what would you suggest to be my next step in this financial situaion? see details below?

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i have been in a debt consolidation 4 7-8 months & one of my creditors took me to court. the judge said that if my creditor dosen’t want to accept pymt from them they dont have to which means i would have to work something out with them and i have to have a decision made whe i go back to court on feb 5th. now i called my debt company & they tell to tell judge that i dont have the $ at this time & to contact them if there is a settlement offer. so my question is should i get out of this program all together and start over with my creditors with settlement or should i stick it out? i have about $ 10,000 of debt in this program and now after numerous calls from collection agencies & being summons to court i am wondering if this is the best way to being going about this. there has been some to suggest to me to consider bankruptcy. should i be looking at that as my next option. I am so confused & stuck on what 2 do & please help?

4 Comments
  1. Reply
    Laura B
    October 28, 2011 at 3:01 am

    Hello,

    I know exactly what you need. I was in a very similar situation and I’ve had friends in situations that are 10x worse then this one.

    One of my buddies came across this site, and they have a free eBook which tells you everything you’ll ever need to know.

  2. Reply
    irspecialbb
    October 28, 2011 at 3:36 am

    First of all, you should never have gone to a consolidation company, you end up paying almost twice the amount of money with their fees included then you would making the minimum payments your self (which is waht they are doing with your money anyways) second, let the creditor know that you were not aware that they would not accept the payments, you may be able to work something out, if anything, look at debt settlement programs, they may be able to help a lot more.

  3. Reply
    CreditCards.com
    October 28, 2011 at 3:49 am

    If you’re in debt consolidation, and the creditors are calling you, you’re not working with a competent debt consolidation company.

    They should have informed you about your rights under the Fair Debt Collection Practices Act. They should be handling the calls.

    At this stage, you need to consider all your options. If I were in your shoes, I’d contact my local office of the American Bar Association. Ask to be recommended to bankruptcy attorney. Don’t worry, talking to one doesn’t mean you have to declare bankruptcy.

    Tell the attorney you’ll pay him or her their hourly rate for two hours. Bring your paperwork (and your checkbook!). Get advice.

    If you’ve never been to a legitimate credit counselor, find one. My company, CreditCards.com, has a story about how to choose one. See http://www.creditcards.com/Select-a-Credit-Counseling-Agency.php. They don’t cost much for a consultation.

    Between the two, they should clear the air and lift the fog you’re in. From what you say, you’re stuck with an incompetennt consolidation shop — and there are a lot of them. Get rid of them.

    Good luck.

  4. Reply
    Keith_dude
    October 28, 2011 at 4:14 am

    Here’s my advice.

    Call a lawyer. This has spiraled out of control!! When you call the laywer, explain your situation. You should SUE the debt consolidation program for their shoddy service. They should have been a better advocate for you, and also, they should have kept you informed about this creditor who didn’t want to participate in your plan. It sounds like a lot of time passed between when you started consolidating and this lawsuit. I find it hard to believe that the creditor ran instantly to the court. Suing someone is expensive business, so something happened behind the scenes between the creditor and the debt consolidation company.

    I think that you might want to consider bankruptcy. If you are working and getting a decent wage, I don’t see why you couldn’t pay off all your debt in the next 3-5 years with steady and stable payments. However, now that you are in court, the whole situation has changed. Bankruptcy offers protections to you. First, if a judgment is award against you, then that will be wiped away in bankruptcy. Second, bankruptcy provides for an automatic stay from any legal proceedings so this BS that you are going through with the court would stop. Part of this stay also is that no one can harass you for money while you are going through the process. You would only pay bills for things like rent, car payment, car insurance, student loans if you have any. While the bankruptcy law has changed, the threshold has been a set a little higher, but considering what you owe and how you can’t pay, it sounds to me like you under the income threshold.

    Bankruptcy is a serious thing. It will stay on your credit report for 10 years. The good news is that after a year or two, as long as you’ve kept your finance in good order and saved some money, it’s usually not too hard to get credit. You don’t always get the best rates, but as time goes on, that gets better.

    Another point to mention is that you could use bankruptcy as a last resort threat to this creditor. Call them up and tell them that unless they work with you, you’ll have no choice but to file. And then they’ll get nothing!! They’ll be even worse off than they are now. What do you have to lose? If they don’t work with you, you won’t be able to pay, and they’ll get nothing. If you do go this route, try to be as nice as possible and simple state the facts as they are: You can’t pay what they want you to pay and that they are pushing you towards filing for bankruptcy.

    I can’t tell you what to do, but court is scary. I’ve been to court, and it’s no picnic. It’s stressful, confusing and scary, and I would never wish it on my worst enemy. The matter has been made worse because the debt consolidation company has probably dragged their feet so long that this credit card company who doesn’t want to agree to your terms is making trouble. If you had known at the outset, you could have kept the other credit cards with the debt consolidator and tried to work on your own with the other one, but that seems like it might not work now.

    Also, bankruptcy is expensive, and you’ll probably NOT be able to find someone to do it for free but shop around. A lawyer might give you a break since what you owe isn’t all that much. Some states allow you to file on your own, but it is extremely complicated, and it gets even more complicated if your creditors decided to cause trouble.

    Good luck, and I hope that my answer was helpful.

    (Oh, before I forget…some debt consolidation contracts have weird wording in there about bankruptcy. Make sure that you don’t violate your contract with them by doing so, although I’m not sure that’ll make much difference. You may have to end your services with them before doing so)

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