How to Get Out of Debt With the Get Out of Debt Guy » consumer credit counseling service

A New Way Out of Debt

Amanda Miller — Wed, 19 Jan 2011 14:20:10 +0000

A New Way out of Debt

In a growing number of cities, businessmen are getting together to offer a helping hand to those in financial hot water.

Condensed from Empire: Murray Teigh Bloom

In the fall of 1960 the world seemed about to collapse around Billy and Marilyn Simmons of Phoenix, Ariz., and their two children. Hounded by bill collectors from 25 different creditors, 38-year-old Billy was dreading the moment when he would be fired from his job as a salesman. One of his creditors had served a wage attachment on Billy’s $365 monthly salary, and his boss didn’t like wage attachments. Marilyn was still recovering from accident injuries and spent most of the day not answering the door or the phone.

At home each night Billy and Marilyn resumed their long, bitter argument as to whose fault their $2261 of indebtedness really was. When they tired of this they talked about going to voluntary bankruptcy, as 140,000 other American families do each year. They had tried valiantly to get their creditors to wait for money, but had been dismally unsuccessful. They had considered going to a commercial debt adjuster, but they found that it would cost them several hundred dollars and that it might get them further into debt.

“Neither of us said it, but both of us were thinking of the three D’s: debts, disagreements and divorce,” the Simmonses recalled recently. “Debt had toppled over a lot of other families and unless we found a way out….”

Then one day a creditor suggested a way– The Family Debt Counselors of Phoenix, a nonprofit community organization designed to help debt-entangled families. The Simmonses made an appointment with one of the many volunteer counselors who give several hours a month to FDC– most are credit experts or managers of small-loan companies. He explained the basic conditions each family must agree to before their case is accepted:

You are the only ones who can get yourselves out of debt. We can help lay out a plan for you, but you must pay your own way. It will not be quick or easy. Getting out of debt means a long, hard grind.

You must be willing to make some changes. It may even be necessary to accept a new viewpoint on what is “convenient” or “nice to have” and what is a real necessity.

You must keep your word with us. While we can usually get the cooperation of creditors toward reducing monthly payments, they all want assurance that an agreed-to plan will be carried out.

The Simmonses quickly okayed these terms, then asked, “What’s the catch? How much is this going to cost us?” After they had listed all their debts and monthly expenses, the FDC counselor told them that there would be an initial $5 charge to cover the expense of distributing to each creditor a schedule of their obligations, income and expenses, plus a $2 a month thereafter to pay for postage, and the checks and reports to their creditors. He explained that the low price of the FDC plan was made possible through the financial support (some $26,000 a year) of small-loan companies, banks, unions, and credit extenders such as department stores and doctors.

The experienced FDC counselor worked out a tight budget for the Simmonses. At first, they were allowed only $12.50 a week for groceries and all incidentals.

“When you’re forced to weigh every item,” Marilyn Simmons told me, “you suddenly discover you can do without a lot. I found that I was spending $88 a year on my Friday nights with the bowling league. So I quit, and right there we had an extra $1.70 a week. I learned a hundred new ways to cook hamburger and macaroni and cheese. We cut out movies completely and used the public library a lot.”

The Simmonses soon noticed that collector harassment stopped almost magically when creditors learned the family was working with the FDC. As the tension eased, they found peace returning to their home. “I realized that much of our money trouble had been my fault because I was too easygoing about buying things we didn’t need,” Marilyn admitted.

Every Friday when Billy Simmons got his paycheck, he would go to the FDC office and, as part of a self-teaching program, make out checks and envelopes to each of his creditors. When Marilyn was able to go back to work– as a lab technician making $91 a week– The Simmonses began to save money regularly, in addition to paying off their debt at an accelerated rate.

“We became bargain-conscious about everything,” they told me. “When a freezer-food-plan salesman came around, we flatly turned down his $800 deal. In the old days we would have been pushovers. Instead, we looked around and found that an acquaintance who handles property damaged in transit could get us a 20-cubic-foot freezer for $50 because it had been badly scratched in the freight-car. When we needed a new couch, we shunned installment stores. Someone we knew was moving, and we were able to get a perfectly good used couch for $25.”

By the end of 1963 the SImmonses had fully cleared up all their debts and were saving $20 a week. “Even better,” Marilyn told me, “we’re living on Billy’s salary alone, so that if I get sick or something happens to my job we’ll still be able to get along.”

Since the Family Debt Counselors was started in 1958, it has helped nearly 1000 Phoenix families to extricate themselves from debt entanglement. Richard K. Steinman, a founder and director, believes the organization has saved possibly 500 of these families from bankruptcy. In addition, in the past three years FDC has distributed $1,643,000 of clients’ money to their creditors. Normally, most of this money would have gone down the bankruptcy drain.

It was Steinman, who heads a local chain of small-loan companies, with other members of a committee from the Arizona Consumer Loan and Finance Association (which put up $500) who started FDC. At first, they encountered considerable resistance. “Everyone agreed we had a serious problem with our rising personal bankruptcy figures,” Steinman says, “but few could agree on a solution and even fewer were willing to pay for it.” However, they won the support of the Legal Aid Society, the Family Service Association (a social-welfare group), banks, and the AFL-CIO Central Labor Council, which contributed $1500, and FDC was launched.

“At first I thought we should have a free service,” Steinman says, “but people experienced in social-service work urged that we charge a small fee. By doing so, they pointed out, we would enable people to retain their self-respect.”

“There’s a tremendous need for this agency,” says Bernard Wielewinski, executive director of the Phoenix Family Service. “In fact, any good-sized American city needs an FDC. We know that emotional reasons often drive a family into great debt. A family agency like ours can help solve the emotional problems, but the debt itself can be resolved only by an intelligent, community-minded outfit such as the FDC.”

Even older than the Phoenix FDC is the Economy Budget Service of Columbus, Ohio. Begun in 1955, this service is financed at a $15,000 annual cost on a no-profit, no-charge basis by the Capital Finance Corp., an operator of small-loan companies. More than 400 families have been successfully helped from debt with personal bankruptcies avoided.

