Anybody have any experience with Consumer Credit Counseling Services (CCCS)? Are they legit? Was it an effective/useful way of getting out of a debt hole?
I think it depends on what type you go to. From what I’ve heard, if you go to someone who will get your debt reduced, so your creditors only get a percentage of what you owe, that it will be bad for your credit rating.
Be very careful which company you choose. Some of them are a complete and utter rip-off / scam.
My hubby and I found a not-for-profit agency here in town and have been very happy (his total debt was ~$7000 to begin with). For us, it made more sense to only have his name on the paperwork, in case we needed to use a charge card in the future (like for my $1,000.00 worth of car repairs in one month!). The intial appointment was about 90 minutes and we were enrolled on the spot (first payment came out ~6 weeks later).
They reduced his payments, interest rates, and got over-the-limit fees eliminated - it’s now a manageable $219 per month (~$20 is their monthly fee)with a term of 44 months (he’ll be done next summer). They do not claim to make your credit rating better, just get your debts paid off. His debt wasn’t reduced at all, either. He cannot incur any non-essential debts (credit cards = bad; mortgage = OK) while on the program.
We initially looked at AmeriDebt (which no longer exists!), but his mom found out that they were being sued for non-payment and totally screwing people over. You might want to check out this website (from the State of California).
Best of luck!
I agree with the previous poster. You need to be VERY careful with those agencies. I made the mistake of enrolling with one that asked for an enrollment fee of $300. In the process of trying to get me set up, they managed to let one of the accounts slip into collections. :smack: Needless to say, I dropped them IMMEDIATELY. Yet I was out my “non-refundable” enrollment fee. Bastards.
However, I found a better agnecy that is very easy to work with. They had me up and running in about 2 weeks, and that was over a year ago. I have a very manageable payment with them, and 2 of my smaller accounts are already paid off. I have no regrets–it takes a load off your mind when someone else is handling paying your bills FOR you. 
Even with a legitimate, not-for-profit agency, I’m not sure I see the upside. Four or five years with no credit, and your credit rating is damaged anyway…how is this better than filing bankruptcy?
Ardred just filed for bankruptcy (chapter 7, I think).
It’s been remarkably easy. Got a good lawyer who’s been doing it for 25 years, paid him a retainer and got on a payment plan for his fee (which was less than $1000). Has his final meeting of creditors tomorrow. He keeps his car and his other items. He pays off his car every month and has no problems. He still has his school debt, you can’t get out of that. After 7 years, his record is clean.
We looked into credit counseling, and everything seemed like a scam.
Bankruptcy is worse because you can’t get a mortgage or a car loan, or pretty much any credit extended to you for 7-10 years, depending on how you file.
IMHO CCCS are not much better. I’m told they’re not supposed to damage your credit report, but I don’t buy it. If I were a lender and I saw that on your credit report, I would assume that you are not bright enough to handle getting out of your own debt and I would not extend any more credit to you. Period.
You do not have to pay anyone for these services. You can do all of this by yourself. I was $10K in credit card debt and got myself out in about 4.5 years. I had three major credit cards and transferred balances until I got my interest rates reduced to a reasonable amount. I took a second loan on my car and paid off one of the larger balances. I went to the Motley Fools web site and read their 9 ways to getting out of debt for free and followed their advice to the letter.
One year later after I became debt free completely, I had sufficient money saved up for a downpayment on a house. My credit rating is pristine. You can do this on your own. You are smart enough, patient enough and able to do your own homework/research to figure out how. You have the time because you cannot afford to carry mountains of bad debt around indefinitely. It may be one of the most important things you attempt.
Please go to the Motley Fools web site and read up on how to do this.
Another good alternative is to read and follow the advice given in Financial Peace by Dave Ramsey. It’ll show you how to work the debt down yourself, making you debt-free and in control of your finances.
StG
Well, if you already are in a house & paying a mortgage a bankruptcy won’t (normally) make you homeless–the loan will actually come in handy when rebuilding credit. And you can always find someone to give you a car loan if you really REALLY want to waste your hard earned bread on a new car. 
I’m lacking evidence to support this assertion, but my bets are on the CCCs being sponsored by the banks themselves: the longer they can get you to give them the money the better, even if it means reversing late charges & over limit fees–which you never benefitted from in the first place. There are things you can do to clean up a credit report following a bankruptcy–sometimes even erase it (if you’re lucky).
Bankruptcy is every bit as legal as usurous interest rates, handing out high-limit credit cards to people who can’t afford them and late/over limit fees. The banks are NOT your friends any more than the heroin pusher on the corner, and they are NOT doing you any favors for free. Just keep that in mind when wrestling with any “moral” questions you have about not paying back a debt.