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My True (Credit) Confession

October 20th, 2009 at 04:44 am

Remember those old 60's mags True Confessions, where readers would write in about things that they would never tell the neighbors? Well, I have skimmed thru several blogs lately where intelligent advisors have told people NOT to go thru a credit counseling service, they are not a good bargain. We dealt with a credit counseling service for several years, and they SAVED MY LIFE. Our youngest child spent almost 6 months in the hospital after she was born, and we were almost $100,000 in debt. We actually ended up at the credit counselors thru the hospital mediation service. There was NO WAY that we could make even the most minimum payment on a bill that large, so we went to mediation with the hospital. The final deal that we ended up with was that we would meet with the credit counseling service, they would set up a budget with us, and recommend to the mediator how much we could reasonably afford to pay. The bonus was that they also took charge of all of our other bills at the time, and that helped hugely by stopping any shutoffs or penalties for the first years that I had to stay home with an ill child. We stayed with them for 14 years, but after the first 2 or 3, I took back paying most things, all of our utilities, and the credit counseling service dealt with the hospital and the one credit card we had. I could have handled the credit card, but as long as they did it, the interest rate stayed at 0%. The fee was based on your income, for a long time it was $25 month, then the last few years it was $50 monthly, but I am sure that we saved that many times over. Our income flucuated monthly because of the work that my Hubby was doing, they renegotiated every month if necessary, and I didn't have to do a thing. I never felt that the payments we made were unreasonable. We actually ended up paying less than 1/4 of the total balance, and in the end the hospital was sold to another corporation, and forgave a lot of old outstanding debts,"as a service to the community" Any action that they took that would have showed on our credit report (they closed the cc acct)was done right at first, so by the time the 7 years were up, our credit report was clean and shiny, and those payments just showed up as billing payed on time. So, I can tell you from firsthand knowledge that I would recommend a reputable credit counseling service to anyone, THEY WORK.

7 Responses to “My True (Credit) Confession”

  1. north georgia gal Says:

    In your situation, yes they work. But it is not something to be done withouth much thought. I convinced my first husband to go to a credit counselor. They reduced our interest and made payment arrangements. It all sounded great. Except, being young and stupid, I didn't realize how it would hurt our credit. See we were struggling to pay the credit card each month, but we paid them. Even a little extra. I just saw this as a way to take some of the stress off of me each month. We were not in dire straits as you were. I do believe that credit counselors are a great thing for those that really need it. We didn't really need it and it really messed us up.

  2. creditcardfree Says:

    I'm glad you had a great experience. The non profit ones are the only ones I would consider if needed.

  3. Mooshocker Says:

    I love happy endings. God bless.

  4. LuxLiving Says:

    Thanks for sharing your story. In the right instances I think this works out well. There are just many debt consolidation companies out there nowdays that are not so reputable. Getting in with a good service could help many families in similar situations to yours.

  5. Joan.of.the.Arch Says:

    Yep, there are some scammy credit/debt counseling companies now! They are popping up like mushrooms after a rainstorm. I suspect it is the same people who just two years ago were leeches on the system working as mortgage brokers.

  6. girltherapy Says:

    This was a national 501C3 not for profit corporation, for credit COUNSELING, not credit CONSOLIDATION. In fact, they advised us against trying to make any kind of a payoff deal with the hospital, because of the way that this is dealt with in your credit report. We didn't even have to meet with a hospital rep every year, which was supposed to be part of the deal, the credit counselors just faxed copies of all of our financial reports to them, and we got a form letter saying that we were satisfying the agreement as presented. The only thing that I can think of that I didn't like about it, was that I had to make the payment by money order at first, so I had to go buy a money order. But after the first few years, they got set up for a direct debit from our bank account. This did make Hubby nervous, so we opened a no frills savings account, and put in just enough for the debit each week. I realize that there has been a boom of shady companies in the last few years, but do your homework, and if it sounds too good to be true, (you already know) It probably is!

  7. sarah Says:

    I worked with CCCS (a non profit agency) after I was widowed and they were extremely helpful. I would have lost the house had it not been for them.

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