did credit counseling, now what?

lilyaroseDecember 15, 2003

Hey there, I'm new around here. I've been very impressed with this community and all the knowledge you collectively have. I'd really appreciate commentary on my situation.

About two years ago, hubby went through a credit counseling group called "Christian Credit Counselors." They got his credit card rates and his monthly payments lowered significantly. His debt had been such that we would not have been able to pay it off during his lifetime at the rates we had. But now we expect to have it paid within about 2 more years. The CCC takes the monthly payments out of his checking account monthly and pays it for him. (Several times a year, we also send additional payments to them to pay extra on the cards with the highest interest)

I thought going through CCC was a great idea at the time. They told us that since his credit was pretty much shot from late payments, that this would increase his credit rating and, after it was all paid off, his credit would improve drastically.

After visiting this forum, I have read some folks advising against using CCC.

Can someone please comment on what specifically is not such a good idea about doing CCC, and what (since we already went through them) we can do to improve our situation?

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I want to know the answer to this too. If you get behind on your payments, your credit is already ruined. If you don't want to file bankruptcy, what can you do to dig out?

    Bookmark   December 15, 2003 at 1:58PM
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There really isn't anything horribly wrong with credit counselors, and they have probably helped many people. The only problem is that using them puts a pretty big dent in your credit rating, and a lot of people wind up filing bankruptcy anyhow. To a creditor, someone in credit counseling is in most ways a WORSE risk than someone who has just filed bankruptcy, because the bankruptcy option is still out there for you when you're in credit counseling. If you file bankruptcy, on the other hand, you can't do it again for six years.

Since you're already in credit counseling, the best thing to do at this point would be stick with it, continuing to make your scheduled payments, and keep your existing credit accounts open. The creditors may not cancel your accounts, as they often do in bankruptcy, since you are paying them off.

One option available to you if you don't want to file bankruptcy and want to avoid credit counseling is to contact creditors yourself. Many times you as an individual can work out agreements very similar to (or maybe even better than) a credit counseling service can do.

    Bookmark   December 17, 2003 at 4:33PM
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