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Consumers Alliance Processing Corporation is Offering Me Help

By on March 23, 2016

Question:

Dear Steve,

My name is Amie and I am almost 45 years old. I became permanently disabled in 2001, due to a chemical that was passed to me by my father during his service in the Vietnam war. I have a considerable amount of debt for someone who lives off of disability and though I am not late paying my bills, and usually pay more than the minimum. I’m not making any headway! Additionally, due to lots of medical debt (40 spinal surgeries, many serious infections & a ton of rehabilitative services/in-patient stays), my credit is rating is poor (almost fair) but poor nonetheless.

My question is, I was contacted by Consumers Alliance Credit Processing (have no idea how they got my info) and was quickly convinced that a great plan for me to get ahead was to enroll with them in a program that would take my 2 highest credit cards, and 1 loan-combine them , get a lower interest rates on each and pay one amount every month. Naturally, being foolish and without doing any research I said yes. I have yet to SIGN any paperwork, however, I did say “yes” on a recorded line. This program is suppose to begin April 5.

Can I get out of my “contract”? Is it smarter to speak with the bank I have been with for 21 years and see if this type of program is available with them? Are these even smart business? I will still be paying all of the money back, just at a lower interest rate. Finally, how do these types of programs effect my credit score?

I really any and all advice you can provide me!

Sincerely,

Amie

Answer:

Dear Amie,

I’m not sure Consumers Alliance Processing Corporation sounds familiar to me so I can’t offer any specific advice about the company except my general guides below about how to check out a debt relief company.

  1. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
  2. 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
  3. How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

I guess it sounds like they sold you a credit counseling product. At least that’s what your description sounds most like.

But I don’t think there is any way for you to have a good understanding if that is the most logical solution for you in your situation.

There are so many issues at play here. For example, what is the expectation you will be able to safely care for your financial health moving forward and is a consumer bankruptcy a much better option for you? Hopefully Consumers Alliance Processing Corporation explained to you that those who file for bankruptcy often do better financially than those who don’t. That’s what the Federal Reserve Bank of New York concluded.

Using math, bankruptcy is the fastest way out of debt in the shortest period of time. And more importantly, it is the least expensive way to allow you to save for the future when you’ll need money the most. It allows you to get immediately back to saving money for retirement and not lose years in repayment. Use my online calculator to see how much you could lose in retirement savings.

Maybe this plan of action sounds like a good way to approach your situation.

1. I’d suggest you first read this, this, and this. They will give you a great overview of what we need to deal with to get you moving in the right direction.

2. Then read my guide 8 Easy Steps to Eliminate Your Debt Checklist and use the free How to Get Out of Debt Calculator to review your options.

3. Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.

As far as your credit score goes, that’s really the least important issue since good credit is so easy to rebuild. If your credit score is the most important thing to you then pay your payments in full each month, never be late, and make sure you have no delinquent accounts or accounts in collections. As you pay off your accounts then your score will increase.

If you want to see how stupid easy it is to rebuild your credit, click here.

But the issue that is most concerning to me is how the debt was accumulated. If it is the result of needing to use credit to make ends meet on a disability income, then no matter what solution you embark on you are going to have to make sure you structure your life to fit within your disability income, moving forward. Otherwise, expect the future to look a lot like the present.

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About 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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