Question:
Dear Steve,
I have some credit card debt I would like consolidate to reduce my payments. As of now I have never paid late, but it’s now harder and harder for me to make the minimum payments. I have about $16,700 in credit card debt and monthly payments for all card is close to $800.
I spoke to a company called “Finance Solutions” and they said they can help by negotiating a settlement and reduce my monthly payment down to about $350 a month. The deal sounds to good be true, I’m doing research on the company before a make a bigger mistake and agreeing with their terms. so far I not find much on the company. The $350 would automatically be drafted from my account and place in a savings account and pay settlements from this account as a settlement is agreed upon.
I don’t like the fact that they say I would have let my accounts go delinquent so they can start the negotiation with my creditors.
My questions to you are:
Are you familiar with this company? Here’s the company info:
FinanceSolutions.org
132 East 43rd St. # 237
New York, NY 10017
and if you are familiar with this company would you recommend their services and their methods of debt consolidation?
Jose
Answer:
Dear Jose,
I’ve written about Finance Solutions before. You should click here to see those previous posts.
Without knowing more about your situation it is hard to say if that would be a good path to follow.
In general, I would be concerned that since you said things were getting tight that you are not able to save money each month in an emergency savings account or for retirement.
I believe Finance Solutions is a sales-oriented organization that may use commissioned salespeople to provide you with advice. In that case, they may not provide you with a more comprehensive view of your situation.
But you can go and gather your own information to make a better decision for yourself and then decide if Finance Solutions is who you want to take control of your financial future.
One thing you could do is look at different options by using my online Get Out of Debt Calculator.
But I think you should also find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.
Finally, you should do your own research to make sure you are comfortable with the company.
I would recommend that anyone considering using such a company should read the following free guides.
- The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
- 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
- How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off
I wandered through their site at FinanceSolutions.org for a few minutes and found information that I didn’t think was the complete story and made their solutions seem positive. I get it. They are trying to make the sale.
But I’m assuming you are looking for what makes the most sense for you and not for them.
For example, they appear to try to talk people out of bankruptcy by saying, “Bankruptcy has an array of long term negative consequences. Your credit score will suffer for many years, though if your credit is bad already due to late payments and collections, it may not be reduced much more. Lower credit scores may result in higher insurance payments, difficulty renting an apartment and even difficulty finding a job. The filing will be reported to your credit report for up to 10 years and is considered public information. During the years following a bankruptcy you will have difficulty qualifying for credit, which includes buying a home or car. The further in your past the bankruptcy occurred, the lower negative impact it will have on your credit worthiness. It takes time to rebuild and reestablish credit after a bankruptcy.” – Source
But bankruptcy is the fastest way out of bankruptcy in the shortest amount of time. Not only do people do better when filing bankruptcy, but they can qualify for mortgages and new car loans in a year or so. Besides, with a little effort, it’s pretty darn easy to build good credit.
Finance Solutions says bankruptcy will be reported on your credit report for up to ten years but what they don’t seem to clearly say on that page is if you default on your debts as suggested then that will be reported for seven years and you may be sued by your creditors.
Here is my bottom line. I just think you should do some more research and make sure you select the best path for you. For example, I didn’t see anything on their site about what the potential lost retirement savings would be if you went bankrupt and then started saving for retirement rather than making years of payments. See what making years of payments will cost you in lost retirement savings.
So go and do some more research and then come back and update me in the comments below and let me know what you decide to do.
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Question asked.
I answered your question about Finance Solutions.