Drawing on the experience of the Phoenix and Columbus setups, similar services have been established in Salt Lake City, in both Kansas cities, and in South Bend, Ind. Before the end of 1964 the list will include Indianapolis, San Diego, Denver, Cleveland, Charleston, W. Va., Atlanta and Flint, Mich. By the end of 1965 some 80 other communities will probably have similar programs, thanks to the free services offered by the Consumer Credit Counseling Service Committee of the National Foundation for Consumer Credit in Washington, D.C.*

“It’s a marvelous bargain for the entire community,” says Lloyd Waterson, secretary-treasurer of the Credit Bureau of South Bend and one of the prime movers in getting that city to set up its Consumer Credit Counseling Service. “When we learned that nearly half of the personal-bankruptcy filings here were for less than $2000 and that many were under $1000, our merchants were quick to see how such a program could help restore the community’s good financial health. No family wants to go into bankruptcy. They’re forced into it because the business community simply isn’t paying enough attention to their desperate plight”

Easy-to-get credit has helped millions of people to obtain the amenities of life. Usually it works out well for all concerned. But in a minority of cases, families don’t realize that they are overextending their resources until it is too late. That is why business and financial groups are now trying to help them out of their unforeseen troubles.

The Consumer Credit Counseling Service Committee puts it this way: “Private enterprise has a responsibility beyond offering credit to the public at a reasonable charge. The credit facility was designed by businessmen. It is up to them to see that people are not caught in a trap of debt as they use this system of buying and borrowing. They must offer a helping hand when the chips are down.”

*Any community group that wants to set up such a program can get a free kit of plans, working suggestions and forms from the National Foundation for Consumer Credit. 1411 K St., N.W., Washington, D.C. 20005.

Reader’s Diagest Volume 85. August, 1964

Consumer Credit Counseling Service – Scam, Complaint, Review, or Praise?

Steve Rhode — Wed, 03 Nov 2010 20:40:31 +0000

From How to Get Out of Debt

Please share your experience with this debt relief company and provide your review and feedback, in the comments section below.

The goal of this page is to allow people to share information that may be important to help others to make a more informed decision regarding their experience with this debt relief company. Here are some potential questions you might be able to provide feedback about.

How did you feel about the customer service experience you received?
Was the company easy to communicate with before or after you became a client?
Did the company respond to your communications promptly?
What were the fees charged for the services you received?
Did the company give you the terms and conditions for the program you were interested in before you gave them any personal information?
Was the program successful for you and accomplish the goals you had when you entered the program?
Did you have a really good experience you can share?
Did you have a bad experience you want to share?
Is there any other information you’d like people to know that might be considering the services of this company?

It is important to understand when reading comments below that they are the opinions of the individual posters and may not be representative of the overall impression of all consumers that may have or have not used the debt relief services of this company. But everyone does deserve to have an opportunity to express their opinion, even the debt relief company itself, be it good, bad, or indifferent.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Debt Settlement Companies Being Investigated by State of Kansas

Steve Rhode — Thu, 08 Jul 2010 19:25:04 +0000

From How to Get Out of Debt

Kansas is cracking down on the sales and service of debt settlement services. While tight lipped about who they are specifically investigating, Kevin Glendening, the Deputy Banking Director, has confirmed his office is investigating debt settlement companies.

Glendening says, “Companies that I think consumers should avoid are a lot of the ones that you see advertised on the late night infomercials promising people to get people out of debt and improve their credit magically overnight.” – Source

According to the current Kansas listing the following organizations are the only ones licensed to offer services under the Credit Service Organization Act.

A New Horizon, Credit Counseling Services Inc., Alliance Credit Counseling, American Consumer Credit Counseling, American Credit Counselors, Black Hills Children’s Ranch, Cambridge Credit Counseling, CareOne Services, ClearPoint Financial Solutions, Consolidated Credit Counseling Services, Consumer Credit Counseling of Springfield, Missouri, Consumer Credit Counseling Service of Greater Atlanta, Consumer Credit Counseling Service of San Francisco, Consumer Credit Counseling Service of the Midwest, Consumer Credit Counseling Service, Consumer Education Services, Consumers Alliance Processing Corporation, Credit Advisors Foundation, CreditGUARD of America, Debt Counseling Corp., Debt Reduction Services, Family Credit Counseling Service, Family Financial Education Foundation, Garden State Consumer Credit Counseling,GreenPath, Housing and Credit Counseling, InCharge Debt Solutions, iPayDebt Financial Services, Money Management International, National Foundation for Debt Management, North Seattle Community College Foundation, Take Charge America – Source

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Should I Do CCCS vs Debt Settlement? – Dave

Steve Rhode — Sun, 09 May 2010 14:23:43 +0000

From How to Get Out of Debt

“Dear Steve,

I am behind on my credit card debt to the tune of $35,000. I’ve looked into different options but I’m not sure if I should go cccs vs debt settlement?

What do you think?

Dave”

The Answer:

Dear Dave,

For people that don’t know what CCCS means, it stands for Consumer Credit Counseling Service. These are nonprofit agencies that put together debt management plans based on what the creditors want. They collect money from consumers, send it back to creditors and keep a percentage of collected debt to help pay for their services. It is plain vanilla credit counseling.

Debt settlement is different. There are two types of debt settlement options. The first is a lump-sum approach where you have 60% of the value of the debt is cash you can use to settle the debt by paying back less than you owe. The second type are those groups that collect monthly payments from you until you have enough to settle with. This second approach often leads to a very damaged credit report and continued collection activity.

If you have enough cash on hand to do a lump-sum debt settlement, I’d suggest that first. But use a professional debt settlement agency to do it for you. They know the terms the creditors offer and will negotiation for you without emotion and fear.

If you have fallen behind on your debts and the amount due keeps rising, then consider a debt management program, like CCCS. Click here for debt management information.

Lastly I would consider the installment debt settlement approach. It can be effective but only for the people that are prepared to take the continued collection pressure and threats.

I hope that helps you to decide which path you want to follow. Let me know if you need more help.

Steve

I Am in a Debt Management Plan With Only $100 a Month to Spare. – Lynn

Steve Rhode — Fri, 23 Apr 2010 21:54:14 +0000

From How to Get Out of Debt

“Dear Steve,

I have about 24000 in debt credit cards and loans. I was in a debt management plan about 5 months ago with a local company. I was off of work for a sort time. What I currently pay out now i have about $100 left each month to live on.

If I decide to go with another company can I trust CCCS, will the creditors allow me into another program.

Thank you

Lynn”

The Answer:

Dear Lynn,

If a creditor will let you back in to a program with Consumer Credit Counseling Service (CCCS) is really up to a matter of creditor policy. Some will. Some won’t.

But I don’t think that is the major issue here, affordability is. If you are currently making the minimum payments on $24,000 worth of debt your monthly payment is probably right around $480 a month. Going with a credit counseling or debt management program probably isn’t going to lower the payment much, if at all, from that point. In fact, your total overall payment with a debt management company might be higher. Surprising, I know.

The monthly payment cuts often advertised are for people that are behind in their payments to begin with and have a big amount past due. When you go into a credit counseling program you can often start paying the counseling monthly payment without the past due part. The past due part will get stuck on to the end of the plan.

