I recently contacted Freedom Debt Relief to try and get out of around 8000.00 in debt. I felt comfortable talking to them because they didn’t ask for any fees right away and seemed like they were better than a lot of the stories out there made them seem. I have been struggling with this debt for 7 years and it has only gone up over the years (the interest rates too). I just wanted some help trying to get it under control. They told me that they would work with my creditors to reach settlements that could help me get out of this hole I’m in. They set up an account that I would be transferring $250.00 to each month in an attempt to reach settlements with the companies. I have 5 credit cards – HSBC, American Express, Chase, Capital One and Bank of America and they said they were all tier 1 companies that they work with all the time with great results. They told me that it would be difficult to get a loan for 18-24 months but that after everything got paid off my credit score would probably be better than it is now (about 550). The fees are charged out of the account I pay $250 dollars into and they are very small.
I received some forms welcoming me but was confused because they say Century Negotiations Inc all over them. I have never contacted Century Negotiations before and have no idea how this happened. They deducted $250 from my account as expected but I am still getting daily calls from my creditors which I was told by CNI to ignore because they were going to take over negotiations with them. I am afraid of what might be happening here. I don’t have enough money to pay all the credit card companies because of the massive interest and minimum payments so I’ve been just paying CNI like I was told to. They also sent me a letter telling me that American Express may be more aggressive than other creditors in trying to retrieve a debt.
Am I being scammed? Is this how debt negotiation companies always operate or is this unusual? Should I be paying CNI and the other Creditors (especially American Express) simultaneously against CNI direction or will this make it harder for them to reach a settlement? Are there heavy penalties for settling this way? Why are my credit card companies still calling me so often if they are being negotiated with? Will this hurt my credit score worse than they say it will? How did CNI get this account from Freedom Debt Relief?
This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.
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So is it better to allow accounts to go into late status prior to trying to negotiate a reduced payment plan through a 3rd party service?
The more important question is if you are ready to let your accounts go delinquent, face collections and possible lawsuits, have cash on hand to settle your accounts right now, and are willing to take the credit hit and face the potential tax consequences.
Adam, “Been there and done that” with another company. Credit was sunk! Went to chapter 13 and things just got worse. From a “getting the monkey off my back” feeling of relief the absoulte best thing I ever did (and my wife will say the same thing) was to file chapter 7. We were in a split mortgage with a huge balloon payment coming up and several other huge payment/interest situations. We got the house off our back by a voluntary foreclosure through the bankruptcy. Long story short: we wasted our money, time and sanity tryiing to get other people to take care of our problems. If you are qualified and can do it go chapter 7 and start a new life! Best of luck to you.
Hope it works out for you with this company. I unfortunatley got in with the wrong company, Next Generation, and got scammed. Hoping to recover my money. Eli Smart is a pretty good liar.
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Adam             Freedom Debt Relief and Century Negotiations, Inc. have had regular business arrangements like this for many years. You should feel as comfortable with CNI handling your accounts as you would if Freedom were working on your accounts. Check out CNI at http://www.centuryni.com. They have been in business nearly 10 years and are an accredited member of the national association, AFCC (American Fair Credit Council).
Adam,
This is the way debt settlement works. You are stiffing your creditors and hoping they blink and settle for less than you owe. If this is successful, your credit will suffer significantly and will not come back quickly. During the process you will certainly be subjected to collection efforts and when complete you may owe taxes on any amounts over $600 that are forgiven.
If it isn’t successful, your creditor(s) will seek a judgment and try to garnish your wages. I like to think of it as financial Russian Roulette where the blanks still burn. The good news (?) is that the damage is likely done. Your accounts have likely been charged off and turned over to collections. Your credit report probably shows multiple charge offs and will for seven years. You may not have much choice but to follow through.Â
Your next option is bankruptcy. That may have have been a better option if you qualified for a Chapter 7 filing and if your settlement goes south (and many do) it is probably the only option you have left. And, contrary to the other comment, of course your FICO score can be 550 and even lower (the range is 300 to 850).. And at even 550 you are certainly sub-prime and unlikely to get any credit that doesn’t involve meeting someone in a dark alley.
Please do let us know if your settlement plan works. I only hear from folks who got burned and I would love to hear from a consumer with a debt settlement success story.
Good Luck!
Adam,
I first would read your contract as it will clear up many of your questions. FDR is a very good comapny with really good executive leadership. It appears that FDR has contracted Century to handle your negotations, which in the post TSR rule era is not uncommon. Your credit score may go down more but at 580 you shouldn’t be appling for any new credit anyway. Your credit score will recover as your debts are settled. Many times we have seen our clients credit scores be over 700 once they complete the program. One more thing on credit, I believe the worest credit you can have is between 620-680. My reasoning for this is you can almost get apporved for anything you want but you will be charged the highest levels of interest. Be patient with your process and stay commited and you should see the results that you were promised.Â
Good Luck