Free in Five

SS MAYFLOAT · Mar 9, 2006

This credit card counseling service has been adevertising a lot on TV in my area. Wife called them and it seems like a wise decesion on our part. 4 years 4 months and they claim to have our debt cleared with saving us 36,000 in intrest. The savings is more than the debt.

I get a bit skeptic on some of these businesses. Has anyone here used them, or know anything about them? Good or Bad? Haven't signed anything yet. Just wanted to get some input from here. Thanks........SS BTW, it seems that the intrest rates took a hike since the double payment thing. Makes since that when a solution is made, it is taken away by the CC system. Loan Shark Larry on the corner maybe cheaper anymore to deal with.

Kenneth Brown · Mar 9, 2006

Re: Free in Five

Generally the "services" will reflect poorly on your credit rating. They will also limit how much credit you can get while using their "services" How can the savings be more than the debt? Sounds like they are counting on you paying interest only right now to figure savings like that.

PW2 · Mar 9, 2006

Re: Free in Five

I've had a ton of phone calls recently claiming they can magically save a ton of money on outstanding balances and interest rates and such, and I called one on a lark. They reqired me to give my card numbers to them over the phone which I refused to do. I have no idea if they were legit or not, but they scared me. I think the non-profit ones that (like Credit Counselling Service) may be ok, but it is wise to check with the BBB I think. I get offers all the time in the mail from my existing cards, and I've played a bit of musical chairs with transfering balances, and got a really low rate ( 0 to 3.9 %) on the outstanding balances--A little warning--you've got to put the card away when you do that and not use them as new charges are at a higher rate, and they only start getting paid off when all the old debt is gone... Not sure if that answers your question or not---good luck!

Ron G · Mar 9, 2006

Re: Free in Five

Never let someone else pay your bills,they will wipe out your credit.all these consolidation to save you money is a joke.you pay them and they dont pay your bills on time.pay the things yourself youll be better off in the long run.just my 2 cents.

ZooMbr · Mar 9, 2006

Re: Free in Five

Got to agree with PW2; Credit Counseling Service, they are non-profit (when I talked to them after my divorce) Their advise was good and the know what can be done. Many horror stories on the for profit outfits that take your money and run. Check BBB and make sure they have been in business for many years.

ndemge · Mar 9, 2006

Re: Free in Five

I used Debt Managment Credit Corp out of FL for about 3 years. I was in a pinch with too much on CC's, no equity on the house yet, and it was going to take about 10 years to get it all payed off at the current rate. They went to CC companies, got rates reduced, I pay them, they divy out to the CC companies. And they got $40 off the top every month. But it did get us above water, I got it down to a smaller amount and got a personal loan to pay the rest off and got off the program. BAD PART!----: It does go on your credit, and is as bad as a bankruptcy, BUT, only for 3 years. Credit card companies report every month, and it's a rolling 3 year stint on the record, so won't be visible after a few years. It was worth it on my part. If you can't figure out ANY other way to get that debt gone, Debt Managemnet does help get it managable. Keep a card you've had for a long time and don't put that one on the program and pay it off as soon as you can, cause the flip side of the program, the cards are closed once you sign up, and you will want at least one account open after it's all done to show you do at least HAVE some credit.

SS MAYFLOAT · Mar 9, 2006

Re: Free in Five

I checked with the BBB and they are listed as a member. There is nothing else in the BBB that has any more info on that particular business. I'm just a bit peeved because I told my wife about the non-profit one and then she did the opposite and called the Free in Five place. Of course she sent a deposit which is none refundable. Wasn't much, but still they haven't done anything for us. So why should they keep the deposit? Lesson learned again the hard way. Imagine how the economy would be if all these intrest grabbing leaches wouldn't be so money hungry. Sad and bad for the economy IMO.

WillyBWright · Mar 9, 2006

Re: Free in Five

You have to be careful. Credit Card companies have divisions that offer this stuff. They're just removed enough to make you think they're legit, but it's another way for them to get your money. There are not-for-profit organizations (funds are limited, ergo limited advertising budget), and for-profit organizations (heavily advertised) that will cost you more. dot org good, dot com bad, dot gov ??? Our state head for consumer protection singled-out one in particular. Christian Credit Counseling Service. They are Not religiously affiliated and they Are a for-profit organization. Their advertising is not generally deceptive, but they Don't say a lot of things.

Their inits CCCS are intentionally chosen to make people think they are dealing with Consumer Credit Counseling Service which is the industry-standard not-for-profit CCCS. But even with them, you do get a better deal than if you maintain several debts. They make their money by consolidating and getting the interest of all of the debts combined, although at a fairly low rate. It beats defaults which are common once things get to that point. You can do better with not-for-profits.

Bob_VT · Mar 9, 2006

Re: Free in Five

Go to your hometown bank or credit union. Sit and talk with them. There may be a safer way to consolidate your funds. No 3rd party fees no bad credit report.