I’m worried that with only $100 a month left over, if you can even afford a repayment plan at all? If you are not paying for health insurance and saving money each month, any repayment plan that makes those two items unaffordable isn’t safe for you to consider.

If you want to look into a credit counseling program again, do it, but you should also talk to a local bankruptcy attorney as well. Only by talking to both sides will you be able to find the truth for you.

With a $100 margin after bills I think your chances of successfully repaying your debt over five years through a debt management program is slim.

Big Hug!

@GetOutOfDebtGuy

I’m Up to My Ears in Debt. – Nathan

Steve Rhode — Wed, 03 Mar 2010 21:33:49 +0000

From How to Get Out of Debt

Nathan

“Dear Steve,

I am up to my ears in CC debt. I thought about going through companies like care one, etc. I have two cards with capital one, one with wachovia, one with chase. what do i do. this is on top of student loans and i am spreadin very very thin on money. i tried to reason with the companies and working out a plan and they dont want to. they referred me to national credit consuling. why wont they work with me personally if im wanting to come up with a plan that i can afford?

What do i do? how can i get out of this debt totally $7,800 i dont have a whole lot of money each month. i just get by, student loans are killling me. luckily i am eating. i am trying and trying to find PT job on top of my FT job to make ends meat. no such luck yet

Nathan”

The Answer:

Dear Nathan,

CareOne is a credit counseling group. With any credit counseling or debt management company the monthly payment isn’t a whole lot less than the minimum payment you are paying right now. However, the interest rate can be lower. But if you can’t make the minimum payment, big deal.

My concern is that with you living so close to the financial edge each month, I have a hard time envisioning that to be safe for you. Your priority to repay your debt should be student loans, some money in a savings account each month, and then credit card payments.

If you have not looked into lowering your student loan payment, you should. Check out the IBR, Income Based Repayment program and see if you can lower your student loan payment.

If you can, then consider a debt management program. If you can’t get lower your student loan payment and you can’t save and make your credit card payments each month then I think you should consult with a bankruptcy attorney and talk about what bankruptcy would mean for you.

Bankruptcy would not get rid of the student loan debt but it would get rid of the credit card debt and that might give you the breathing room you need each month to get by, save, and oh yes, eat.

Big Hug!

@GetOutOfDebtGuy

The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

Steve Rhode — Wed, 17 Jun 2009 17:15:09 +0000

From How to Get Out of Debt

This is a story that I’ve been working on for a few weeks. I’ve been asking people and groups for feedback and information to write this but what I’ve run into, is a wall.

I have received some feedback from groups and people that don’t wish to be publicly identified to protect themselves but what I have learned has been extremely disappointing or just downright shocking.

The debt solution industry, which consists of debt settlement groups and credit counseling organizations does an absolutely horrible job when it comes to transparency about success rates. And my definition of a successful resolution is a consumer that fully resolves their debt situation through the hands on intervention of the entity providing the services.

For example, a successful DMP is one in which a consumer contacts a credit counseling group and enrolls in the Debt Management Program (DMP). The consumer then fully pays off their debt through the DMP.

In a debt settlement solution a successful outcome is one in which the consumer was able to fully resolve their debt situation and resolve all of the debt they enrolled through settlement, thus eliminating their original debt problem.

With bankruptcy a successful outcome is one in which the consumer was able to obtain legal relief from their debts with either a fully completed chapter 13 repayment plan or a chapter 7 discharge.

I am disappointed that groups that the public trusts, like National Foundation for Credit Counseling (NFCC) and Consumer Credit Counseling Services (CCCS) were not more forthcoming in providing DMP success rate data.

In communications with NFCC I was left with a distinct feeling that they simply did not want to disclose what the success rate or completion rate is of their member agencies even though they collect massive amounts of data from those agencies.

“Not to be cynical but it sounds like you either don’t want to release it or it is not a figure that is calculated and monitored on a regular basis to check agency performance.” Me to NFCC.

Their response. None.

It would seem that in the interest of the consumer clients that the success rate of the DMP from individual member agencies would be a metric that NFCC paid some attention to in order to protect consumers from poor performing CCCS offices. Apparently it is not.

The only debt management or credit counseling group that provided me with a completion rate or success rate of their DMP plan was Cambridge Credit Counseling. In the past Cambridge has lived through some difficult days but I really have to tip my hat to them on this issue. They were willing to be quoted immediately and very forthcoming in data, something that NFCC was not able or willing to do. But yet NFCC is held out as being the white knight and protector of consumers in the credit counseling world. I would urge any journalist that wants to examine this subject to press NFCC hard for an honest and transparent answer on completion rates for a DMP.

Bankruptcy data was available but the hard statistic to obtain was the disposition of chapter 13 cases. Some bankruptcy attorneys were willing to provide me with their experiences on chapter 13 cases but I was not able to get an official number from the American Bankruptcy Institute (ABI) and unable to get a timely official response from the Executive Office of the United States Trustee (EOUST).

I admit that this post may generate some contention and dissension from members of the various camps I discuss but I fully welcome open disclosure and public comments on this post to help set the record straight.

Let’s look at what I learned.

Credit Counseling and Debt Management Plans

The success rate for a debt management plan is in the 20% completion rate range, or less. Cambridge Credit Counseling was willing to be quoted at a 27% completion rate / success rate for thir DMPs. NFCC was not willing to provide a completion rate. As I said to them, the cynic in me says why not provide the facts, unless you don’t want people to know.

In my research I found a report from the the National Consumer Law Center, “The Life and Debt Cycle” that said.

Because of inconsistent and reduced concessions, it appears that only consumers with considerable disposable income left over each month are able to get out of debt through DMPs. It is difficult to find conclusive data on the effectiveness of DMPs. Most agencies do not release information on their retention rates, although a 1999 NFCC memo cited by Consumer Reports found that just 21% of their clients completed DMPs while about the same percentage left to self-administer debt payments. In 2001, the National Foundation for Credit Counseling reported completion rates of about 26% with about 20% leaving for self-administration. The high failure rate in DMPs is undoubtedly influenced by the limited concessions that creditors offer to consumers who enter credit counseling. If consumers cannot significantly lower the amount that they owe, they are more likely to fail in completing a three to five-year DMP.

I suspect that in these difficult economic times that the true completion rate for DMPs across all credit counseling agencies is going to be below 20% with ever tightening family budgets and less extra money for repayment.

For example, Pioneer Credit Counseling on their 2008 990 return (source) said:

One of the primary reasons for such a low completion rate is that DMPs are not calculated on what the consumer can afford, such as in a chapter 13 bankruptcy plan, but on what the creditor wants. The same National Consumer Law Center report summed the issue up better than I could.

