primitives discuss credit counseling

[franksolich]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=230x4654

Oh my.

ChiciB1  (1000+ posts)        Thu Sep-17-09 04:37 PM
Original message
 
Don't Know If This Is THE Place To Post This, But I Need Some Information...

My husband's ex-wife who I've remained close friends with told me recently that she can't pay her credit card bills. I DIDN'T ask her how much she owed, and she didn't offer. Recently, I took a friend to our hospital so she could have an endoscopy and while I was waiting there was a newsletter there that I started reading.

In the paper I saw an advertisement from a a place called DCSD (Debt Counsel for Seniors & the Disabled) so I told her about it. She called them up and they sent out a packet of papers to sign, a "contract" with them that states she will have to change her bank account, they will provide her a lawyer for $20.00 a month, and she will have to give them all her credit cards! She came over about an hour ago and wanted me to look over the packet, so I did. I DON'T KNOW WHAT TO TELL HER!!

It shows they are listed with bbb.org, but it's seems like basically a bankruptcy contract. And they don't specify how long she will have to pay $20.00 a month, but there is an up front fee of $200.00 for the lawyer to represent her. From what I have gathered, she won't owe anymore money to the companies, but she won't be allowed to have any credit cards either. Which if probably a smart thing. She doesn't have a very good education, and even if I do I'm not sure what this is all about.

Does anyone know ANYTHING about DCSD and what should I say to her. I KNOW she's embarrassed because she hasn't told me the amount and apparently it's gotten to a level where she felt a need to seek my help. This is "touchy" stuff for me because I don't want to be in this driver's seat!

I just gave her $200.00 so she could make it til the end of the month. She didn't ask for it but I did ask her if it would help. Now, I'm not rich but I have saved some money... still I'm not in the business of paying off other people's debt! I have been known to lend money when I shouldn't have and have learned a VERY GOOD LESSON! Not small amounts like $200.00 either!

Anyway, can ANYONE help me with this thing? I don't know what to tell her. I don't think I would sign it myself, but I have options... she doesn't!!!

Also, she doesn't own a home or anything else, just is paying payments on a car! She's on SS and I'm wondering if the credit card companies can take money from her. Hey, my suggestion to her was to tell them to "kiss off" because she said they raised her interest rate to a very high rate! But, I don't know what they do if you just don't pay!!

DesertFlower  (1000+ posts)      Thu Sep-17-09 04:43 PM
Response to Original message
 
1. i have a family member who had $20,000 in credit card debt. she was paying the minimum, but then they raised her interest rates. she could no longer make the payments. with penalties and interest it ballooned to $32,000. she contacted some of these debt consolidation places, but basically you're paying something to them every month too.

to make a long story short, the companies started contacting her to make deals. of course, when they write off 1/2 to 2/3 of the debt you have to pay the whole thing at once. there are no monthly payments. i gave her $7,000 to pay 3 of them. so except for discover who is letting her pay $70 a month, she's out of debt.

snagglepuss (493 posts)      Thu Sep-17-09 04:47 PM
Response to Original message
 
2. I have read about suspicious Credit Counselling Companies so proceed with caution! I don't put to much stock and BBB rating. I think its best check the yellow pages for non-profit credit counselling and then googel, google, google every profit and non pro-profit company you find.

bkkyosemite  (1000+ posts)      Thu Sep-17-09 04:50 PM
Response to Original message
 
3. Tell her to call a bankruptcy lawyer and get advice from them before signing this thing. I wouldn't sign it.

wryter2000   (1000+ posts)        Thu Sep-17-09 05:05 PM
Response to Reply #3
 
8. Good idea!

A consultation wouldn't cost her much. An attorney saw us for free one time. She told us to get the papers for bankruptcy and do it ourself because we didn't need her.

I insisted on paying her, anyway. It cost $75. That was many years ago, though.

The defrocked warped primitive:

Warpy  (1000+ posts)        Thu Sep-17-09 04:51 PM
Response to Original message
 
4. Be very very careful about this

It is a legitimate organization and has an A+ rating from the BBB, but it's only been around since March, 2009.

