No. of Recommendations: 10
I am thinking about getting rid of this using a debt settlement program. Is this better than a credit counseling program? What are the differences? Which one is better?

First - BREATHE - then - put away the cards- shred them/freeze them/mail them to me - whatever - make them inaccessible to YOU.

Change your behavior first.
Read old threads with HELP as the subject matter ;-)

Settling a debt is an option - not IMHO the best one.
Here's how it works (using one creditor for the example)
- you have $24K in CC debt - you offer the CC company $8K in exchange for closed accounts with zero balances.
1) big black mark on your credit report (BIG)
2) you will receive a 1099 at the end of the year in which you pay off that 8K for $16K. The Difference between what you pay and what you owe is considered income taxable at 28%. So you will also need another $4500 for the tax portion of it.

Counseling is where a third party contacts the CCs and negotiates lower rates for set payment amounts in exchange for @ $10 per month per Creditor.
So you are paying them to make payments for you - when that extra $20 a month should be going towards the debt.
This truly is something you can do ON YOUR OWN. Just takes time and you have to resort to doing everything in writing - NO PHONE CALLS. No agreeing to anything via the phone or believing what soemone tells you - write a letter- get your offer/payment arrangement/new interest rate in writing.

peace & doing it yourself
Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.