The problem is that DMPs, as currently constituted, are only useful for some consumers. Creditors call the shots when it comes to concessions offered through DMPs. They rarely reduce the amount of principal that consumers owe them, never as part of a DMP. Agencies really have only three concessions to offer that creditors will allow. First, creditors can “re-age” a credit card account of a consumer who enters a DMP. Most creditors will re-age an account once a year or twice in five years, the maximum allowed by federal financial service regulators.

Debt Settlement Plans

The Association of Settlement Companies (TASC) published a report on the debt settlement industry and provided it to the Federal Trade Commission.

The report cites a 45% to 50% completion rate of debt settlement plans which I find doubtful. This does not take into account the total number of people that begin to pay debt settlement companies in monthly payment plans and then either fail to accumulate enough money to settle or who bail on the debt settlement program before all or some of their debts are settled.

In fact in a latter statement TASC is cited as saying that only 34% of people in debt settlement programs settle debts. And that statement isn’t even saying that 34% settle all debts. – Source. That number is much, much lower. With the moving estimates given by the debt settlement trade association from 50% to 45% to 34% you can only conclude that the actual percentage of people that are able to settle debts is probably 24% or less.

An interesting fact in the statement issued by TASC is that 6% to 10% of debt settlement clients are sued by their creditors while in a debt settlement program. I’d count that as a failure as well and I am confident is assuming the number is actually twice to three times as high as that.

Insider wisdom is that approximately 10% of all debt settlement clients settle some debts while about only 1% settle all their debts.

The actual number of settlements may be lower than that as consumers with daily economic pressures find it difficult to save up enough money to settle their debts, or persist through ongoing collection calls and creditors while they attempt to save that money.

Debt settlement programs are also expensive. Consumers are paying 17% of their total debt, plus monthly maintenance fees, plus default rates on their debts and penalty fees and/or fees up to $5,000 or more for debt settlement services. Debt settlement for most people is a suckers play.

There is also sufficient evidence to question if most debt settlement companies want to settle their debt at all?

This quote comes from a former bank Vice President in charge of collections:

I have had numerous DSC’s (debt settlement companies) admit they have no intention of settling debt and in fact it is counter productive to their purpose to do so; their main purpose being to enroll consumers, collect fees, and provide such poor customer service and results that most consumers drop from the program and thereby leave the DSC with thousands of dollars in unearned benefit. – Source

The Attorney General of Illinois says this about debt settlement companies.

“What we have learned is that 65 percent of people who initially enroll with debt settlement companies drop out before any communication (with creditors) has been made. Before any of their debt has been settled at all,” says Madigan, whose office has seven lawsuits pending against debt settlement companies. “Those people don’t get a refund. They don’t give you your up-front fees back, they don’t give you your ongoing fees back. You still owe them whatever you signed up for based on that contract.” – Source

The Illinois Attorney General in further investigation stated to the Federal Trade Commission that:

In a statistical review they have done in connection with debt settlement cases, they have found that debt settlement companies have helped less than 10% of consumers resolve any debts at all, and no consumers had had all of their debts resolved through a debt settlement program. – Source

Here is what the Better Business Bureaus had to say about debt settlement to the Federal Trade Commission.

If clients did the math, here’s what they’d find: Assuming the program worked as represented, they’d likely pay the settlement company approximately 40% of the savings balance on the debts settled. When one takes into account that the balances of the debts swell with interest and other fees, the amount of the savings are even more negligible. Finally, in many cases, the amount of debt forgiven is taxable income, thus subjecting the client to yet another surprise which further lessens the savings. Consider the damage done to the credit rating and the potential for lawsuits, etc., and there is no real benefit.

The debt settlement business is insidious. In reality, very few people have debts that are settled and most wind up in much worse financial shape that when they entered the program. We repeatedly see cases where people are forced to file bankruptcy to rid themselves of the lawsuits and their debt. – Source

Here is what Chase Bank had to say about debt settlement in a recent court case.

In recent years, fraudulent debt settlement schemes have flourished throughout the country, spread by the Internet and other mass-marketing routes. Promoters of these schemes generally claim that, for an up-front fee, they will eliminate or substantially reduce a consumer’s debt obligations to creditors without any further material payment to the consumer’s creditors. These schemes, however, have no valid basis in either law or fact, fail to provide any of the promised relief to the consumers who fall victim to them and ultimately result in consumers who are deeper in debt with severely damaged credit scores. These schemes have become so varied and prevalent that the federal Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation now warn consumers about such schemes on their websites and through a formally-issued Alert to other regulators and banks.

Bankruptcy

Having gone bankrupt myself in 1990 and lived with that all these years, I have been under the impression that bankruptcy is not a pleasant solution. But what surprised me the most from my research is that while bankruptcy does cost money, it is generally much less expensive that debt settlement services, and that the majority of people resolve their debt when turning to bankruptcy as a solution.

Chapter 13 bankruptcies, the payment plan approach, are reported as having a high failure rate like debt management plans or debt settlement, but what is not frequently mentioned is that many of those failed chapter 13 plans are converted to chapter 7 bankruptcy cases and the debts are fully discharged that way.

Based on feedback from bankruptcy attorneys, and looking at the total number of bankruptcy cases filed by chapter, it appears that nearly 90% of bankruptcy filers are able to repay what they can afford or discharge their debt through bankruptcy.

Bankruptcy is also a legal solution which forces creditors to play by a set of defined rules. It also terminates collection calls and collection activity and stops pending lawsuits. Neither credit counseling or debt settlement solutions can make this claim.

Conclusion

It is very disappointing that the perceived “good guys” of consumer solutions, the credit counseling industry are not open and transparent about the sad and poorly effective results of debt management programs. This is also troubling since almost every journalist and creditor are steering people towards credit counseling as a solution to problem debt, believing it is a magic solution.

Based on current data, it would appear that rather than help consumers in trouble, they are directing them towards an ineffective solution. And I have not even covered the fact that the credit counseling industry reports that only 7% to 8% of the people who contact a credit counseling group could even afford a DMP. Yes, the rest get budgeting help, advice, or referred for guess what, bankruptcy.

David Jones, the president of Association of Independent Consumer Credit Counseling Agencies said, “The agencies affiliated with the AICCCA used to be able to help 20-25% of the people who came to them to avoid bankruptcy. Now they find they can only help about 7-8%, Jones explained.”

As a solution in resolving problem debt, a DMP it appears among the most charitably promoted but least successful of approaches.

