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Advise on Debt Relief

Posted by on Jul. 27, 2013 at 12:41 PM
  • 6 Replies

Hello, ladies.  I have a few questions on debt relief programs.  This may be kind of lengthy.  My husband has a few charge cards in his name only.  We've been together for several years, but got married December 2012.  Back in June he had another knee surgery.  He was injured at work in August and had double menicus surgery in November.  Then he had cartilage (sp) replacement surgery on his right knee in June.  He's drawing workers comp through his employer, but it only pays a fraction of what he made.  So, money has been tight.  But we're getting by and not struggling.  Thank goodness.  Well, a couple of weeks ago we get a letter in the mail for some kind of debt relief.  I think it was from Freedom Financial.  He calls them, they work out a payment plan, and withdrew their first payment from our checking account on July 25.  Now the debt collectors are calling us and my husband is wondering if he did the right thing.  He's been feeling guilty ever since he filed with the debt relief program.  Come to find out, the debt relief company lets the debt collectors keep calling until the collectors are ready to negociate a payout.  My questions is, should he had called the creditors first and worked something out before using a debt relief program?  Has anyone else used a debt relief program?  What kind of experience did you have?  Has anyone every worked out a plan with their creditors before?  Please give us some advise or anything info you can supply us with.  My husband is a nervous wreck.  Thanks, ladies. 

by on Jul. 27, 2013 at 12:41 PM
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by Jocelynn on Jul. 27, 2013 at 12:49 PM

I have no idea, I have never heard of this, maybe call a lawyer and have a free first visit and see what they would advise...I am sorry for all your trouble.

by on Jul. 28, 2013 at 7:51 PM

I would try to work out something with your creditors before dealing with this kind of company.  I have heard that they often are crooked and will just take your money and not even pay your debtors.  Now that they have your information though, I am not sure what you can do.

You might be forced, if you decide not to work with them, to close your bank account and open a new one.  That way they won't have access to your funds.  Just something that I have heard.......I have not personally dealt with this company or others like them.

by on Jul. 29, 2013 at 12:27 PM

I think all that matters now is: 1) Making sure that Freedom Financial no longer has access to your checking account as the service they provide obviously isn't what you were expecting.  2) Call your creditors yourself and tell them you want to settle your account.  Determine how much you have to clear the debt and make them an offer.  Try to explain to them that it is in their best interests to settle with you now.  Note: You will need to report any discount of your account balance as income when you file your 2013 return.  3) Learn to avoid credit and start paying with cash for everything. As you are experiencing, things happen unexpectedly that interfere with our ability to earn money.  It's a lot more fun to have piles of cash to get us over rough patches than debt compounding our problems.

by Member on Jul. 31, 2013 at 10:32 AM
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Often that's what these companies do, sorry to say.

Debt companies won't usually negotiate with you until you are 3 or more months behind on your payments. So when you reach that point, the Debt relief compnay will go in and negotiate a cheaper payoff for you and set up your payments. They either take an up front fee for the service or tack on a fee to every payment... or both.

Trick is... you could do that for yourself if you're already behind. 

So your options are...
1 Keep with the debt relief company and wait for it to play out. Get Caller ID, and don't answer the phone unless you know the caller, or tell everyone you know you are using an answering machine to screen calls so if they leave a message you will pick up.

2. Cut your losses with the company and proceed to negotiate with the collectors on your own. 

A book called "The Total Money Makeover" would be worth reading, it talks about all of the debt process including collectors and how to stop getting more in debt. A lot of libraries have a copy.

by New Member on Aug. 1, 2013 at 12:36 PM

Hi Teaty,

I've gone through this before. Based on my own experience, I have some good news and some bad news.

First the bad news. Debt relief programs aren't good for your credit. The good news is that there are non-profit programs out there, perhaps near you, that are backed by the Better Business Bureau. They are not "debt relief" but rather "credit counseling" programs. They don't make the creditors break down to negotiate, but rather they call your creditors directly and work out a plan. Because they're legit, the creditors don't have a problem working with them.

The credit counseling program that I have worked with and would recommend to my best friends and family is called Consumer Credit of Des Moines. Also, check the yellow pages or online for BBB backed credit counseling groups.

Best of luck to you and your husband.

by on Aug. 1, 2013 at 3:51 PM

Thank you ladies.  I appreciate all the input.  Have a good day.

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