Should I do Debt Settlement?

NO, NO, NO, NO

With a FICO score in the 700s, that is pretty good.

Go to a bank, get a loan to pay off all the credit card debt. Then deal with 1 loan.

A bank loan will have FAR LESS interest than the credit cards will.

What country do you live in? I know about the Canadian laws but not so much on the American ones, or anywhere else for that matter. Just thought if it was Canada I might be able to help.

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I live in Ohio. Thanks anyway!

Debt settlement works if you have the right company to do it for you and the right creditor mix. I don't know about those two companies you mentioned but if you want a recommendation from me, PM me and I will give you one.

As for your credit score, you can't expect it to come back up to the 700s very soon. I will say though that we have had clients that went trhu a debt settlement program and without doing ANY credit restoration, their credit scores rose between 20-120 points from when they started. However, there is just no way to tell how your credit will be affected with this little info.

A bank loan may work but check out the rates.... If your DTI is high, you may not get the rate you are looking for. Hands down, debt settlement offers the lowest monthly payments.

Do you own a home? We have helped a lot of people do a combo home loan with debt settlement. Its an awesome option that will bring your overall payments way down. It gets you in and out of the settlement program quick and allows you to start rebuilding your credit sooner.

(Sorry if this sounds like a pitch... Its not. Lol)

__________________
~I recently visited the Virgin Islands. They have since been renamed to just the Islands.
~I have CDO. It's like OCD but the letters are properly placed in alphabetical order... like they should be.
~I'm what they call an apathetic sociopath. I'd kill you... if I actually cared.

Did you make a decision? We are in a similar situation and talking with several debt settlement companies but we are very nervous as we have not talked with anyone who has been in a program similar to this.

No financial planner would ever recommend a mortgage refinance (one form of debt consolidation) to get out of credit card debt. It is substituting secured debt for unsecured debt and you could lose your home over a bunch of unsecured credit card debt if you get injured or can't afford your new higher monthly payments.

Also, and these are verifiable published reports, 77% of all people who refinance their way out of credit card debt are right back at the same level of credit card debt 2.5 years later on average only now with less equity in their home. So it obviously isn't fixing the problem.

Why?

Because no behavior modification was needed. You made it too easy on them to just refinance out of cc debt. No financial planner will ever recommend that route.

In settlement though they have to go without using credit cards for 2 to 3 years and do go through behavior modication. Secondly, credit counseling entries on your credit report are as bad as bankruptcy entries
They will crash your FICO for 10 years and take you from a 700 FICO down to low 500's literally overnight.

Debt settlement on the other hand is only a late pay on your credit report. Late pays bring down a 700+ FICO about 40-50 points, they bring down 600+ FICO's about 30 points, and bring down 500+ FICOs about 10-20 points. But more importantly, the FICO goes back up more than the drop from late pays as the debt is eliminated so the debt to income ratio goes down to zero and their FICO is back up higher than it was before they joined a settlement program even with the late pays on there, but they shouldn't be. Negotiating a withdrawal of the late pay entry as part of the negotiated settlement is a very common part of the process.

Superior Debt is the only company that pays for credit restoration at the end of the program, bringing the FICO up even higher. It also helps to remove any of the late pay marks that may have accumulated, further ensuring that your credit score will be in great shape after all is said and done.

This is the post I was referring to except he withheld the link so it wouldn't be tagged as spam...

But just to correct ALL the errors in the information provided by Superior....

Financial Planners WOULD recommend a debt consolidation loan in some cases... I AM a financial planner and I have recommended it before. Please do not make generalized false statements as such. There is no cookie cutter solution for people in debt. It requires a complete analysis of your financial situation... Past, present, and future to give a QUALITY recommendation to anyone.

Behavior modification usually IS needed... Just not always given. Sure a consolidation loan alone is not helping all of these people... But a settlement program alone wouldn't help them either. They are just as likely to find themselves in the same amount of debt 2.5 years after completing a settlement program as they are with consolidation loan. The lesson must be learned.

Are you saying that your settlement company offers "Behavior Modification" for its clients?

Going without credit cards for 2 or 3 years MAY help someone but it is not gauranteed. People need to educate themselves financially... Whether they are in debt or not. This is not something that is taught at school... Though it should be!

This is just 100% wrong.

A credit counseling entry on your credit report is NOT just as bad as a bankruptcy. And a credit counseling entry will NOT affect your credit score one bit!