At their best, they can work with her to get those rates reduced so she can reasonably be expected to pay her debt.

The only way she should turn those cards over to them is in little pieces, though. She needs to verify that they will destroy those cards on the spot, in front of her.

Whether these people are worth the money is anybody's guess. They might be worth it in the long run if they get her interest rate reduced and run interference for her so she doesn't get dunning phone calls every 10 minutes at home and at work. Yes, that's illegal, but the boiler rooms that do it are often offshore.

She will still owe the full amount. She won't be able to get another credit card until her debt is discharged.

If she tries to cadge any more money out of you and you feel willing to lend it, be sure to get it in writing. As it is, I think you can probably kiss that $200 goodbye.

ChiciB1  (1000+ posts)        Thu Sep-17-09 05:37 PM
Response to Reply #4
 
14. Oh, I Know The $200.00 Is Gone... But I'm Glad Someone Else Has Heard Of Them!

They do state that she will NOT get any more calls and if she does, she's supposed to report it to them. There IS a phone number for that! But they are saying she won't have to pay the cards back!

THAT doesn't seem possible to me! Maybe that's where the $20.00 a month comes in... I don't know!

I will check them out online, just was wondering if anyone else knew about them! March of 2009 isn't very long to be in business either!

Warpy  (1000+ posts)        Thu Sep-17-09 06:45 PM
Response to Reply #14
 
17. I looked them up at the BBB

I hadn't heard of that outfit, specifically, but I do know what the best of them can do for people who are in trouble but who don't want to declare bankruptcy.

My advice about the credit cards stands.

ChiciB1  (1000+ posts)        Thu Sep-17-09 08:19 PM
Response to Reply #17
 
19. Thanks Again... But It Looks To Me That What "They" Are Doing With

this program is very, very similar to bankruptcy! I've been reading over it and it makes references to being like one. The specifics sound like what a bankruptcy would be like. I also don't know that much about bankruptcies, but I think this program is ONLY for credit card debt.

That's what I'm getting from my reading! I hate all those inside paragraphs that sort of look like "fine print!" This COULD be just one of those companies that has gotten on the bandwagon for "striking while the iron's hot" since so many people are in trouble! AND the credit card companies are taking FULL advantage of people who can't pay!

I have a LONG story about them too! I had a WaMu card at 6.5% interest, then one day out of the blue they told me they were raising to 10.24%, just like that! While I didn't always pay them off each month, I kept my balance low! Since my interest with WaMu was 6.5% I didn't go with my credit union because their's was 8.5%! I fixed that real quick! My Visa is now through the credit union. I just like to keep one card for things like airline tickets etc. The day I got my new cards... Chase who took over WaMu sent another letter saying they were raising the rate to 17.24%! Thankfully, I didn't owe them anything!

Here's the kicker... I called them sort of outraged and ask why they would do that to a GOOD customer, and they blatantly told me that it was because so many other's don't pay their cards!! I'm sorry, but making it more DIFFICULT for those who have a hard time to pay, and then screwing those who DO pay, seems so very backward to me!

However, I'm NOT excusing my sister-in-law... she made the debt and did so unwisely, had I known sooner it may not have gotten this bad! I suppose eventually I find out the real amount she owes, but as yet I don't know!

Sorry for my tirade... but I have TWO other friends who are in serious trouble too and I'm really frustrated by all this. I'm just glad I worked with companies that loaned money for a while and found out early what "not to do" if possible!

But there are some situations where people are FORCED into debt by lack of health care or other serious sitautions, and they too are getting squeezed! That's heartbreaking and WRONG!!

Warpy  (1000+ posts)        Thu Sep-17-09 09:24 PM
Response to Reply #19
 
21. A rate of 18% on an unsecured consumer debt was about right, historically. It was a high risk loan with little or no collateral to back it up and that justified the interest rate.

A 10.5% rate is still a huge bargain.

The problem with people in trouble is that the rates have been raised to a maximum of 39%, forcing those people into bankruptcy.

