[USER]

Please no judgement. I’m trying to get my finances straightened out due to some bad mistakes with credit cards. None of it was frugal, mostly to get by, food, gas, medications etc, but how quickly it spirals out of control. I have cut up my cards and signed with a debt reduction company.

Has anyone else done this and if so what was your experience? I’m retired and on a fixed income so it seemed my only solution.

[Loretta]

If you go to each credit card company and tell them you are retired and on a fixed income if there is some way they can help you out.

Mine deducted my month bill from $227 month to $ 50 month.closed my account, stopped interest and gave me a reduction on my principal. I just had one credit card.

Now if you are late they can go back to the old way. I paid that off much faster

[Ruth]

I used National Debt Relief as well. They do tell you what to say to your creditors when those calls come in. It helps if you do exactly as they advise.

I had to ask National to stop calling me on a regular basis but only communicate via email. If any debtor refuses to work with them, and your case goes to court, it helps if you have no assets and only receive SS…they cannot attach your SS.

My son fell ill with schizophrenia and couldn’t pay his half of our rent/debts. We lost our apartment, and it was very uncertain how I would get through the situation.

Fast forward two and a half years. I’m finally in subsidized senior housing, debts are paid, and son has help with housing/health. At 75 years old, I have no real concern about my credit score, nobody is going to give me credit anymore anyway, but my score is slowly climbing. Good luck

[Mindy]

Sounds like you’re on the right road. You’ve admitted you had a problem and are working with a solution. Good for you. Kudos for writing your post.

[Stephanie]

I wish you would have said something before you signed up with them. Because usually it makes your credit worse and many of the cards might turn down the deal which ruins every thing.

Honestly, bankruptcy is the fastest way to get back on your feet when you’re in your situation. It’s not too late to go see a bankruptcy lawyer.

[Kenda]

Did the debt reduction company tell you they will negotiate a settlement and the amount charged off will be considered income and you will have to pay taxes on it.

[Hillary]

I used National Debt Relief and was able to get out of $14k in debt. I recommend making bigger payments than suggested when you can, otherwise the process is extremely long.

But it is one of the best ways to pay off your debt without paying entirely what you owe.

The company will bargain with your creditors on your behalf and that helps a ton. But the initial process is scary because they tell you to stop paying your creditors all together and you will receive a lot of phone calls and sometimes legal threats.

American Express actually sued me, but apparently that is normal and NDR handled the process for me.
Ultimately I became debt free after about three years of making payments and making one big payment at the end.

My credit score took a huge hit but recovered fairly quickly and I was able to buy a house. If I had declared bankruptcy I think it would have been a different story.

[April]

Please read the fine print. We went to one and not only did they jack up the payment to more than the credit card payments were and at the last minute, but the contract said there was no guarantee that debt relief would occur and that if our payments weren’t enough at the end of the contract we would owe one big balloon payment.

We ended up doing what Dave Ramsey suggests according to our finances and got everything paid off

[Janelle]

The debt reduction company I worked with did absolutely nothing except collect my money. I knew something was up when I was offered to settle a debt for the same price as I owed them originally (like how is that a reduction?).

I found out they never talked to my creditors once. I was sent to collections and received all sorts of harassing calls to pay debts.

It was a horrible experience and I had to file for bankruptcy because there was no way to negotiate when my rates went up over 30% and creditors refused to take off the fees.

The fees alone were more than I was paying the reduction company. And that’s how my payoff amount was reduced to 50% aka the original amount I owed because of all the fees.

I would have been better off talking to my creditors and getting on a special program/payment plan with them.

[Author]

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