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Help, credit experts! What to do with this case history?
The person who came to me for help: $ 40K income, healthy, in U.S. debt $ 140K (yes, one hundred forty thousand dollars) ($ 60K in student loans patience, loan of U.S. $ 7K car, the rest of the unsecured debt: $ 50K is maxed out Credit Cards, especially in the 30 +% default rate and the rest is loans from friends. About $ 1 K of the tax.). Some debts are newborn (30-60 days) in arrears, but none has gone to collections yet. Previous N BK, charge-offs, collections or judgments. All three reports credit are not serious errors, FICO scores unknown. The person is motivated, and showed me the recent credit reports and invoices, cut the cards credit, developed a detailed list of assets (Car + $ 3K in illiquid assets in cash + $ 1K), liabilities, and is writing a monthly budget. What you advise? Is Consumer Credit Counseling Service Debt Management Programme the best solution? What are their successes or failures, with the CCCS DMP? The costs and benefits? Please answer the questions I asked. Thank you.
I've never had a client who successfully complete a program of consolidation debt. I've seen these companies take money from people, not to negotiate debts for them, and generally ignore the consumer when they become uncollectible defendant. These programs debt management are the same thing as filing a Chapter 13 bankruptcy, except for bankruptcy that have laws protecting creditors against you and you can be sure not to pull their money. You have no protection when it comes to debt consolidation companies. It is an enormous risk. Since this person has a regular income, he / she is a good candidate for Chapter 13 bankruptcy. After 3-5 years do not contribute to the Chapter 13 plan, the unsecured debt without pay will be legally discharged. There will be tougher on their credit reports and results for the negotiation of the debt through a relief agency debt.
T549 – Seg 3 – Consumer Corner
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