That's where these companies come in. They have sufficient clout to get the rates reduced, especially when they have a client with the means and intent to pay the cards off at a more reasonable rate. Since most people in real trouble still qualify for the old bankruptcy statutes, that is a great bargaining point with them.

The good programs are quite strict about what their clients can and can't do, that's true. However, the whole process helps people avoid a bankruptcy followed by 10 years of being unable to qualify for any type of loan or even renting apartments. Successfully completing a repayment program and becoming debt free is not a mark against your credit.

Some people are savvy enough to bargain the credit card rates down on their own and set up a payment program on a closed account themselves, but most people who are in serious trouble are so because they're not that savvy.

juno jones  (1000+ posts)        Thu Sep-17-09 04:53 PM
Response to Original message
 
5. To be honest, she might be better off declaring bankruptcy.

If she has no real assests like you said, chapter 7 isn't too traumatizing. $1200-$1500 and it's all over.

But you have cut the credit cards up yourself and resolve to throw every offer that comes in away.

She should at least shop around. My bankruptcy lawyer gave a free consultation and provided me with lots of information about debt consolodation, credit counseling, etc.

She should not just jump into this.

ChiciB1  (1000+ posts)        Thu Sep-17-09 05:16 PM
Response to Reply #5
 
9. Clarification... It's My Husband's Brother's Ex-Wife... My Husband Doesn't Have

an EX! Don't know WHY I had to add that, but I did! So from what I'm reading this looks almost exactly like bankruptcy, but the initial cost is only $200.00 and THAT $20.00 a month thing, and I don't know how long that will last! Another problem I'm having is that they are requesting a P.O.A (Power of Attorney) and I don't want to be THAT either.

I CAN'T answer some of the questions because I'm Not Her, and THEY won't clarify much for me even though I told them she doesn't understand stuff like this very easily.

Ya know, I think I'm going to advise her to do the bankruptcy thing because she's only digging herself deeper (I think) but I'm not sure! Having known her for so long, I KNOW she didn't even want to tell me about this. How she got herself in this mess I don't know. She lives alone and it's her daughter's house so her mortgage payment can't be over $400.00 a month. It's an old house. Obviously she doesn't want to tell either of her children, and they aren't that young, but they don't have a lot of money either!

She would give me her right arm if I needed it, but all I can do right now is advise her. Besides, my husband WON'T let me give her a lot of money! You know, the brother thing!

I thank you for your input, but this thing looks "hinky" to me! It was advertised as something that would really help, but I'm thinking no.

DesertFlower  (1000+ posts)      Thu Sep-17-09 05:36 PM
Response to Reply #9
 
12. Clarification. my family member is my granddaughter. she wanted to pay me back -- to put something in writing and have it notarized. i told her that i didn't want the money back, but she had to promise that she would never get herself in a mess like that again. she's gonna get the money when we're gone -- so why not help her out now.

ChiciB1  (1000+ posts)        Thu Sep-17-09 05:39 PM
Response to Reply #12
 
15. Yeah, Well My Kids Will Be Getting My Money When I'm Gone... I Haven't

made any provision for an ex-sister-in-law no matter how much I like her!

DesertFlower  (1000+ posts)      Thu Sep-17-09 05:55 PM
Response to Reply #15
 
16. my granddaughter is the only family member we've made provisions for. the bulk of our estate goes to animal charities.

BTW. she's my granddaughter from a son i had from a previous marriage. my husband who i've been married to for 39 years is great. when i asked him about giving her the money he was fully supportive.

ChiciB1  (1000+ posts)        Thu Sep-17-09 07:59 PM
Response to Reply #16
 
18. Well, I Don't Have All That Much... Our Home We Live In, Five Acres Of Land We Bought As

an investment & eventually 1/2 of my mother-in-law's place. Which BTW we are having to pay the bills on right now. She has Alzheimer's and even though my husband retired early and she lived with us for almost 10 years, her illness got so severe she "had" to be put in a Nursing Home! The Social Worker told us that we could no longer care for her because she had deteriorated too much. She's basically "just a body" now.