MudIsFun · Mar 9, 2006

Re: Free in Five

As someone in the mortgage business this is how the lenders look at CCC... It is a chapter 13 BK. It is correct that the accounts they are managing will show on the credit report as manages by CCC and you will need to be completely out of the program for 2 years before most lenders will want to touch you again. It can be a great program for people but the obvious question is this: Have you picked up the phone and called your creditors directly? Many will work out re-payment arraingements with you directly and although it will show as a settled account, you will not have the stigma of the CCC on your credit report. My .02 Kevin

deputydawg · Mar 9, 2006

Re: Free in Five

Years back my brother in law went with one a non profit credit counselor. They had his 30,000 credit card debt down in 3 years. All they did was contact his creditors and make settlements. Then he paid them one payment and they sent the money out from there. His situation it did not go on his credit report. The credit cards did report the cards as canceled by creditor which is bad, but he was ablt to run up another 35,000 in credit card debts within a few years.

ob · Mar 9, 2006

Re: Free in Five

Lots of shady companies are or have been listed with the local BBB.If your really concerned ,contact the Federal Trade Commission.That is if you have patience getting communication feedback.

SS MAYFLOAT · Mar 9, 2006

Re: Free in Five

I thank you for your ideas and advice. As it stands right now, about 35% of our income dropped when my wife went to part time. Was late by a couple of days so the intrest went from 18% to 31%. With intrest like that plus the mandatory doubling up on payments, we just cannot afford to keep it up. It is either bankruptcy or the CCC. The new bankruptcy laws to my knowledge and research tells me that in order to file bankruptcy, one must go through the couseling. At this point we have no credit. We are over extended now due to the loss of income. Wife left me the other night thinking I would be mad at her for mishandling of the bills. Got her convinced that she is more important to me than money. She is so rattled over this mess that it is affecting her school grades. I feel that right now, our best hope to see any light ahead will be going with the CCC. The Free in Five has not been around much plus when I did a google on it, one thing did pop up that was negative about there ethics. Leary of them to begin with and the .com & .org makes lots of sense. Now the Mrs is upset because of the $50 deposit she sent out. I told her not to worry because $50 is just a drop in the bucket compared to the excessive intrest we give to the CC's. Future credit is not a concern to us right now. Later on after she finishes school, we should be able to pay cash for everything. Saving to buy what we want will be better than paying intrest to have it now. Patience is going to be a key factor in the future for us. She is going to get an appointment at the CCC today. There is one in our town which will make it more personal for us than one out of state. Thanks again.................SS

Tyme2fish · Mar 10, 2006

Re: Free in Five

Question?? How the heck do y'all get into these situations of large debt? I've taught me children that a credit card is just a convenient way to pay for something when you don't have the cash on you. Pay the balance due on the statement or don't buy what you "thaught" you needed. Transmission goes out and you don't have the bucks?? Walk for a month.I know that sounds harsh, but credit card companines make it too easy to get in over your head.

Drowned Rat · Mar 10, 2006

Re: Free in Five

SS. The fact that you are using a couseling company does not show up on your credit, however the result of their negotiations do. For example. They require you to close all your accounts, even though you still hold a balance, and this will show on your credit. Be very careful about having them negotiate a "write off" where you agree to settle the account by paying less than you owe. This will show up on your credit report as an unpaid debt for 7 years the same as a bankruptcy. Not only that, but you are resposible to pay taxes on the entire amount they write off like it was income. If they write off $10,000, you now get to add that to your taxable income next year. Now you're indebted to the IRS instead of the credit company. The IRS has much bigger teeth. CCCS is generally a good company, but you really need to stay on top of their negotiations. They will not bend over backwards to help you out. It the credit card company balks at their offer, they usually just let it go and they usually won't even give the customer any details about why. They are there to help, but ultimately the responsibility for managing your accounts is still yours. Many people have the ill conceived notion that once you go and talk to these folks, it's out of your hands, but that is the furthest thing from the truth. I have to agree with those above that have suggested you try and handle this yourself. Cut up the cards if you haven't already. Start pouring every disposible cent you have into the cards starting with the highest interest rate card first. Do this before putting any money into savings. Call each credit company and try to negotiate a lower rate. Many won't if you have had late payments or outstanding balances, but they usually will if you can make 3 consecutive payments on time. Tell them your situation and ask to have any back penalties removed so you can get back on your feet. Ask to talk to a supervisor if the first person can't help you. If they can't help, wait a day and call back. If your income can support an equity loan, AND you can be sure you won't rack up any additonal debt, take out a loan on your house to pay off the cards. This is a little risky, but if you're sure you can stick to a budget it really makes sense. It will lower your overall payment, get the %#&@#*& credit card companies off your back, look better on your credit, give you a lower interest rate, and let you write off the interest on the loan! It's a no brainer, but you can't accrue any more credit card debt while you're doing it, because your house is at risk. Good luck man, really. You know you always have your friends at iboats for support.

Tyme2fish · Mar 10, 2006

Re: Free in Five

Drowned Rat. Some very excellent advice. I would've said that but I can' type a long reply as you did..... Poor typing skills

Fly Rod · Mar 10, 2006

Re: Free in Five

Originally posted by Ron G: Never let someone else pay your bills,they will wipe out your credit.all these consolidation to save you money is a joke.you pay them and they dont pay your bills on time.pay the things yourself youll be better off in the long run.just my 2 cents.

What Ron G said!!! And when buying a house your bankruptcy stays with you, it just doesn't go away after 7 years!!!

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