Debt Consolidation...?
Does anyone have any advice on debt consolidation? I want to learn everything I can about it before I take the leap to do it, what are the best companies, pros and cons...stuff like that. I haven%26#039;t been able to work for the past few months because I moved to Virginia with my fiance and with me having a 3 year old with no one to help care for her, it%26#039;s been really hard. She starts head start on the 3rd of September, however, it seems as if my bill collectors are gonna drive me crazy before then. I have been making payments, but last month I had to start making lower payments and half payments. Well that is not good enough for Wells Fargo. I just need some advice on this subject. Thanks to all, and have a great day!
Best of luck to you.
Debt consolidation is the worst thing you can do. The companies are scams. They send cease and desist letters to your creditors and you make monthly payments to the consolidator. When they have enough they will start making settlement offers to your creditors. What they don%26#039;t tell you, is that your accounts go more and more delinquent, charge off and get reported on your credit report. You have no knowledge of this because you have given power of attorney to them. Alot of creditors will no longer work with them. They take a percentage of your monthly payments to them and that goes in their pocket and then they offer 30-35% settlements to your creditors. They also don%26#039;t tell you that in doing settlements that you are also going to have to pay taxes on the amount written off. With each creditor they settle with, anything over $599 of the amount not paid, is reported to the IRS--internal revenue considers this income, they send you a 1099--you pay taxes. It is better for you to contact your creditors and make payment arrangements with them. In most cases they will lower the payment, interest and stop late charges. Explain the situation to them, most can get you on a temporary hardship program. Good Luck! ***
Collections mgr--20 yrs
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