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Norris Randall
05-30-2007, 6:04 AM
Good Morning Everyone,
Thanks in advance for all comments suggestions.......

I have a niece that has never been able to manage her finances.

She has called again asking for help. (more money)

My question---- What experience have you had or what do you know about any of these "Debt Relief" companies.

I've read several warnings and realize there companies that are ready to give "relief" but all they do is realive one of their money.l

Do you know of any reliable place to send her that is on the UP & UP?

Thank$ , Norris

mark page
05-30-2007, 6:17 AM
There should be a local Consumer Credit Counciling service. I do not know if it is totally free. Maybe a small surcharge. But they will contact all of her outstanding debts and set up a payment schedule. I believe she pays them and they pay the bills. They should set it up after going over all her finances and she makes one payment to them a month, week, etc and the payment will stay this amount till everything's paid off. I have known several workers that have used this service and it helps with their credit reports too. The system may have changed some since it's been 20 years or so since one of my previous workers used them.

Tim Brooks
05-30-2007, 7:13 AM
Stay away from the companies that pay the bills for you! They are a farce and will take the individual for a ride they didn't bargain for! Unfortunately, there is no easy way to change something that has taken time to create. Like anything in life that is worthwhile, it will take some work and sacrifice on her part if she wants to do it right. First, the young lady must change her habits before anything can change. Cut up the credit cards and vow to NEVER use them again. Does your niece have a job right now?

John W. Willis
05-30-2007, 8:00 AM
I unfortunately had to use a service that I didn't even know existed that is similar to what you are looking for. After working for 34 years I found myself disabled. I used every means possible to keep up my payments until I could make it through the whole disability process. I had a credit card that I had for about 21 years with never a late payment. It came down to the end of the process and I couldn't make the payment BUT I had already gotten my disability approved. The credit card company were real *&%$#*&%'s. My lawyer told me that I ought to negotiate with them for a lesser amount pay off, which I didn't know existed.

I started searching and found this company http://www.hoffmanbrinker.com/. (http://www.hoffmanbrinker.com/)They negotiated a settlement and saved me a lot of money. Mark Brinker is an outstanding guy.

I'm not sure this is anything close to what you need but it might be a consideration.

Martin Shupe
05-30-2007, 8:40 AM
Tell her to google Dave Ramsey and follow his instructions. She needs to dig her way out of her own mess.

Joe Chritz
05-30-2007, 9:04 AM
Check your local area for credit services as suggested. Ask for references and check up on them.

I have know people who have used them and have been very happy. At least one has no charge unless the person opts to pay them. Even then it is a small amount. The savings in interest could be very large indeed.

Obviously not getting there in the first place is the best but it is possible to fix. It still might take 3-5 years but it is possible.

Joe

Cliff Rohrabacher
05-30-2007, 9:08 AM
I sent you a PM Norris.
If you have more questions feel free to contact me.

Russ Filtz
05-30-2007, 9:12 AM
I would triple check before doing any of these routes. Many times doing the negotiated settlements hurts your credit as much as a bankruptcy does, AND costs you money to boot. If it's that bad, I would seriously consider Chapter 7. I had to do that after an unemployment period and was able to keep the house, a few cards, and cars, etc. It's a little tough to find banking, credit afterwards, but not impossible, and as stated probably the same as if you do a repayment plan.

Tim Brooks
05-30-2007, 10:45 AM
Tell her to google Dave Ramsey and follow his instructions. She needs to dig her way out of her own mess.

This is where I was going with my suggestions but I was going to walk you through the steps myself. Dave Ramsey's plan will show her how to walk her way out of this mess and how to keep from getting back in it. By far, her best solution.

Here is a link to his website. http://www.daveramsey.com/ I hope it is okay to put this link here. I am in no way affiliated with Dave Ramsey or his organization.

Jeff Kerr
05-30-2007, 12:56 PM
I too recommend Dave Ramsey. There are local classes taught thru churches in most every town. You can find one near you if you go to Dave site and put in your zip code. If not, there is a DIY kit.

It is very cheap. (around $100). It takes 13 weeks to go thru the classes. You learn a lot. But it takes a change in heart to get it.

