[USER]

My husband and I are considering going thru National Debt Relief to get our bills under control and hopefully improve our credit. Are they trustworthy?

My husband is going to call the bank and double check, but also does anyone know if that looks bad to have debt consolidation when you’re trying to buy a house?

[Molly]

So, a few years ago, my husband and I had a business that failed and we had personally guaranteed all the personal loans for the business.

I had a career in banking and business so I’ve known all of these programs and such before.

We went through Navicore for a debt program. National Debt Relief and also Navicore honestly will DESTROY your credit faster than anything. It ruins your payment history.

We ended up declaring bankruptcy and our credit is already up and it’s been 1.5 years.

You can buy a house 2 years after bankruptcy. But from my experience, those programs do not give you a clean slate.

They close your accounts, and negotiate the balance with the companies. So, on your credit report it can show as not paid in full, not satisfied, payment history poor etc.

Bankruptcy wipes your slate clean for credit report and all creditors.

I highly suggest having a consultation with a bankruptcy lawyer before you do ANY debt relief programs. HIGHLY SUGGEST.

[Deborah]

Consumer Credit Counseling Service. They are a nonprofit in every state and are very reputable.

[Bridgette]

From what I have heard, they are not reputable & yes, it absolutely looks bad when you are trying to purchase a home because to the mortgage company, you have “too much debt that you don’t know how to handle,” so they would be very hesitant to approve a good loan

(speaking from someone who owns a home & went through that whole process, and as someone who has several realtor friends/family).

[Jana]

Dave Ramsey, saved us in the 08 crash. It isn’t easy but it works if you follow the steps

[Jennifer]

Don’t do it. I did it and it ruined my credit for 7 years. It’s better if you call your creditors individually and try to work out a payment plan with them.

[Ariana]

Don’t do it! Get the book The Total Money Makeover. If you don’t change you and your habits, nothing will change!

[Rosemary]

I’m a mortgage lender. The answer is…it depends on how the debt condition is done. You should reach out to a local mortgage broker to get information.

Way better to have that conversation before you do it than after.

They will be very happy to give you guidance

[Emily]

Lots of consolidation companies will tell you to quit paying on all your debt for a certain number of time.

This will TANK your credit. From what I’ve been told from friends who’ve done Debt consolidation like this, it took years to fix and occasionally they ended up just filing bankruptcy

[Amanda]

We had amazing results from them. Yes, our credit went down but not as crazy as people are saying.

Also, after we finished the program in about a 6 months our credit was higher than ever.

[Krista]

They’re not debt consolidation. They’re debt settlement. Meaning you couldn’t pay your debt so you negotiated a settlement.

It will kill your credit score and age of credit rating.

One condition of settled accounts is that they be closed.

Cut up the credit cards and leave the accounts open.

Pay them down below 20% usage per card. Then pay them all off

[Amy]

It ruins your credit! And they charge alot of fees! Don’t do it.
It will take years to repair your credit enough to purchase a house after entering into ANY debt management plan.

Not all, but MOST are predatory with unreasonable terms – I recently read that less than 10% of consumers that enter into one of these plans are actually able to complete them….

leaving them with the same amount (or more) of debt and worse credit ratings.

[Jennifer]

Honestly, speaking from experience, if it’s tough to pay the bills now, how will you be able to pay a mortgage on top of savings for repairs and maintenance, let alone when escrow (home owners insurance and property taxes) goes up every year along with all of your other bills.

It’s absolutely 100% okay to continue to rent while you clean up your bills and gain control of them.

The rent money is the MOST you will pay. A mortgage is the LEAST you will pay.

This year our property taxes increased about $125 a month. Our home owners insurance jumped up $80 a month and car insurance went up by $75, also, electric bill is $180-200 a month, propane is about $1200 yearly for fill ups (I save $100 into a savings account and prebuy at a discounted rate.

When we purchased our first house in 2011 for $80k, the mortgage was $690, and the rent we were paying was $560. Of course now it’s a bit different.

But we also had all types of debt. Student, car, medical, personal loans. You name it, we had it.

And we still bought a house. Then in 2012, that Derecho came through and ripped parts of our roof off.

That’s a $1k deductible that we didn’t have. Fall came and the water service line from the house to the street busted, that was $6k to dig up, and reroute the line, also flooded the basement.

A year later, the water heater leaked, flooding the basement again. We had car accidents, more issues with the water heater(3 times!).

Garage door spring broke, needed to replace some windows. Had more issues with the roof, ended up replacing it for $5k (that was cheap back then).

Owning can be your greatest blessing or it can be the biggest curse.
What you do right now, will determine how it will be.

Write out all of your loans and bills and talk about what reason that loan was led into your life.

What can you do to take control again? We had 3 cars ($1500 total payments at one point, plus $350 monthly fuel and then $300 for insurance monthly), that’s $2150 of money being thrown away monthly just because we thought we “needed” those type of vehicles.

Ended up selling 2 at the same time to get a cheaper one on cheaper payments. That helped a TON. But we still needed to pull the reigns in on our spending. And we did.

We did Dave Ramseys Financial Peace University through our church.

We went on a bare bones budget and lived on $21k yearly and put the other $40k towards our debt.

We worked so much overtime, took a pause on contributing to retirement and focused on watching our debt decrease.

It took 32 months to pay off $59k of debt.

We also were about to pay for 6 IUIs (all failed), emergency gallbladder surgery and vet surgeries.

Paid everything off, but the mortgage and saved 6 months of expenses just about 3 months before COVID shutdown everything.

We were essential workers working in the medical field, so we still had jobs and we took that as an opportunity to help families that weren’t so lucky with their jobs to help them survive with basic essentials.

I WANT everyone to be able to own a home and to make it theirs. But I also want everyone to realize it’s not always going to be unicorns, rainbows and puppies.

There will be times that it’ll be dark, gloomy and stormy, but if you’re prepared with an umbrella, you’ll be just fine.

Good luck on whatever you choose to do.

[Lori]

Don’t do it. My grandson got so burned by one of these companies that advertise yo help. He paid them monthly.

The y held all the money and made money with it. Never paid the creditors.

I had one hell of a time but finally got it refunded after I paid his creditors. He ended up worse off.

These people are leeches that will not help you.

[Author]

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