And what troubled me most about this was the fact that I founded and ran a non-profit credit counseling group for a number of years. I’d never seen a comparison of the different approaches while I was running the debt counseling group but at the end, i was significantly disillusioned with the credit counseling industry and would up closing the non-profit I started.

if I had been specifically aware of the effectiveness of each solution it would have changed my outlook on the services delivered to consumers. But that’s easy to say now. When you are drinking the Kool-Aid it is hard to believe that the solution you are delivering may be among the least effective.

There is simply no open forum or discussion on all debt resolution services and completion or success rates for consumers to make fully informed and educated decisions. The data is fragmented, secret, and hard to put together, especially if you are living through the stress and pain of problem debt. If I was running a credit counseling group now I would certainly make sure that each client signed an informed consent statement indicating they knew the chances for successfully eliminating their debt. I realize that would lower the number of people enrolled in credit counseling but at the end of the day, people have to come first.

Debt settlement is another problematic approach. Debt settlement companies do a horrible job of disclosing the tax consequences of settling debt and the chance of being sued while in a settlement program. They also are not forthcoming about the completion rate of people that enroll versus those that fully settle all their debt through the debt settlement approach.

But from experience in assisting debtors with lump-sum debt settlements when they have the cash on hand right now to settle all their debts, the success rate is in the 70% range.

But don’t think this is all a modern problem. As far back as 1955 these types of arrangements had poor success rates. “D.F. Bush, the leading chain office operator in the field, who operates 31 debt-adjustment offices in 13 states and Washington, D.C., told me that only 10 percent of his clients ever complete their payments to creditors.” – Source

Bankruptcy clearly came out as the quickest and most effective solution to resolving problem debt. I’ve lived through it. I know it is painful. But with the power of law behind it and the total number of discharges to filings behind it, bankruptcy would seem to be the most cost effective way for debtors to deal with their debt in the shortest amount of time and receive the most comprehensive outcome.

And let me say, right here, that I invite comments I know there will be disbelievers to what I have said here. Not believing it does not make it so.

I desperately urge any company that wants to dispute these findings to provide on-the-record, public, open and fully transparent data regarding completion rates for people to review regarding their company performance.

Follow-Up

Be sure to read Fewer Than Ten Percent Get Out of Debt With Credit Counseling or Debt Settlement Companies to learn more about success rates of credit counseling and debt settlement.

@GetOutOfDebtGuy

What Do You Think of the CCCS company Money Management International? – Carol

Steve Rhode — Sun, 17 May 2009 16:47:24 +0000

From How to Get Out of Debt

“Dear Steve,

What do think of Money Management International?

Are they the same company as CCCS?

I have about 60,000 in debt and I need help my husband hasnt had a paycheck since Nov
I did my own modification on my house back in Jan.

I have no equity in my house they just lowered the payment and gave me a fixed rate for the remaining 27 yrs.

Carol”

The Answer:

Dear Carol,

First, congratulations on the mortgage loan modification. With so many people not getting much help from their lenders, you got lucky.

Money Management International (MMI) is a member of the National Foundation for Credit Counseling (NFCC) and is a Consumer Credit Counseling Services (CCCS) member office.

I suppose what concerns me the most about your question is that your husband has been out of work since last November and now you are thinking of entering into a debt management plan with a credit counseling office to address your $60,000 in credit card debt.

In a typical credit counseling program your monthly payment for your debt would be around $1,200. If that payment does not fit into your current income or expenses, or it leaves you without the ability to save money at the same time you are getting out of debt, then you need to think carefully about using a debt management or credit counseling program to get out of debt.

A credit counseling debt management plan (DMP) only gets you totally out from under your debt if you make all the payments. There is no reduction in the amount that you owe and the monthly payment, unlike a bankruptcy repayment plan, is not developed based on what you can afford.

I am not pushing bankruptcy on you but you need to understand that in a DMP the creditors control the terms offered to you and can change them at any time. The repayment plan created by credit counseling or debt management companies is not binding on the creditors and it gives you no consumer protection or rights. Creditors may elect to not participate in the plan as well.

Entering into a debt management plan takes faith that you will be able to make all the voluntary payments to your creditors through the credit counseling group. If you don’t you will still be in debt and still in a position where you are living with money troubles and problems.

You owe it to yourself to be as fully informed as possible before you make a decision to enter a credit counseling program. I strongly suggest that you go and meet with a local bankruptcy attorney to learn more about what bankruptcy would mean for you and how you would be able to keep your home. Nearly all bankruptcy attorneys will meet with you for free to discuss these issues.

After your meeting with the bankruptcy lawyer, you will be better educated about the difference in a credit counseling and bankruptcy solution. Only then will you be able to make the best decision possible for you and your financial future.

Please let me know what you decide to do.

Big Hug!

@GetOutOfDebtGuy

Disturbing and Potentially Deceptive Move by Credit Card Industry. HelpWithMyCredit.org

Steve Rhode — Mon, 20 Apr 2009 17:50:56 +0000

From How to Get Out of Debt

It what certainly feels like yet another self-serving action by the credit card industry, Bank of America, Capital One, Citi and Discover Card, as well as the payments networks MasterCard and Visa have launched a new website HelpWithMyCredit.org that misleads consumers.

What appears to be even worse, is that a CNN personal financial reporter that I normally respect, Gerri Willis, has fallen for the trap. See CNN.

The website promotes itself as a banking industry effort to assist consumers that are struggling with debt problems. It even provides a self-help section that allows visitors to answer questions and guide themselves towards an appropriate solution. But what you don’t notice, until you look closely, is that the site simply guides consumers to credit counseling groups, and makes no mention of bankruptcy. The credit counseling groups specifically recommended on the site are Money Management International, Novadebt and Take Charge America, along with the networks of the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies.

I cringed when I read the site, for me, it is a strong and open reinforcement that the relationship today between credit counseling groups and credit card companies, is self-serving at best and truly deceptive at worse. What concerns me most is that consumers are being lead to believe that credit counseling is a legitimate solution for them at large, with no mention that credit counseling groups are compensated, by banks, by a percentage of the money the credit counseling companies collect from consumers and return to the banks.

If this credit card industry was truly interested in assisting consumers with their debt situation, instead of simply directing people into the hands of only one self-serving solution, credit counseling, in the interest of balance and fairness, there would be equal information provided about bankruptcy or even lump-sum debt settlements as a legal and viable option. There is not. What are we to deduce from that glaring omission?

@GetOutOfDebtGuy

Most Debt Advice Suggested is Snake Oil or the Wrong Solution For People In Trouble. Here’s Why.

Steve Rhode — Sun, 05 Apr 2009 23:26:25 +0000

From How to Get Out of Debt

I’ve been following the conversations on Twitter (@GetOutOfDebtGuy) and watching what others are saying about debt management, credit counseling, debt settlement and bankruptcy and it really has me worried and concerned.

