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I Went with Debt Care USA but Bank of America is After Me. – James

“Dear Steve,

Pretty simple,credit score goes up, credit cards come in. You rationalize them & accept. Then you get laid off, but the cards keep coming. More rationalizing, more acceptance, now we have 4 cards & unemployment. More cards, now you have a means of paying off the other cards. Soon your payments are too much to manage. Then when everything is spinning out of control, bingo, out of the blue someone is concerned. Honey, I just got a call from some co. that wants to help us resolve our debt situation. And just like that someone else wants to take advantage of your ignorance.

This was 09/22/08. 9 cards, $23,000.00 dept. Not counting 2 car payments,ins.,rent,living(food,etc.).Ok debt management can help they say. So I get some papers to sign, but before I do, like magic, someone else wants to help, that should have been a sign, but I was desperate & after all these people really cared about my situation. I mean thats what they said. Now, this other c o.,they could go almost a $100.00 less than the other co. a month($352.74). Wow, I’m getting a deal.

So I signed with Debt Care U.S.A., Wow, they even have a cool name,cause afterall, thats where we live. Their on my side. Now, mind you, this was approximately, (one of their fave words), a 40 week program where my max. settlement would be $9102.22, I would pay them 15% of total dept($3413.33) & save a whopping $8646.00. Thus paying only 40% to creditors.

First payment was 10/08/08, oh, that was after the one time only, infamous consultation fee of $399.00(don’t you just love those 99′s). OK, not too bad, I mean those other guys wanted over $400.00, these people less than $400.00 Ka-ching, another deal.

Well, now its 1/14/11, I’m worried. So I was looking for Debtcare testimonials & I came to your site. Right off the bat I’m seeing, “BIG PROBLEMS WITH G.C.S.LLC” & R.M.Bank & Trust. Great, thats me. And then I read, don’t sign with any settlement companies until after 10/10. My next words i cannot print.

As of 01/11 I’ve paid$9,531.00 to debt care. admin. fees: oh yeah,(APPROX.)$3,413.38, Maint. fee:$1,050.00(approx.), 2 cards taken care of: totaling $1,125.00, then in dec.(approx.)2009 I get a call (frantic, out of breath), you have to put more money into your account, they proceed to tell me that B. of A. wants to sue, the next payment has to be $467.74, I ask when the admin. fees will be paid off. They said soon & then agreed that the extra money, after the fees were paid off, could go towards the B.ofA. payment.

So,after 2 more months of paying$476.74, wait I’m getting ahead of myself. Ok, dec. 09 call,normal debit($352.74),acc. maint.$9.85,maint. fee$30.00, (oh, for first 3 months it was 9.85bank maint. fee & 39.85maint. fee, & a one time $9.00 setup fee.) & $162.55 admin. fee. (Oh, first 4 months it was admin. fee $284.42). Then starting 01/05/10 payment $500.00 to Joe Pezzuto LLC. Leaving my account at $12.59 & the first of 3 debits of $476.74. 02/01/10 Joe P. $264.50. Then in 03/02/10 payment to B. of A.. This is still going, at the time of the payment to the collection co.:$5,218.31 owed, interest: $1,759.58, current balance:$6,977.89.

That was sent to me 01/20/10 & now 11/19/10:owed $2,837.81, interest:$2,698.94, current bal.:$5,536.75. At one time I was sent a settlement statement from B. of A. for (approx. $2,000.00). I thought I faxed it to them, they, of course said they never received it. So I faxed it to them again some months after the fact, still haven’t heard from them. I have never received a thing in writing on this card or the other 2 cards. Nor was I asked if I went along with their decisions.

Then I get a notice of intent to withdraw from a collection agency, i’m thinking, what now, it’s for $58.00. I phone the # (Affiliated Credit Services) & their client is (this is too much) non other than Debtcare U.S.A.. I’ve received 3 so far. I changed my phone # recently & haven’t told them, h oping they would mail me something I could use against them. NOTHING.

I’m now paying on the 3rd card. I’ve paid $2,409.50 to B. of A. which when subtracted from owed + interest=$4,568.39, their calculations=$5,536.75. This is crazy. when I started with Debtcare I owed B.ofA. $5,194.58. I still have credit cards equaling $13,516.67 & that was 2008. Then when you add up all I’ve paid & where it went, that leaves $1,418.00 (Approx.). where did that go? What do you suggest?

James”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear James,

Well the underlying problem is that when you go with the debt settlement program it does not stop the interest and penalties so the balance will increase until it is either paid off in full, settled or discharged in bankruptcy.

Granted, you are in a tough place. You have paid so much so far in fees and not out of debt. Ultimately the decision is going to come down to if you want to continue down this path or a better solution should be pursued.

I would suggest you talk to a local bankruptcy attorney and read this, The Honest and Unvarnished Truth About How to Get Out of Debt.

You can click here to find a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

I Went with Debt Care USA but Bank of America is After Me.   James
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If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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