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I would recommend a visit to a bank for a first visit.  Any bank will do.    You don't have to give your name.

The bank is probably familiar with reputable places.    They probably don't do debt consolidation themselves, which may help give some objectivity to the situation.

30K in debit... you poor thing... I guess it's a good indication of a couseling service when it's been arround for 5 or more years??

http://www.debtadvice.org/

Good luck.

$15,000 isn't all that much, not worth filing for bankruptcy over anyway. Water under the bridge, but no matter what the reason, getting into debt with CCard companies isn't very smart. A bank loan for instance is a contract with a specific set of rules that both parties agree to. If you read the conditions you are agreeing to when you use a credit card, you will realize that the lender can pretty much change the terms and conditions as they please. The only thing that keeps them from going hog wild is competition amongst the vultures.

As suggested before, I would advise your brother to go to his bank first. Even if they are unable to bail him out, they may be able to set up something whereas the amount he needs to pay these things off with will be deducted from his account automatically, but within his means. If it is one card, great, if it is more than one, he should make minimum payments on the lowest interest one(s), and pay off the one with the highest rate first. Also he should cancel all the cards (the accounts will remain active for paying off the debt) immediately, or at the very least cut them up and shred the checks and transfer come-ons that come with the statements. After he is in the clear, he can obtain another one, and his credit rating will be unblemished. This is the way to fiscal responsibilty. Presumably he is a young man, and now is the best time to learn. Think of it like a diet - he didn't gain the debt overnight, so he must expect to lose it slowly in order to keep it off.

It may seem like a tall order, but it is worth it in the long run.

TheConfuzed1 wrote:

First of all, some background--I am the internet sales and finance manager of a car dealership.

I am very much aware of credit and what is a good way or a bad way to handle debt.

You're not going to like my answer, but it's as straight an answer as you're going to get:

Don't do credit counseling.  It will smurf you.

Many credit counseling companies will result in late payments being posted, and that is no help.

Also, 95% of lenders won't touch you if you're in credit counseling.  The reason for this is because about 90% of the people going through it end up filing for bankruptcy anyway, so you're a huge financial risk.

It is cheaper, and less detrimental to your credit to simply throw in the towel and file for bankruptcy.  Lenders are comfortable with a BK because you have already dealt with the situation, and you are now on your way up, as opposed to still being in the situation, and on your way down.  Also, someone that has recently filed for bankruptcy is more likely to pay on time, as opposed to someone going through credit counseling, because the worst thing that you can do after a bankruptcy is not pay, and the point of filing bankruptcy is to fix your credit, not worsen it.

You will have people tell you to accept your responsibility and pay the debt that you have accumulated, etc, but this is the straight truth.

I totally agree with this assessment. Can he talk to the credit card people and workk out something. from  their point of view even a fixed payment plan is better for all parties than bankruptcy. It will take time but it wont be as bad in the long run

Maybe it would be wise to get a line of credit at a bank, with an interest rate that will be far lower than a credit card.  Pay off the cards with the line of credit, and cut up the cards.  Then, pay off the line of credit over a year or two.  You could even set up automatic deposits, so that the monthly line of credit dues are paid the day after the paycheque is deposited.  Pay yourself first!

Of course, this all depends on getting that line of credit.  And, not using it for anything but payment of debts!

Wow.  This whole thread scares me.  But it only really scares me because it seem so typical these days.  Here's what I would suggest - take it or leave it.  (By the way, he should check out this dude on the radio, Dave Ramsey.  I think he's great, personally.)

1.  Do NOT go to a debt consolidation / credit counciling company.  Many have horrible records of not paying your stuff (in the case of the "we can get a better interest rate than you, so you pay us and we'll pay your bills" companies).  Either way, if you ever go to get a home loan someday, the bank will treat you as if you had actually filed bankruptcy.

2.  Don't file bankruptcy, for a few reasons.  First, he morally and legally owes this money.  He signed a contract, then dug his own hole.  Unless your debt is going to destroy your family or keep you from eating, then I think it's morally wrong to file bankruptcy.  Sure, there are situations where my stance wavers on this, but just racking up credit card debt is not one of them.  Plus, if his debt is to magically "go away", you can be pretty sure he'll get back into it again.  With no pain, the lesson can't be learned.  (Also - check out this info on bankruptcy.)

