How do things like Ameridebt work? They say they have an arrangement with businesses and creditors to lower your debts without a loan or bankruptcy. If they just say “Hey, cut this guy some slack,” what’s in it for the businesses?
You don’t need these companies and still get the same deal.
I guess most people don’t know, but you can haggle with your banks and restructure your debt.
I do believe you do have to show that you have a lot of debt or other circumstances that warrant this.
I have called up my bank, hospital, and other creditors and restructure my debt.
I guess the benefit of these type of companies is that they do it for you and maybe even consolidate the debts.
Okay, from the business stand point, you must be identified as a client who is having problems paying off debt. I do believe your credit report will reflect the restructure, but I am not sure.
You will find that most businesses when they have non-secured loans, they will settle with you. Cuz, if you declare bankruptcy, they get nada.
Places like Ameridebt will negotiate, on your behalf, with most or all of your unsecured creditors (no car loans, mortgages, etc.) As another poster pointed out, you could do much of this yourself and get similar results. If you have only one or two items, it is better to do it yourself. If you’ve much more, or don’t have the time / ability to haggle and bicker with the card agencies, you want to look into debt consolidation. You will probably end up with lower interest, waived over-limit fees, and a payment plan with which you can comply.
The debt consolidation firm will usually charge you for this service. Ameridebt, Neway and many of the spam emailers tend to have OUTRAGEOUS fees for performing this service, and are not recommended. One that I found and use, Springboard, ( http://www.credit.org ) has minimal fees. In addition to the fees that the Ameridebts and Neways of the world charge, they also get a ‘kickback’ from many of the card companies (who would rather see something paid than bankruptcy). I’m sure there are others like Springboard, with just small processing fees, as opposed to Ameridebt, which (a) has a larger processing fee, and (b) takes the first month’s payment for itself. [Probably why there are so many spam artists out there]
Your credit rating will get dinged. However, bankruptcy is a full head-on collision to your credit rating.
Good luck. I was there and it was not a pretty place.
You can also do this for secure loans, too!
It did not work for my vcr, but I was able get reduced payments for my house and car.