I think they are straight up. The confusion is probably my fault. I literally just started the program. The first payment was debited from my acct three days ago. The original creditors denied the program and are forwarding the payment to whoever they sold the debt to. These are the schmucks who told me they “have specific instructions from the creditor to not work with any debt management company” . The debt management company is called CareOne. I owe $10k to Chase and $11k to Citi. They are not likely to just let the debt disappear. But now that the debt has been sold to some other people I really don’t know what I am dealing with.
I will try getting them to contact me in writing only. I am afraid of working out any kind of reduced repayment amount because I don’t want to owe taxes to the IRS. In my opinion that is just moving the debt around and the IT’S wants all their money right away. Working out a payment plan with them is just not something I feel like thinking about.
Can you pay them off right away? No. So they aren’t getting their money right away no matter what they want.
So you must do something else. Trust me, I’ve been there and it sucks, but the sooner you get the monkey off of your back, the sooner that shitty feeling leaves..
I’m confused as to why they took a payment before they had the program set with your creditors, but I can’t quite remember the order of things when I started. Weird. I do remember being told that any collection calls from the creditors should stop once the plans were set up and if they did call me to refer them to the management people.
And it is a truly shitty feeling. I’m not an expert of any sort on what your options are, I didn’t get to the point where the CC company sent me to collections, but I do remember the feeling of relief once I had a plan in place. Whatever you’re going to do, I’d make a decision as soon as is reasonably possible.
Oh really? Well that is a welcome bit of news. So like, the fact that I rent my apt, own two crappy cars worth maybe $2500 total, and have no money in the bank is actually going to work to my advantage? i’ll have to talk to my tax preparer person and see how this all works out come tax time.
They are certainly willing to work out a payment plan - as many horror stories as you hear, if you’re trying to work something out and try to keep up with the agreed-upon plan, they really don’t want to seize assets etc.
Plus, if you do have to take a forgiven debt as income, the taxes on same are likely to be a lot less than the forgiven amount. If you’re in a tough spot financially, I’d bet your income is not in a high tax bracket anyway, so you might only owe, say, 15ish percent of the forgiven amount. If the creditor writes off 5,000 that makes your tax bill 1,500 - so you’re still 3,500 to the good.
Is your credit counseling agency a member of the National Foundation for Credit Counseling? The best way to find a credit counseling agency is to call the NFCC and they will refer you to one in your area. I’m assuming what your are talking about is a DMP(debt management plan). I am currently with MMI.
Reputable credit counseling agencies will have a financial counselor available for you to sit down with(free if charge), or at least have a session over the phone. If your company doesn’t have this available, you can call a NFCC member and sit down with one anyway(free of charge of course).
You should not be paying more that $30-40/ month for a service fee.
I know many times a CC agency can’t do anything if the debt has been sold to a third party. You might be on your own.
I wouldn’t make a payment to a collection agency unless it was part of a plan to settle the debt. Some people advise paying only with money orders so you don’t give them access to you bank info. They can be shady sometimes.
It is just silly to refuse a settlement offer because you don’t want to pay the taxes. If you owe 10K and settle for 5K, you just increased your income by at least 5K(plus more because you no longer need to pay interest on it)and will have to pay taxes based on an increased income of 5K. If you were offered a 5K raise at work would you refuse it to avoid taxes? I wouldn’t think so.
Oh yeah. Always be polite with everyone, even when they are rude. Firm, but polite. Ask them how their day is. Most collectors get yelled at all day by customers. Talking to you will be a relief.
Looks like CareOne is not an NFCC member and is a for profit company. It’s pretty huge so its probably alright. You’ll probably just pay slightly higher fees.
Some of the things I see when I search for Care One are pretty scary. I would suggest you watch them LIKE A HAWK to make sure they are making payments as agreed and that your debts are genuinely getting reduced. I don’t entirely understand what they do for that fee. A lot of the stories online state that the people wound up with trashed credit, owing more than when they started.
What are your expectations regarding their services? Have they promised to get your interest rates reduced? Have they guaranteed anything?
Personally, if you can at all manage it, keep making your minimum payments to the original creditors (or the collections companies) until you have proof (from the creditors or whomever they sold the debt to).
You really need to find out who currently owns the debt - the credit card companies or the collections companies. Insist on written documentation from the credit card companies that they have sold the debt, if indeed they have.
Just from personal experience - Back when I was having some financial issues and declared bankruptcy a debt collector called my wife, yelled at her and told her she was responsible for one of my debts (She wasn’t). I called him back, told him the call was being recorded, then we had about a 20 min argument about how he wouldn’t talk to me while I was recording the call :rolleyes: . I told him to only correspond in writing and we would have our lawyer review anything he sent, never heard from him again