Her place can't be sold until she passes away (in her will) and then it will be divided between my husband and his brother! THAT'S a long story since he lives in the town where her place is, and we live about 2 hrs. away! We still are tending to all the upkeep there and the security system and utilities have to remain on. Plus the taxes, etc. Oh Boo-Hoo, I'm complaining!

I think it's FANTASTIC that your husband is so very kind for being so agreeable about your granddaughter. My daughter has 2 children from her first marriage, and she married ONE FANTASTIC man who had one daughter from his first! I have NEVER seen a more WONDERFUL father to those 3 kids! My daughter's kids call him "Big Daddy" and he has been AMAZING! Honestly, we are so lucky to have him in our family!

My son just had his first son and he really grew up over-night because they waited 6 years before having any children! Now, they want another one, hopefully a girl! Soooooooooo, fortunately "our" money will be divided up between our two, and then THEY can figure it out from there!

While we have some liquid assists, I would like to wait until the economy rebounds before we sell the 5 acres. In some ways it's good that it's not sold because I would be tempted to work something out with my sister-in-law! I'm not sure THAT would be my smartest move ever!

wryter2000   (1000+ posts)        Thu Sep-17-09 05:01 PM
Response to Original message
 
6. I would tell her "run like hell!"

I hope she hasn't signed anything. There are lots of sharks preying on people like her. Anyone who asked me to sign over my bank account would see nothing more of my but my back.

ChiciB1  (1000+ posts)        Thu Sep-17-09 05:32 PM
Response to Reply #6
 
11. Nothing Signed... I Told He NOT TO! I Wanted To Read The Thing First!

She'll probably take whatever advice I give her. I wish she would let her kids know though!

wryter2000   (1000+ posts)        Thu Sep-17-09 05:03 PM
Response to Original message
 
7. Also, You can tell them to kiss off. She'll end up wrecking her credit, but it's probably a mess, anyway. It's unpleasant, and it feels like hell to be a deadbeat, but sometimes you have no choice.

I think she can get an honest attorney to do a bankruptcy for her for less than $200.

ChiciB1  (1000+ posts)        Thu Sep-17-09 05:30 PM
Response to Reply #7
 
10. Yeah, I Think I Can Google Around... I Always Thought Bankruptcy Lawyers

cost a lot. I don't know how long this has been going on, but I don't think it will matter much if she isn't paying her bills right now. She DID get her car financed through my Credit Union, and I told her to see if she could get a consolidation loan, guess they turned her down.

I guess I'm going have to do some "google searching" or get out those yellow pages!

One funny thing about this though, she WANTS to keep ONE credit card!! I already told her that it would probably not happen. I'm not sure I have ALL the information I need, but I suppose I'll give it my best try!

My husband may not be very happy with me when I tell him, but it IS what IT IS! Oh well, he's not ALL that close to his brother anyway... still blood is blood!

virgogal (1000+ posts)      Thu Sep-17-09 05:37 PM
Response to Original message
 
13. I'd avoid them like the plague. A new business for a recent problem that advertises frequently is not to be trusted.

[Celtic Rose]

I'm amazed at how many of them seem to have first hand experience with being a deadbeat and declaring bankruptcy 

[NHSparky]

How about one that's been around for 30-40 years, primitives?

There is something to be said for negotiating with creditors versus walking away from your bills or just declaring bankruptcy.

If you manage to find a reputable agency, that's good for you.  Yes, they do charge an administrative fee, but usually less than one might expect, and they do all the "heavy lifting".

In case you're not yet aware, I speak from personal experience.  Because of the divorce, I've been saddled with quite a bit of debt in "our" (read: her) names, which I'm now stuck with paying since she can't.  There are basically three options:

Bankruptcy--the worst one, IMHO.  Your credit is screwed and even then you'll still end up paying for years.  

Credit "reduction"--The companies which claim they can "reduce" your debt may in fact be able to have a percentage of that debt written off, but guess what?  That "reduction" comes back to you in the form of a 1099 for that amount; i.e., income!  So you go from owing the banks to owing the government!