When you enroll in credit counseling there will be an entry below each account (usually just says "DMP" for Debt Management Program). This DOES NOT affect your FICO score or your Beacon score!

However, a lendor will see this and may not be willing to lend to you while you are in the program. The thing is that this is telling them that you are struggling with the payments you have now and if you are trying to acquire a new monthly payment through them, they are likely to turn you down.

The good news is that, unlike bankruptcy, once you have completed the credit counseling program, the lenders will not care that you were once in it. The mark will still be there but the debt is gone and they just don't care. So it is not "just as bad as a bankrupcty" and it will not "crash your FICO score for 10 years."

This is also bad advice... I can't say that it is wrong because for some people, this will be the case. But to generalize this for EVERYONE is completely misleading.

There is no way to determine how much a certain mark is going to affect everyone's score. There are TOO MANY variables. For example:

Lets say I have a 600 FICO score. Lets say that this was made up on ONE account. By Superiors admission here, he says that if that one account goes late, my score will drop about 30 points. Maybe....

Heres the other hand:

Lets say I have a 600 FICO score. However, lets say that this was made up of 100 different credit accounts. Now, if that same account went late, do you REALLY think it will have as much of an effect as in Example A?

C'mon... Please.... To claim that someone knows this and that it applies to EVERYONE is just ignorant.

This is usually true but not for everyone. Typically, the higher your score is when you enroll in a settlement program, the harder it will be to get it back up that high. However, in many cases, we have seen scored jump anywhere between 20-120 points higher than they were before they entered the program.

Still not entirely true... They are not the ONLY ones that do this. There are other settlement companies that offer credit restoration for their clients.


All in all, this is obviously copied from their website or something. I actually hadn't heard much bad about Superior Debt Relief... Until now. To go and publically spew all this cr@p (sorry) in a forum like this is just shooting yourself in the foot. I would not recommend Superior Debt Relief to anyone looking for a debt settlement company solely based on their representation.

Luckily he ommitted the part about the BBB in this post or I would have had more to rant about.

Anyone scanning this thread, before you buy into this BS posted before me by Superior, please read this post

Thank you and have a GREAT day

__________________
~I recently visited the Virgin Islands. They have since been renamed to just the Islands.
~I have CDO. It's like OCD but the letters are properly placed in alphabetical order... like they should be.
~I'm what they call an apathetic sociopath. I'd kill you... if I actually cared.

A Moderator's side note:

A post was deleted in this thread that was blatant advertising.

Users are not permitted to advertise their services within posts, but putting a link to your services in your signature is no problem. In fact, you see I do so myself with one of the links in my own sig.

So the way to play the middle ground - and be sure to not appear to be advertising - is to stick to directly answering the initial question.

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Rick
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Go Bucks!

If you're a financial planner, and you recommend that somebody trade their unsecured debt for secured debt, then you are asking them to put up property to take care of unsecured debt loads. Why would you advise somebody to put their house on the line to take care of old credit cards? I agree that it requires a complete analysis of their financial situation to give a QUALITY recommendation, but this is a forum. To generally state that it is a good idea to put up property to take care of unsecured debt is not sound advice.


Behavior modification mixed with education and experience will help to place anybody in a better situation. When a client enters into a debt settlement program they have to go through the program without using their credit cards. This is a form of behavior modification. The client will get used to the idea that they need money to pay for the things that they want.

When entering a debt consolidation program, this is not the case. Consolidation does not have ANY program in place to modify the behavior patterns of their clients. All debt consolidation will teach is that you can shift your debt load around to try and obtain the lowest interest rate. So keep racking up the debt load. The interest rate will always be low as long as you can consolidate.


When you use consumer credit counseling (funded by creditors) then you will receive a mark on your account that says "TPA" which stands for third party assistance. This tells the creditors that you are unable to take care of your own financial situation and that a third party had to intervene. Even after the account is paid off it will be looked upon negatively by creditors. They DO care!


There are too many variables to determine exactly how your FICO will be affected, but these numbers are based on averages. Even YOU are aware that an average is a general number.




Other debt settlement companies may offer credit restoration at the end of their program, but they charge more for it. Superior does not. We offer it as part of the program with no additional fees for this service. We may not profit as much as other companies, but the quality is more important than the money.




Don't come on here ranting about how I'm posting "cr@p" and then spew out your own. We both hit some good points, and I think that's the point of these forums. Everyone is entitled to their opinion, but you're on the negative side for sure. To dispute is one thing, but to come out and call a post "cr@p" and "BS" is just plain rude.