I’m a guy that lived through financial problems myself and went bankrupt in 1990. I then went on to found and run a non-profit credit counseling company, Debt Counselors of America and Myvesta, for twelve years. I’ve served on the board of a Consumer Credit Counseling (CCCS) office, been to the restricted meetings of National Foundation for Credit Counseling (NFCC), I’ve met a lot of the creditor representatives and toured the inside of credit card operations. I’ve been on the inside so I am confident that I know what I’m talking about when it comes to consumer debt.

But here is where I really struggle with the concept that credit counseling, debt settlement, or bankruptcy is a better solution to the problems of someone in debt. No one solution can be the right tool each and every time.

Debt management can’t be the universal fix for all money troubles, but experience and logic tells me that neither can any other solution. The promoters of debt solutions, some of which are nothing but opportunistic hucksters, keep trying to sell their debt relief snake oil as if it is a magic wand. It isn’t and it can’t be.

I was once heavily inside the credit counseling industry and yet even then it was my belief that not one solution is the best path for all to follow. That belief eventually lead to the closure of Myvesta the non-profit organization in the United States, the termination of a lot of great people whom I loved and respected and the loss of a pretty substantial relationship. And yet I made more money running that group than I probably ever will in my life again and yet my beliefs wound up causing me to cut my own throat and close it down. You see, I just could not, in good conscience, bend to the creditor pressure that everyone needs to go into a debt management plan (DMP) as the best approach.

So when I see non-profit companies today, pushing the magic of debt management, or newly formed organizations selling debt settlement as the single fix solution to all debt woes, it makes me angry. Angry, because if the consumer, the individual in debt, is the center of caring and compassionate advice, a one-size fits all solution is not the right answer. You first need to listen to the goals the debtor and their wants or needs they to achieve and then present a solution that achieves that need.

Credit counseling groups suggest debt management far too often and inappropriately because that is how they make money. The public does not understand that for credit counseling or debt management groups that service is the product. There are sales quotas, bonuses, and sales training that is given to sell consumers debt management services. Unsuspecting debtors are put in debt management, debt settlement, or bankruptcy programs every day simply to extract money from the consumer, not because it is the right solution for the person in trouble.

Lord knows that I have made my share of mistakes in life, but one mistake I am proud to say that I have always avoided was to suggest or recommend any solution to anyone that came to me as a sale or if it was not the right solution for the individual. Having walked in those uncomfortable shoes of debt, I try, each and every day to remember how that felt and to treat each and every debtor as my brother or sister in debt.

On my GetOutOfDebt.org site I answer questions from people in debt, every day. And in order to help the anonymous person find a direction to look for assistance I might suggest one of the tools (debt management, debt settlement, bankruptcy) to investigate to address their situation. I also typically suggest that the person investigate more than one option and then decide which solution would best fit their needs. I am not wed to any one solution in my advice.

And if someone clicks on an advertisement on the site or fills out a request form, that might generate some revenue for the site*, but that is absolutely not what drives me to help people for free. I’m just as happy if someone does not click on a link or fill out a form as long as they get advice which helps to clear the fog of confusion and doubt and guides them in a direction that allows them to find a reasonable solution to their debt problems that best meets their situation.

The solution that debtors need can’t be defined by a single product but by a single philosophy. That is the philosophy of caring, compassion and guiding the debtor to the right specialist to deliver care.

If I am an ophthalmologist and I’m manning the emergency room, not every patient that comes through those doors is going to need eye care, but they are in need of some care. It would be my job to triage the patient and get the appropriate specialist, maybe a neurologist, to see and care for that person. The exact same thing is what is needed in the debt world.

I look at my GetOutOfDebt.org site as a financial emergency room. I read questions from debtors around the world and triage the situation and guide people to the right specialized care using my life experience and knowledge.

I’m afraid that those that simply promote and sell a single solution for debts problems are not doing that. Instead what they end up doing is turning people away that don’t fit the money making model of the promoter or put people into solutions that are not going to succeed only to line their own pockets.

Trust me, I don’t want to be sad or cynical about this. I would love for the world of debt relief to be different and in the perfect world that I envision, every person in trouble could go to any debt assistance provider and find the best solution rather than the solution du jour.

It is not a perfect world.

Steve

* And by the way, I use the revenue from the site to help support people in need and I donate all of my time, for free, to answering questions. My belief is that if you do good things in life, good things will happen. I’m not a saint, just some that really cares, that’s why I give away so many hugs at the end of my answers.

I Have Contacted CCCS and Money Management International And Was Told They Can’t Help Me. – Josephine

Steve Rhode — Wed, 01 Apr 2009 08:00:23 +0000

From How to Get Out of Debt

“Dear Steve,

I have contacted CCCS and Money Management International and was told my debt/inome ratio would make it impossible to make payment arrangements with citi that I owe $25,000.00. Then I saw a bankruptcy attorney.

The bankruptcy atty told me that I have too much equity in my house to go bankrupt and yet I can barely make ends meet with the mortgage payment I have. How can I keep my house and pay back Citi?

Josephine”

Quickies – CCCS Consumer Review, Autos, Cards, Balances, and Debt

Steve Rhode — Tue, 24 Feb 2009 22:06:13 +0000

From How to Get Out of Debt

When I need a break from answering questions I often take a look for some odd or interesting search terms that people used to find me. Below are some of the latest I saw today that I wanted to provide quick answers to.

Steve

Search Terms

CCCS consumer review – CCCS stands for Consumer Credit Counseling Service but it has become a generic term to describe many type of credit counseling groups. Searching for a review of an entire class of debt adjusters is not going to give you the results you are looking for. Like any group of entities, there are some good, some bad and some horrible outfits out there. The key point you need to be aware of is the tremendous conflict of interest between the needs of the consumer and the needs of the creditor. CCCS is primarily funded by collecting money from consumers and sending back the money to the creditors. Essentially pay for performance non-profit debt collectors.
finance how much of my pay should go towards a car – There is no percentage. It’s a bit like asking how tall someone should be or how long a piece of string is. Your car payment should be factored into all of your other obligations and you should then make sure you can pay those obligations, save some money and have some fun. If you can do that then you are doing okay.
www.help with my cards .org – No such site.
getting credit card companies to lower balance – Best laugh I’ve had today. Credit card companies and not just going to lower what you owe without you having cash in hand to pay them. A credit card company might accept less than you owe in a debt settlement but the remainder of the debt forgiven will be taxable income to you and reported as a bad debt on your credit report.
legally write off debt – Yes you can. It’s called bankruptcy.