Credit consolidation--The company I went through charges about $40/month, but took all my cards (including ones she had) and combined them into one payment which was significantly less than I was paying.  Also, the interest rates were dropped to almost nothing.  So while my utilization is quite high right now, as these cards are paid off, that ratio declines, and by the time they're all paid off, I'll actually have pretty good credit, since the only bill I'll have at that point is my mortgage.

Yes, it pays to look at all options, and read the fine print.  If they are looking for money up front, run, don't walk, to someone else.

[IassaFTots]

How about one that's been around for 30-40 years, primitives?

There is something to be said for negotiating with creditors versus walking away from your bills or just declaring bankruptcy.

If you manage to find a reputable agency, that's good for you.  Yes, they do charge an administrative fee, but usually less than one might expect, and they do all the "heavy lifting".

In case you're not yet aware, I speak from personal experience.  Because of the divorce, I've been saddled with quite a bit of debt in "our" (read: her) names, which I'm now stuck with paying since she can't.  There are basically three options:

Bankruptcy--the worst one, IMHO.  Your credit is screwed and even then you'll still end up paying for years.  

Credit "reduction"--The companies which claim they can "reduce" your debt may in fact be able to have a percentage of that debt written off, but guess what?  That "reduction" comes back to you in the form of a 1099 for that amount; i.e., income!  So you go from owing the banks to owing the government!

Credit consolidation--The company I went through charges about $40/month, but took all my cards (including ones she had) and combined them into one payment which was significantly less than I was paying.  Also, the interest rates were dropped to almost nothing.  So while my utilization is quite high right now, as these cards are paid off, that ratio declines, and by the time they're all paid off, I'll actually have pretty good credit, since the only bill I'll have at that point is my mortgage.

Yes, it pays to look at all options, and read the fine print.  If they are looking for money up front, run, don't walk, to someone else.

Been there done that.  My ex filed bankruptcy and I live in a community property state.  I was encouraged to file as well, but I didn't.  It didn't seem right, I mean, I signed on the stuff, right?  So, MANY years later I am finally in a spot to move ahead.  That Credit Reduction is Scary for sure.  I have a buddy who is a bankruptcy paralegal, and he told me he sees more people coming in to file BR after doing the reduction, because they didn't grasp that 1099 concept.

[NHSparky]

Been there done that.  My ex filed bankruptcy and I live in a community property state.  I was encouraged to file as well, but I didn't.  It didn't seem right, I mean, I signed on the stuff, right?  So, MANY years later I am finally in a spot to move ahead.  That Credit Reduction is Scary for sure.  I have a buddy who is a bankruptcy paralegal, and he told me he sees more people coming in to file BR after doing the reduction, because they didn't grasp that 1099 concept.

And a side benefit to what I'm doing--I have NO credit cards now.  The ones being consolidated are closed and if I open new ones the banks go back to the old terms.  I live on what I have coming in, rather than running up debt.  If I can't pay for it with cash, I don't buy it.  When I'm out of debt in a couple of years, it's going to be sick the amount of savings and disposable income I have compared to what I have now.

[IassaFTots]

It sure will!  It is tough, I agree, and there were times when I would get so dang ticked off, but once you are on the other side, it is worth it indeed.   

[GOBUCKS]

Giving a DUmmy credit counseling is like teaching a snake not to bite.

The one who needs the counseling is anyone who extends credit to a DUmmy.

[NHSparky]

Giving a DUmmy credit counseling is like teaching a snake not to bite.

The one who needs the counseling is anyone who extends credit to a DUmmy.

Unfortunately, it's illegal to deny credit based on stupidity.  Then again, if I ran a bank and someone asked me for a CC, my first question would be, "Are you going to use this to buy anything advertised in a television infomercial?"  If the answer is yes, automatic denial of credit.

[Karin]

That ChiciB1 is exhausting.  Everything is a long involved story told in a flaky style and includes several million exclamation points.  I am so glad I'm not saddled with a friend or relative like that. 

Just keep looking ahead to a couple years, sparky.  You're going to be sitting so pretty.