I am thinking of getting involved with Oak View Law Group to consolidate my debt. Does anyone have any information on these guys? Do they really work or are they a scam like so many others? In their information they say to stop paying my creditors immediately and let my accounts go default that way they can negotiate them. Let me know. Thank you.
STAY AWAY from any “debt consolidation” program that involves debt settlement. Debt settlement is a risky tactic of ceasing all payments to your creditors and deliberately defaulting on the accounts to attempt settling the accounts at 50%. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment. No debt settlement firm can force your creditors to accept settlements.
Another option is to enter into a Debt Management Plan (DMP) with a non-profit credit counselor like CCCS (Consumer Credit Counseling Services). Contact your local Red Cross for a referral. They can negotiate lower payments and interest rates. They do not negotiate settlements.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to “enrolled in debt management.” This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you’re enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt. Please note that CCCS cannot perform miracles in situations where there is an overwhelming level of debt relative to your income/asset.
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Final note: if you really want to try debt settlement anyway, then do it on your own. You don’t have to pay any company money to default on your cards and attempt settlements….you can do this yourself for free….Just be advised that this will be a stressful and unpredictable process (lots of “nice” phone calls from debt collectors) and the same risk of a lawsuit as mentioned above still applies:
This process involves stopping all payments on your credit cards so that they will default. Save as much money as you can for about 6-9 months and then try to make settlements directly with your creditors at around 50%. Make sure you get all terms in WRITING first…..Of course this process will ruin your credit rating.
there two things. debt consolidation and debt settlement. what you describe there is settlement. your credit companies will think you are unable to pay your bills by not paying them for a few months. in doing this, they will want to try and recover any money then can. in this, they will settle for less money. you credit report will also take a big hit because they will all show delinquency in your payment history. they will say during consolidation that in your report, it shows as paid, but remember that in your report is your payment history. for each account, it shows your balance, the high balance, and if you been delinquent, which holding back your payments will make it.
in credit counseling, they consolidate all of your unsecured debt into one payment. every month the will draft say 500 dollars out of your account and they split that money up to your credit companies. doing it this way, you are still making your payments and your credit score will go up. also, doing it this way will usually lower your interest rates to the company as long as you are in the program and making the payments.
downside to consolidation, you are unable to apply for unsecured credit, that is no store card or credit. you can still buy a car etc. it will show up on your credit report that you are in a program and someone else is managing your debt. this will make it harder for you to apply and get approved for loans. but as you make the payments, your score goes up.
doing consolidation will also be more expensive in the long run becaue you are paying interest still and your full balances. its a matter of how you want to handle your credit history and if you are the type of person to pay back your debts. i’ve been in consolidation for a year now and my credit score is far higher than it was before i joined the program and was behind on payments.
both types of debt management will have fee’s. there is administrative fee’s with both and usually debt consolidation companies are nonprofit. while a debt settlement companies maybe out to make money and will charge you a fee depending on the amount that is settled. yes consolidation companies were first credit by credit companies so that they can get there money back.
look into both options and see what is best. do not get pressure into doing one or the other by the people on the phone. talking to both types of companies is free and take advantage of it.
IMHO, I’d stay away from groups like this. They won’t make you situation better and more chances than not, make it much worse.
Settling accounts is a tricky subject and may or may not happen, it just depends on the creditor and how delinquent the account is. By just stopping payments and hoping for a cheap settlement, you’re leaving yourself wide open to a lawsuit. Not only that, your credit will suffer as well. Plus, you’re paying these guys to ruin your credit.
Heed, CatDad’s advice. It’s cheaper and will keep you in a safer and better financial standing.
Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. There is a better way.
A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another.
Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.
2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.
3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:
To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment
Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment
Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.
4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.
5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
You can do it and it isn’t as hard as you think. Just follow the plan