We are currently $72,000 in credit card debt and personal loan (Capital One). My husband is quite ill and had to retire. I have been current on all my debt and paid it down considerably over last 2 years (I have paid aproxx $20M0 Now with my husband not working I don’t thinkI can hang on.
Have you heard of Consult America who is related to Credit Advocates Law Firm.? They have given me a proposal for what they call a “financial hardship program” whereby they will work with creditors to settle debt.
They say they are not a standard settlement company and that they handle any and all summons/lawsuits that might result. They claim the have excellent relationship with all of our creditors and they wouldn’t “accept” us if they didnt. They have a 36 month program whereby they show us being debt free at the end of the program. They sent me papers and said I have to meet with a local attorney or paralegal to go over it all before program can start.
I dont’ know what to do. I am afraid I will not be able to continue the $2900 a month I am paying all the creditors. The big one is $827 in a personal loan to Capital One for 2-1/2 more years. and also BOA of $510 a month for 3 more years. I bring home approx $60 00 a month. We have a first and second mortgage of $1600. Our 1st will be paid in 2-1/2 yrs. I can’t get anyone to talk to us about refinancing and using equity in our house because of our debt to income ratio. Do you know if these people are reputable and do you have any other suggestions. I am about to lose my own health over this mess.
I’ve previously written about Consult America and people have brought Credit Advocates Law Firm to my Attention. Last I checked, Ryan Sasson was a part of Consult America and he now works for Legal Helpers Debt Resolution.
One of the issues I raised before about Consult America is that they claim to be located at 1400 Broadway, Manhattan, NY 10018 (source) but New York does not have a company by that name registered to do business.
I’m very concerned that someone may be selling you into a program or solution that does not make sense for you. Your life is already full of stress and your husband is quite ill. You even say you are about to lose your health over this.
If you do go the settlement route and you can’t settle quickly because you don’t have cash on hand to settle, you will have to save cash over a long period of time and probably do that by not paying your creditors. The settlement company may even take their fees in advance of settling any of your debt and not refund fees if they are unable to settle. But that’s not even the most worrisome part. You see there is no guarantee settlements will occur. On top of all the other stress and worry you have now you’ll have to worry about a creditor suing you and placing a lien against the house or garnishing your wages when you stop paying.
I just can’t see how that additional emotional baggage is going to improve the quality of life from where it is now.
Before you do anything you should click here to find a local bankruptcy attorney who will evaluate your situation for free. Since you have so much equity in your house a chapter 13 bankruptcy may make perfect sense. It would allow you to keep your house, pay creditors what you can actually afford to, and discharge the rest of your unsecured debt at the end of your payment plan. Best yet creditors would not be able to sue you or hassle you.
I’m curious, what fees were these companies going to charge you for this service? I’m a bit suspicious because typically the face-to-face meeting setup you describe is to get around the rules of charging fees before delivering the work. It’s a loophole in the law some exploit.
Please post your responses and follow-up messages to me on this in the comments section below.