I teach the class for my Church and can tell you first hand that the system works. For myself I was able to pay off over $90k in debt in 3 years. I am now debt free except for my house and I don't own or use credit cards. If I can't pay cash I cannot afford it. It is that simple.

Many of the counseling services and such really hurt you. You might as well file for bankruptcy after what they do to your score.

Give Dave Ramsey a shot. It is by far the best option and very simple process to follow. Turning control of her finances over to someone else doesn't solve the problem. It allows her to continue to avoid maturing into an individual that underestands and controls money.

If you would like to know more, shoot me a note. I would be glad to help.

Lee Schierer
05-30-2007, 1:09 PM
Back when I was on active duty, I helped a young seaman that got in over his head with debt. We worked with a credit union to get a bill consolidation loan that lowered his monthly payments (mostly through reduced interest rates) to a level that left him enough money to live on. Unfortunately once he had money in his pocket, he promptly went out and bought something else and got into trouble again. Since this young man was a radioman and had access to classified materials, it ultimately cost him his job as he became an unacceptable security risk due to his financial problems (lack of restraint).

Work with one or more of your local banks and see what they can do. However, you have to break the spending habit pattern or it won't work. There is no free lunch here. Most places will be happy if they get at least the interest payments each month and maybe a little toward the principle.

Dennis Peacock
05-30-2007, 1:25 PM
Run from those companies and run very hard and fast.

Get the course by Dave Ramsey and also read the book called: "All Your Worth"

Jim Becker
05-30-2007, 3:51 PM
There is some good advice for your niece here so far. My advise to you is to point her toward the recommended resources and then let her deal with it. I also (effectively) loaned one niece some money for orthodontics and my parents did the same for another niece to guarantee a student loan. Neither has ever been repaid. Never again...advice is free, but outside of a "life or death" situation, I'm done with the money side of things.

Mark Rios
05-30-2007, 9:27 PM
Another vote for the Dave Ramsey approach. Stand up, do the right thing, work hard and pay your debts and then don't do the stupid things again that get us into financial trouble.

BTW, as a heads up, if a person has say $10,000 of debt and they negotiate a settlement of, let's say $6000, the person will have been relieved of $4000 of the debt. However, the person will be liable for the taxes on the amount of debt that was "forgiven" or not paid, in this case $4000. This is seen as income by the IRS. You will get a statement from the debtor/credit card company indicating the amount that was not paid off and a copy goes to the IRS (as well as your state tax board if your state has income tax also).

Russ Filtz
05-31-2007, 8:02 AM
You sure about the IRS, sounds like a scam to me by the service company. If true, then another reason not to go that route and proceed directly to Chapter 7. May be hard to swallow, but if you're in way over your head it may the best way out. If you have to ruin your credit you may as well do it right.

My bankruptcy was in 2001, I've had checking accounts, 9% interest rate credit cards, car/home loans the entire time since then, and my FICA scores are back in the upper 600's. There is life after bankruptcy, so don't rule it out. As I stated, those credit reduction services will ruin your credit rating as surely as a bankruptcy, so tread carefully.

Jim Becker
05-31-2007, 9:51 AM
Russ, the bankruptcy laws recently changed and it's a lot harder to do that now...

Russ Filtz
05-31-2007, 1:20 PM
Oh well, guess I got lucky! :D

I thought it was still doable, but you had to do debt counseling as well?

Rob Russell
05-31-2007, 1:41 PM
If I remember reading the news stories correctly, not all of the debt is erased by bankruptcy now.

Jim Becker
05-31-2007, 2:48 PM
Russ, you're correct.

http://www.uscourts.gov/bankruptcycourts.html

Dave Fifield
05-31-2007, 8:42 PM
Your "niece" huh? Yah, right..... c'mon, out with it, what tools did you buy Norris?

Russ Filtz
06-01-2007, 7:23 AM
It's not his fault, it's a disease called "toolum Multiplitis" ;)

Norris Randall
06-02-2007, 3:05 PM
Thanks to all you caring folks. I appreciate the INPUT.

Since it is really my wife's niece she has written and informed her we will not be providing any financial OUTPUT.

I printed several web site homepages and for the "uptheenth" time recommended that she seek some counciling and change her lifestyle.


Dave, you should know that anyone on this site would not have to think twice to decide between tools and inlaws.:D