Michael is Looking For a NFCC Debt Settlement Program

Steve Rhode — Thu, 18 Dec 2008 17:10:39 +0000

From How to Get Out of Debt

Michael

“Dear Steve,

I am approx. 30,000 in cc debt.Am cuurrent with payments but future doesnt look so good. Needed money for medical bills and to keep operating my business-excavating.

I am looking for a good debt settlement program-is the NFCC something to consider or is there others.

Thanks.

Michael”

The Answer:

Dear Michael,

When you mention NFCC I believe you are referring to Consumer Credit Counseling Service (CCCS), which are essentially franchise offices of NFCC.

I am not aware of an NFCC office that offers debt settlement services where you enter into an agreement to settle your debt for less than you owe.

These offices offer the traditional debt management or credit counseling program. My concern over their activities is that they are probably under the most creditor control of any debt management company. They have a tremendous void in their criticism of creditor activities and while they offer casual consumer advice, I challenge you to find any evidence where they have been proactive in helping to stamp out mainstream creditor actions which harm consumers.

They don’t want to rock their funding boat. You see, a large part of their income comes from money paid back to them from the creditors as a result of collecting money from a client in a debt management program and returning it to the creditors. This becomes nothing more than fee for service debt collection work under a tax free not-for-profit umbrella.

I think you may be better served by seeking debt management help from an agency that is an independent, rather than a part of NFCC. They may provide you with greater representation. Click here for debt management information. Or if you want to examine debt settlement options further, click here for debt settlement information.

After you evaluate what options are available to you in a debt management plan (DMP) you should also talk to a bankruptcy attorney to learn if bankruptcy might be better for you in your current situation. Most bankruptcy lawyers offer a free consultation to discuss if bankruptcy is right for you. Only after you have explored both options will you be better able to decide which path is best for you to follow.

Thanks for the question.

Steve

The Answer:

Federal Trade Commission Should Allow For-Profit Credit Counseling and Debt Settlement Firms to Assist All Consumers

Steve Rhode — Fri, 14 Nov 2008 22:55:22 +0000

From How to Get Out of Debt

I understand that the Federal Trade Commission has been looking into regulating the debt settlement industry. I feel the time has come to finally address the needs of consumers for representation in credit counseling and debt settlement matters.

I have provided a statement to the FTC in order to support the acceptance and regulation of for-profit credit counseling and debt settlement groups, nationally. Nobody has paid me to do this. I offer my testimony of my own free will based on my experience and what is right.

It is important to share my statement with you so you can better understand the lack of proper representation that consumers are getting under current regulations that favor or only allow non-profit groups, paid by creditors, to represent consumers.

As the founder of a non-profit credit counseling group and after having served on the board of directors of a Consumer Credit Counseling Service office I have observed the debt settlement and credit counseling industry from the inside.

Wrongly, many in the non-profit credit counseling world make every effort to keep out for-profit groups that want to provide help and assistance to consumers. I am afraid that the primary reason for this is so that the non-profit groups can protect market share and not to improve the service and assistance given to debtors in trouble.

There is not one thing that a non-profit credit counseling group offers that could not be better offered by a for-profit group.

For-profit groups should be regulated by a federal statute to provide one set of licensing and regulatory instructions to operate under. Trying to operate under a patchwork quilt of various state laws only increases the hardship on any group wanting to help consumers and does not provide a single additional tool to allow any third-party to have better solutions to offer consumers to deal with their debt situation.

The economic cost of compliance with so many various regulations is one of the primary reasons why my group decided to stop providing assistance to consumers and to close our non-profit organization.

Not-for-profit credit counseling is severely handcuffed by current funding schemes. They are forced to please the funding sources which are the exact entities that they should be standing up to in representation of their client, the debtor.

In other parts of the world, groups that provide help are for-profit and it does not destroy the industry. The minority of help in the UK, for example, is provided by non-profit groups who appear to be even more closely bound to the creditors with former creditor executives even engaged in the management of the credit counseling groups.

It is time that people begin to focus efforts on serving the very person that requires the best representation that we can give, and that is the consumer. Consumers deserve options. If a consumer wants to go to a non-profit clinic and receive non-profit limited services, that’s fine. But a consumer should not be prevented from seeking professional representation and advanced services from another group, even if it is for-profit.

Ever since I first started helping debtors, in 1994, there has not been one single law passed that gave consumers, who want to repay what they can reasonably afford, an opportunity to do so. But there are solutions that we can pass to level the playing field and to give consumers a fair chance at debt solutions other than bankruptcy.

But consumers have not been properly represented by non-profit groups. Non-profit groups have almost no record of standing up for and defending consumers against banks and creditors. While they may make statements about budgets and finances, you will find little to no outspoken comments about the inequities of the non-profit debt management solutions because the non-profits don’t want to risk their funding and thus do not fairly or properly represent the consumers best interest.

A for-profit debt counseling or debt settlement industry in the U.S. would give consumers the opportunity to have groups want to move forward with new solutions, to lobby against creditor abuse, to fight for the consumers that are not well or properly served now, and to allow profit to attract the best and most talented staff.

There is legal aid and their are lawyers that charge for services. There is medicaid and their are doctors that charge for services. It’s about choice.

Please give consumers a chance and allow for-profit groups to exist, be creative, to fight for new solutions, to raise excellence through competition. This can be safely done with one federal set of licensing, bonding and regulatory guidelines and your action will for once, give good people with bad debt a real fighting chance at a better life.

Jeannie Already Went Bankrupt And Is Now With CCCS But Can’t Afford to Feed Her Daughter

Steve Rhode — Mon, 13 Oct 2008 16:51:51 +0000

From How to Get Out of Debt

Jeanie

“Dear Steve,

I have already gone to bankruptcy five years ago. I am currently in credit counseling, however, I do not have enough money to provide food and clothing for my child. I am a single parent not receiving child support, I have no child support judgment. Long story, but I felt it was in the best interest of both of us to cut off contact.

If I filed chapter 7 in 2003, can I file chapter 13 in 2008? Will that be better for me than the CCCS (Consumer Credit Counseling Service) debt management program?

Jeannie”

The Answer:

Dear Jeannie,

I think in a way you’ve answered your own question. The debt management plan you are on with CCCS, a non-profit credit counseling group, does not leave you enough money to properly care for you and your child.

It is understandable and admirable that you want to do everything you can to take care of your family and I recognize that it is a struggle and burden. But at this point you need to think about the fact that you probably have a greater responsibility to properly care for your child moving forward than trying to repay bills that you can’t afford to pay from the past.

