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- Joined: Wed Aug 17, 2011 10:53 pm
- Location: USA
Based on my own experiences and the experiences of some friends, attempting to work things out with your card companies and/or banks might prove to be more beneficial.
A few years ago, I got really sick and I ended up being saddled with a huge load of medical bills despite the very excellent medical insurance that I had. As I was self employed at the time and unable to work because of the illness, I knew I wouldn't be able to pay for them all all in one go and so I ended up with the problem of not knowing who, what, and how much to pay first and how to manage the fallout associated with carrying high(er) balances.
Nobody I knew at the time was any wiser about how to deal with such situations and so I turned to the companies who had provided a younger me with credit counseling when opening my first student credit card accounts - my credit card companies.
I spoke with the two companies whose cards I relied on the most and explained the situation to them and I got referred to their credit consulting and debt collections department.
In talking with these reps, I got advice and was given options and for both companies, I decided to work out a payment plan with them where - at the cost of having my accounts temporarily frozen for purchases after I had made all my 'necessary' purchases - I was able to make smaller but set payments over a duration of time and not have to worry about my APR kicking me in the ass for carrying much higher balances than normal.
Yes, I did have to default (temporarily and only once) and the reason for this they told me was that in order to GET help for credit problems, you have to be in bad debt first (kind of ironic considering how I wanted advice BEFORE I defaulted)... but the good news was was that if I completed my payment plan as agreed upon, the default strike on my credit report would be erased and my cards could be fully restored at their original terms.
Neither of the companies went back on their word and the end result was: I was able to better manage my chaotic finances without having to turn to shammy credit counselors who would do goodness-knows-what to my accounts and I was able to KEEP my credit accounts in good standing without destroying my credit score or report.
Yes, I carried a default strike on the account for the duration of the payment plan, BUT it was ONLY for the duration of that payment plan and once the payment plan was finished, the credit counselor congratulated me and reinstated my account back to its previous un-defaulted state.
I guess the moral of the story is this:
You can owe money - sometimes a lot of money - on your credit accounts and not be viewed as the "bad consumer". It can be embarrassing, but the credit companies - especially in these times - can be understanding, too, and can be willing to try and work things out with you. Thing is, you'll never know unless you try and reach out.
They would rather directly work with you if possible than have to deal with some third party, in my honest opinion.
Be honest with whomever you owe money and be the first to admit that you're having troubles keeping up. My credit companies rewarded me for my honesty and were willing to work with me; maybe they will do the same for you.
Best of luck and make sure you research the exact details on the "credit counseling" you plan to do! Credit counseling offered by banks and major credit card holders = good things. Credit counseling on the 'net or on the TV = "Maybe I should look them up and do some homework..."
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