is helpful even though there are some negative after effects. I usually see CCCS recommended but would not attempt to speak for any individual company, but I'd say research this very seriously, contact the better business bureau and make sure you can trust whatever company you do go with.



This advice usually comes from all kinds of people, but often CPAs and Mortgage brokers who do frequent these boards.

I would highly recommend them, fool.com, they have a free month trial for the message boards, find the Credit Card debt board and read about other people's problems, there are many, many common themes.