3.  He needs to get on a budget and pay off the money.  Sure, $15k is a lot of cash, but if he buckles down, gets on a written monthly budget, doesn't eat out or play for a while, and puts every extra dollar on the debt, he can take care of this.  Tell him to take an extra job delivering pizzas in the evenings or something.  How much is his car payment?  Maybe he should sell whatever he's driving and get a cheap little junker, then save cash for a car once his CC debt is paid off.  Whatever it takes, he spent the cash, he should pay it back.

WTF?

It's better for your credit to declare bankruptcy than to actually pay off your debt?? Are you guys serious??

What a debit agency does is get the credit card companies to reduce their usurious rates to something more reasonable so you actually have a chance to pay off the debt. Sure, they may not like it, but they are partly responsible in allowing you to rack up the burden and they will STILL get a chunk of interest from you.

Yes, you can't just set up and forget. I had to monitor my bills to make sure the payment were getting out on time and I also had to call a couple of creditors to arrange for a change in billing dates. And after going through the process, I have credit card applications flying in my mailbox and I was easily able to get a new car loan.

I really don't think bankruptcy is a superior solution.

Cynic wrote:

Wow.  This whole thread scares me.  But it only really scares me because it seem so typical these days.  Here's what I would suggest - take it or leave it.  (By the way, he should check out this dude on the radio, Dave Ramsey.  I think he's great, personally.)

1.  Do NOT go to a debt consolidation / credit counciling company.  Many have horrible records of not paying your stuff (in the case of the "we can get a better interest rate than you, so you pay us and we'll pay your bills" companies).  Either way, if you ever go to get a home loan someday, the bank will treat you as if you had actually filed bankruptcy.

2.  Don't file bankruptcy, for a few reasons.  First, he morally and legally owes this money.  He signed a contract, then dug his own hole.  Unless your debt is going to destroy your family or keep you from eating, then I think it's morally wrong to file bankruptcy.  Sure, there are situations where my stance wavers on this, but just racking up credit card debt is not one of them.  Plus, if his debt is to magically "go away", you can be pretty sure he'll get back into it again.  With no pain, the lesson can't be learned.  (Also - check out this info on bankruptcy.)

3.  He needs to get on a budget and pay off the money.  Sure, $15k is a lot of cash, but if he buckles down, gets on a written monthly budget, doesn't eat out or play for a while, and puts every extra dollar on the debt, he can take care of this.  Tell him to take an extra job delivering pizzas in the evenings or something.  How much is his car payment?  Maybe he should sell whatever he's driving and get a cheap little junker, then save cash for a car once his CC debt is paid off.  Whatever it takes, he spent the cash, he should pay it back.

You DO realize that a Chapter 13 is a repayment/debt reorganization plan from 10-100% of debt? Chapter 7 dissolves all debt and responsibility. He can still file and get the protection of the feds AND pay his entire debt off.

kman wrote:

QFT

I'm not positive what QFT meants, but I think I have an idea.  If it means what I think it does, I'm glad that your only entry into this discussion was so insightful and productive.  Well done.

justine wrote:

You DO realize that a Chapter 13 is a repayment/debt reorganization plan from 10-100% of debt? Chapter 7 dissolves all debt and responsibility. He can still file and get the protection of the feds AND pay his entire debt off.

Yes, I do realize that.  And if he files 13 and pays 100% of his debt, it's better than nothing.  But if he is capable of working his butt off and paying all of his debt, but files any type of bankruptcy instead, I would call that imoral.  It's just my opinion.    Either way, bankruptcy is going to destroy his credit.

Also, with some work, you should be able to get the same interest rate reduction that some of these consolidation/advising companies can get.  Call the credit card companies.  Work with them.  If they won't reduce your rate, surf the balance over to one of the other dozen cards you get offers for that have a lower rate.  But your interest rate isn't the big issue.  The big issue is busting your butt and putting all of your extra cash onto your debt until it's gone.  Then not going into debt anymore.

Cynic wrote:

kman wrote:

QFT

I'm not positive what QFT meants, but I think I have an idea.  If it means what I think it does, I'm glad that your only entry into this discussion was so insightful and productive.  Well done.

QFT=Quoted For Truth, and that being said, I agree with you too.