This is

The first time my ex-husband and I used a credit counseling service we were about $32,000 in debt with credit cards and interest rates rising of course, and monthly payments totalling about $800.  They advised us to close all cards except one and then they would negotiate a much lower interest rate, thus making our monthly payments much lower - I think around $250.00 total, which we sent to them and they distributed to our creditors.  And they did negotiate a much lower rate, in some cases 0%.  This way as long as you make those payments, your credit rating stays good.  They do get a portion of each payment though.  The thing about this is that you can easily do this yourself (if you have the nerve), as I later found out, and thus you wouldn't have to pay any extra to any credit counseling agency.  Anyway, this did work for us and we did pay it down a lot.

Unfortunately meanwhile we actually got more credit card offers and again we amassed about $40,000 in debt (mostly due to my husband's business losses) several years later.  This time we found a company who said they could help us settle the debt for 25-40% of what was due.  We would simply stop making any payments and put money aside.  Then when he had about 25-40% they would negotiate a settlement for us. They said it would three years before credit card companies would sue us.  Sounded great!  We did have to pay them an upfront fee though, about 15% of what we owed I think (with which we could probably have settled a card!).  Anyway we went with them.  Shortly after that I left and divorced my husband and we split up what we owed.  I had three cards to settle.  About a year later I did settle one for about 40%.  However, six months after that the other two sued me and wouldn't settle for anything (and I was close to settling another one).  They wouldn't take anything less than 80%, so I was pretty much back to where I started from.  I then went and saw a lawyer and he said I could easily go bankrupt (I didn't own anything).  So I did that and four months later I was debt-free.  Wish I had just gone bankrupt immediately after I got divorced!!

Now if I had to do all of this again, I would do it myself.  You don't really need anybody to negotiate for you.  You can stop payments on your credit cards and try to save money yourself.  It will take quite a while before they sue you.  Then you can offer a settlement yourself.  I had one credit card company send me a 33% settlement offer all by themselves because they knew I was in trouble.  Unfortunately I didn't have the money, otherwise I would have jumped on it.

Anyway, that's my experience.  Don't know what kind of debt you have, but if it's credit cards you can pretty much do it yourself.

I wish you luck!! 

• For those who have used credit counseling services, what was your experience? - Paycheck to paycheck
  • Run away from those companies. sm - been there
  • This is - my experience
    • It isn't easy to do this anymore. Laws have changed drastically. - nm
  • but you have to be careful. There are alot of sm - I used one very successfully.

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