I hear that debt settlement companies are rip offs.

Yes, you can get help there

Good luck !

talked to a company that "helps" with debt, decided on negotiation which means that I pay into an account with the company and they wait until my creditors have gotten to the point that they are willing to negotiate to settle the debts to pay them off. so all of the credit cards will basically go to collections and this is all going to be done over a period of 3 years so it is going to trash my credit. should I just file bankruptcy and move on? which is worse?

Either way your credit is going to be trashed. In order of magnitude I would say bankruptcy is worse and to file for bankruptcy has become more difficult for consumers.

Make sure you have a good debt counselor.

Good luck.

Last may we decided to consolidate our debt and made payments to a debt relief company who would begin negotiations as soon as we paid the finance charges. Never got that far b/c our state passed law that said they could not do business with us, we got refunded. In the meantime we have been turned over to collection agencies, should I negotiate with them on my own?

As executor of an estate, one of my jobs was to negotiate with collection agencies. I found that when I dealt with them directly, they were willing to accept 75 to 80%. Debt consolidation and management services can usually do much better on your behalf because they have relationships with collection agencies – sometimes your debts can be reduced to 25% of the original amount.

Check out: http://www.mortgageous.com/debt-consolidation

If I remember correctly, they also have an option for a free consultation to help protect and/or improve your credit.

Good luck, and don't back down! Collectors have been known to use predatory techniques to intimidate you, but if you stand firm, you'll come out ahead.

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WORKS???

since you are about to loose your job, I can only assume that you are going to be laid off. Why not contact your local unemployment office and see what is needed to apply for benefits. If you fill out the vital stuff you will know exactly when you can fill it out so that there is not much gap in income while you are between jobs.

Also, why not try to enroll in the credit card protection programs where you are covered if you loose your job.

Since you are working now is there any way you can apply for a new card where you can transfer your balance so that you can get zero interest while you are searching for new employment.

Sorry to hear that your job is ending but remember, when one door closes, another one opens

I’m so worried about getting screwed by an incompetent company. Also, I checked with Debtmerica and they’re trying to charge me a 15% fee to do the debt negotiation. I’ve checked with a few other places too and somebody recommended going with an attorney-based debt settlement company to get better results. Any help would be appreciated.

I’ve recently looked up some debt settlement companies for my sister so let me give you a little info:
1) Always ask if the company is a member of TASC (The association of Settlement Companies) They are the Better Business Bureau of Settlement companies and make sure these companies are operating within compliance regulations.
2) Always ask how much it costs. Usually there’s a setup fee, a servicing fee, and a negotiation fee. The setup fee will usually range from $100-$200. The servicing fee can go anywhere from $70-$10/month. The negotiation fee ranges from 8%-15%.
3) It would definitely behoove you to check out any attorney or attorney-based company to handle all your debt settlement as they are stricter on compliance guidelines.

Try going to: www.tascsite.org and looking up some companies.
A good blog I read: http://iclosem.wordpress.com has some great articles on debt settlement. I would definitely look into that.

I was listening to the Howard Stern show the other day and it looks like KC armstrong just signed up for debt settlement with this company called Envision Debt Solutions (www.envisiondebtsolutions.com). I ended up sending my sister there as they answered all my questions right. They have an 8% retainer fee (since they’re an attorney based company) and all the contracts you sign are with the attorneys. They were actually very courteous and professional and guided my sister through the whole process. Give them a call at: 800-515-9603

I understand this will have an impact on my credit score, but from what those companies tell me, they are able to reduce outstanding credit card debts by 40%+. Is this true or too good to be true?

It depends on the agency you use, and how dedicated you are to using it.

My father used an agency before he died several months ago. It was difficult for him to live on what was left (because he was old and ill and had high medicine expenses) but that was what he got into. However, what his company did is they did an autowithdrawl monthly after his Soc Sec. payment came in, taking out his monthly amount. Then 5 days later they paid the creditors. An agreement was made with most creditors to reduce the interest and avoid any late payment charges as long as the payment was made regularly and on time.

This did help him reduce his debt.

But it doesn't work for some people. Most people get caught up in the credit. They get the calls to stop, then they want something that they dont have and they start up a new credit card or overdraw or something like that. Then you are back where you started, but now you owe money to the debt negotiation company.

If you really want to do this, and are willing to do it right — you may be able to do it yourself. Most banks have an online banking feature these days that lets you create regular online payments. You can determine exactly what you can pay each month to each creditor. Then contact the creditor. Come clean and let them know that you are trying to work things out and you will not 1. charge up any new debt until all debts are paid. and 2. pay regularly and on time each month — if you can get the interest reduced on the charge. Explain that you are using an automatic withdrawl and so the payment should come at the same time each month.

Many of these companies will work with you as much as they would with a negotiation company. Their workload is reduced because they can stop collection calls, and all they have to do is verify that your payment is received.

However, you have to be really good about making those payments ON TIME EVERY MONTH — don't skip because you needed a couple days off of work to help a friend — this is your life and your money you are dealing with.

Good Luck!