Credit Counseling/Debt Settlement or stick it out?

[dede_mcm]

Should we go credit counseling, debt settlement or just stick it out? We have a lot of personal debt brought on by poor choices and a little hard luck over the past several years. We are all employed (me, hubby and 20-something son) finally and making enough to pay the bills and eat, etc but the "damage" is already done on the credit report - going from approximately 780 to 511.

I will not go the bankruptcy route as I do not see that as a viable option for me, however, my question is, since the FICO score has fallen so low now, should I just go ahead and go w/ debt settlement company to help me get these bills paid off or continue with the "snowball repayment" plan I worked out for us.

In the past 5-6 months, I have already paid down $6000 in debt using the snowball but I did see an $11 K charge-off by a creditor appear on my credit report this month so, that pretty much sinks the ship so to speak.

[sljmft]

I personally wouldn't go the credit counseling/debt settlement route. You are basically paying someone else to do what you already can do for yourself. I went through the same thing (finishing up the last of the recovery) I droped from 710 down to 465. I am back at a 630. I saved money, and called each individual collector and settled on the account with them. If you cal the collectors they would rather settle than see nothing at all. Once they appear on your report, they know the damage is done, it's easy enough never to pay them. My advice, save and settle. Most collectors will usually settle the debts for half the amount provided you pay the day you call. This would allow you to pay them off for less of a cost to you and help clear up your credit bureau. Hope that helps.ps. when you settle have the collector send you an email with the agreed upon terms before you give them any information on electronic payment. This covers your backside from them trying to cash more than what was agreed.

[redhedgurl5]

ahhh. went thru this with the ex hubby. pro's of credit counseling- they negotiate and distribute payment. they can often get interest down. but not always. con's of cc- they charge a fee, it locks your credit cards down, shows on report, kills your ability to acquire new credit for emergencies. i would suggest a good hard effort to work with creditors directly first. and don't take no for an answer the first time. write to the top level. really give effort to getting them to work with you. esp. since you've made progress. going the settlement company can work, but be veeery careful who you go with. there are a lot of misrepresentations out there and you can get seriously ripped off. you have to monitor them constantly to make sure they actually send the payments! long story short, try to do it yourself if you can.

[denti b]

There are many free consumer credit counseling services that might fit your situations better. Interest rates on financed loans and credit card debt are very high and when you consider the penalties and late fees, many people get caught in the debt trap. They drag themselves deeper into the debt by paying only the minimum amount. It is only then that they realize the need for getting assistance from a reputed consumer credit counselor. This situation arises because they do not completely understand the working of the system. When using the services of an experienced consumer credit adviser, you not only save money but also lower your debt.