I think your instincts are on target and that you should go talk to a bankruptcy attorney for a free bankruptcy review. And you are right, since it has only been five years since the last bankruptcy a Chapter 13 bankruptcy is probably the solution at this time.

In a perfect world your daughter’s father would be paying child support and you would not have to be in this position and struggling to care for your precious daughter and your debts. But then again it’s not a perfect world and we have to do the best with what we’ve got. The best you can do right now is take care of the past bills with bankruptcy and get yourself in a financial position where you can properly care for you and your daughter by feeding and clothing your child.

Don’t let your guilt about the situation and the pain of your previous bankruptcy hold you back from making the right choice this time. I think if you talk to your CCCS counselor and tell them the same thing you’ve told me that they would, or at least should, agree with my advice to look at bankruptcy again as the logical solution.

Now, please make sure that you were not using credit up till this point to help make ends meet because going bankrupt again will not solve that problem. Hopefully with your second bankruptcy you will be able to find a way to live within your income without any dependence on outside credit.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Crys Writes In And Asks “We’ve Been to Credit Counseling But Should We File For Bankruptcy?”

Steve Rhode — Thu, 25 Sep 2008 20:10:16 +0000

From How to Get Out of Debt

“Dear Steve

Hi! I am a piano teacher, and due the bad economy have very few students, even though I am used to having plenty.

We just moved because we could no longer afford where we lived. We gave up our house in a deed in lieu of foreclosure. My husband took a cut in pay.

We owe about $400 per month on credit cards, and owe a total of about $12,000. I also owe about $22,000 in student loans. Those will start next month, increasing our $400 to $620 or so with the loans. We barely have enough money at the end of the month to pay rent and other living expenses.

We make roughly $1,500 a month. This is not good. We have talked to credit counseling, and they have us paying about $320 to them and they will pay the credit cards. But we still are short. Our bills now, including food and gas, average about $1650. Obviously, we fall short. We have a 7 month old baby who needs things, and we can’t afford it.

Should we file for bankruptcy?”

Dearest Crys,

Here is a big virtual hug for you to help you through today. The stress of what you are living through surely is intense. I still remember what it was like when I lived through it.

I’m struggling to answer your question because there is so much to say. Your situation typifies the kind of bind that many good people are facing.

Your income is down through no fault of your own, you already made hard choices and downsized your living arrangements, you’ve got student loans looking for payments and you can’t hang on.

I used to run a credit counseling organization. Things were a lot different back then but I do understand the inside of the credit counseling industry. You went to visit credit counseling and they put you on a payment plan but they probably should not have done that.

Credit counseling today makes money not by giving the best advice, but by putting people into repayment plans. They get a percentage of the money they collect ‘donated’ to them by the banks. This is the same arrangement that debt collectors have with the banks.

Credit counselors are incentivized to put you into a debt management plan, unless people go into one and make their payments the credit counseling group does not make money. But they must make money to stay in business or they won’t be around to help people. It is a corrupted vicious circle with opposing motives.

Credit counselors do not put together a repayment plan that is affordable and best for you. They instead tell you what creditors will accept when you are working with a credit counselor. Ultimately the better solution is to take what money you can afford to repay each month and divide that among your creditors based on the percentage of debt you owe each. Let’s say you owe one Visa card an amount that is equal to 25% of your total debt. If we were going to be fair to all parties then that Visa card should get 25% of the available money you can afford to pay each month. That’s not the way credit counseling works. And furthermore, credit counselors do not ‘negotiate’ with your lenders, they are told by the lenders what your payment will be.

Based on what you’ve shared with me, thank you, it sounds like what you can really afford to pay after the student loans kick in is around $100 per month. You need to use more money to pay for the student loans but you can’t cut the budget so close that you’ve allocated every single dollar for repayment. You need to leave some room in your budget for fun and emergency savings.

Unless you budget in some fun it is highly unlikely that you will be able to live month-to-month for the next 5 to 7 years in a credit counseling program. You, like most, will fail along that path and all the funds you struggled to pay each month, until the plan fails will be wasted. It won’t eliminate your debt.

I’m absolutely not being cynical here, just honest and real.

You asked if you should go bankrupt, absolutely. You should go see a bankruptcy attorney for a free bankruptcy review and if you walk out of that office knowing that bankruptcy is for you, then file bankruptcy as soon as possible. I would strongly advise you to meet with the bankruptcy lawyer before you make any more payment to the credit counseling group.

I’ve slammed credit counseling pretty hard in this answer but there is still a time when credit counseling can be beneficial, that’s when you need to bridge a short term gap before your income will return and you can resume your regular payments.

In this economy and without any real hope that piano playing and paying students are going to return in droves, holding out for more income right now would probably be a mistake.

Go file bankruptcy and then come back and share with us your experience.

Super big hug.

Steve

How to Get Out of Debt With the Get Out of Debt Guy » consumer credit counseling service

A New Way Out of Debt

A New Way out of Debt

Other Related Articles to Read

Consumer Credit Counseling Service – Scam, Complaint, Review, or Praise?

Other Related Articles to Read

Debt Settlement Companies Being Investigated by State of Kansas

Other Related Articles to Read

Should I Do CCCS vs Debt Settlement? – Dave

The Answer:

Other Related Articles to Read

I Am in a Debt Management Plan With Only $100 a Month to Spare. – Lynn

The Answer:

Other Related Articles to Read

I’m Up to My Ears in Debt. – Nathan

The Answer:

Other Related Articles to Read

The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

Follow-Up

Other Related Articles to Read

What Do You Think of the CCCS company Money Management International? – Carol

The Answer:

Other Related Articles to Read

Disturbing and Potentially Deceptive Move by Credit Card Industry. HelpWithMyCredit.org

Other Related Articles to Read

Most Debt Advice Suggested is Snake Oil or the Wrong Solution For People In Trouble. Here’s Why.

Other Related Articles to Read

I Have Contacted CCCS and Money Management International And Was Told They Can’t Help Me. – Josephine

Other Related Articles to Read

Quickies – CCCS Consumer Review, Autos, Cards, Balances, and Debt

Search Terms

Other Related Articles to Read

Michael is Looking For a NFCC Debt Settlement Program

The Answer:

The Answer:

Other Related Articles to Read

Federal Trade Commission Should Allow For-Profit Credit Counseling and Debt Settlement Firms to Assist All Consumers

Other Related Articles to Read

Jeannie Already Went Bankrupt And Is Now With CCCS But Can’t Afford to Feed Her Daughter

The Answer:

The Answer:

Other Related Articles to Read

Crys Writes In And Asks “We’ve Been to Credit Counseling But Should We File For Bankruptcy?”

Other Related Articles to Read