| |
Debt Counseling |
|
|
|
|
Back in 2001 or so,
I had a terribly large amount of credit card
debt that I was having trouble paying. I had
amassed the debt on several credit cards as the
result of a failed business venture. The
business never made any money and was eventually
dissolved. I tried for a long time to pay off
the debt, but my payments were mainly against
the interest that accrued each month and very
little towards the principal.
After a long time of
paying and paying and paying and not seeing the principal being
reduced hardly at all, I eventually gave up. I became so
depressed about my situation that I just quit making my payments
on all of the credit cards involved. There were probably about
five different cards that were all maxed out. Soon after I quit
making payments, the telephone calls started coming in. Of
course, I ignored the telephone calls by the credit card
companies as much as I could; but then the calls started from
debt collectors instead of the credit card companies as the
credit card companies had turned the collections over to outside
companies that do nothing but collect on bad debts - and these
guys were relentless. It was a very depressing time for me.
Eventually, I turned to a
debt counseling service. It was some company in New Jersey. I
forget the name or how I even found them. It was probably
through the Internet though.
This debt counseling
service took over payments on my credit cards. I paid the debt
counseling service each month a single payment. The debt
counseling service then made payments to each of the credit
cards that I owed money. Still, I made very little progress in
paying off the debts. Plus, the debt counseling service had me
paying them a voluntary contribution each month - legally, I do
not think they were allowed to charge for their service so they
took voluntary contributions instead. To my recollection, they
made a good bit of money off of me through my voluntary
contributions. I suppose I could have said no to the
contribution, but I never tested that. I just paid the money.
The debt counseling
service did very little to help reduce my debt. They may have
gotten the interest rates reduced a little, but none of the
principal on any of the credit cards was reduced. What they did
do, though, was get the credit cards companies and the
collection companies from calling me and writing me letters and
hounding me. That was well worth the voluntary contribution that
I made each month.
While the debt counseling
service did their job and I made my monthly payments to them, I
went on working and earning money and avoided bankruptcy and
garnishment. The extra time allowed me to come up with a way to
payoff the entire credit card debt on all of those cards. That
is another story though, but the point is though that the credit
counseling service bought me time which is what I needed.
Without their service, I may have been forced into bankruptcy or
wage garnishment or something.
If you are in an similar
situation with your debts, seriously consider some sort of debt
counseling service if you are unable to handle negotiations with
your creditors yourself. A word of warning though - make sure
that whatever company that you decide to use is a reputable
company and is not out to take advantage of people in poor
financial situations. |
|
|
|
|
|
 |
|
|
