Posted: 10/3/2025 1:10:52 PM EDT
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Title says it. She wants to do a debt consolidation loan, on $17k in cards across 5 or 6 cards, two of which are already in collections. They're saying that they can lump it all together, kill all the interest, and set up payments of 36 Months: $390/monthly or 48 Months: $296 monthly. By my math, that's about $14k or $14,400 by the time it's paid off. How the hell do these places make any money on something like this? I figure they're negotiating out half of the debt in order to make this work. They did tell her it would ding her credit, but how on earth does this work? Seems like a scam to me. |
| It's totally a scam. Have her contact the credit card companies directly and work out a payment plan, or get a debt consolidation loan from her bank if she can. She will take a serious hit on her credit by using the service. |
Nonne estis oblectati? Nonne hoc est quare adsitis?
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I'm reading between the lines and filling in some blanks with wild ass guesswork here, but... She's got active collections on her credit report. Vultures/predators buy contact info (well, limited or possibly unlimited credit report information) on people meeting the profile for vulnerable victims. Then they cold-call the victims promising to help them out. If the above guesswork is accurate... 1. you quit paying your credit card bills and give them money to pay or not pay them as they see fit. 2. they don't pay squat. 3. they try to negotiate a minimal buyout amount for the apparently worthless credit card debt that hasn't received any payments for a while. 4. best case scenario, your credit reports are full of 30-60-90-120 day late accounts, 'profit and loss writeoffs' and 'settled for less than the amount owed'. 5. worst case scenario, the banks don't want to play that game and they just sue you. Or the company you've been sending money to just doesn't pay the banks, pockets your money, and the banks sue you. If they sue you, you will end up owing the principle, interest, late fees and court costs, possibly attorney fees too. And they'll just garnish your paychecks/social security/whatever, or if they can find your bank accounts (like the account you used to pay your credit card bills from) they'll just garnish that. In short, if you just want to not pay your bills and see what kind of deal you can get from the card issuing banks, quit paying for 3 months and see what happens. You don't need a scammy company to not pay for you. |
I think the hardest thing for good LE working for good agencies to really absorb is that there are whole departments full of exactly the complete fuckheads we rail against here. - vectorsc
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These places make money because (a), they charge a fee. Sometimes 3-5%. and (b), most people dont pay off the consolidation loan. Your mom needs to sit down and binge watch a bunch of dave ramsey videos this weekend before she makes any decisions. He gets a lot of flak from folks, but people in your mom's situation is exactly who his advice helps the most. Its completely free advice. And no, you cannot borrow your way out of debt. It has to be a behavior change. 99.99999% of the time, people do these consolidation loans, or a home equity loan as a "quick fix" to get out of debt. Then they continue the bad behavior that got them there in the first place. And soon, the credit cards are ran right back up, plus now they have the consolidation loan payment to make. It is worse in the long run. Do not try to borrow your way out of debt. It only works on paper, not in the real world. There are lots of dirty, nasty people in the debt business. Some of the companies do have you ruin your credit, go to collections, then try to negotiate on your behalf. Any money you pay them goes into their pockets first, not to the actual debts. Avoid everybody who's business model involves stopping your payments, then negotiating a lower payment. They are all shady as fuck, across the board. The way they can get away with $14k, which is less than $17k, is because debts get bought and sold all the time. When they go to collections, they get sold for $0.05 per $1. Then it is up to whoever bought it to collect on it. If they can collect $0.25 out of every $1 they bought, they 5x'd their money. |
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Originally Posted By jos51700: Title says it. She wants to do a debt consolidation loan, on $17k in cards across 5 or 6 cards, two of which are already in collections. They're saying that they can lump it all together, kill all the interest, and set up payments of 36 Months: $390/monthly or 48 Months: $296 monthly. By my math, that's about $14k or $14,400 by the time it's paid off. How the hell do these places make any money on something like this? I figure they're negotiating out half of the debt in order to make this work. They did tell her it would ding her credit, but how on earth does this work? Seems like a scam to me. Have her cut them all up, come up with a budget, follow it, and pay them down ASAP. They is no magical "fix my mistakes" button. Time to be an adult. 
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My long term partner just went through this with her credit cards Not the consolidation loan, but with a “credit councilor “ company. Basically, they said to stop paying her two CCs and let their negotiator deal with companies. She did, they negotiated a 45% settlement on what she owed. The company collected a 25% fee for their work While they were waiting she got weekly phone calls to help understand debt, budgeting and a few other spending mistakes. I hope it takes this time I don’t really understand how people get so deep in CC debt, but I know they do I’ve never ever paid a dime interest on CCs. Just pay them off monthly. I look at them as convenience cards, but use them like cash. If money isn’t in bank, I stop spending |
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One important thing to understand. If you settle the debt for less than the full balance owed, the IRS will consider it income. The financial institution will send a 1099-c and she will have to pay taxes on the amount forgiven. https://www.experian.com/blogs/ask-experian/tax-implications-of-settling-debt/ |
| Friend did that..essentially they let them go into delinquent status, very late, like a year or more of no payments, then offer settlement to pay them off at 50,%, 25% of actual owed amount. I guess they take what's offered, as they hint its that or zero / bankruptcy. Iirc she owed $50k and they settled for approx $14k |
Traditional values and god built every free, successful first world country, abandoning traditional values is degrading them, and embracing toxic stupid dipshit liberal values will absolutely destroy them, safety and freedom.
| Dave Ramsey up on YouTube. She has to get to the point that she never borrows again and then pay off as quickly as she can. Garage sale, facebook sell, cash in some investments, whatever she can do to get money to pay off the debts. She needs a behavioral change or she’ll end up right back in debt. |
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Originally Posted By GlockPride: She needs a behavioral change or she’ll end up right back in debt. This. You need to sit down with your mom and figure out where the money has been going. Best case since she owns her house is that the expenses for utilities, HOA, taxes, insurance, maintenance, etc. have become too much and she just needs to downsize. Worst case(s) are she's been shopping for stupid shit on Azn or she's even getting scammed. |
Heller II - Challenging DC's bans on semi-automatic rifles, large-capacity ammunition feeding devices, and its onerous and expensive handgun registration process. http://www.HellerFoundation.org/
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Originally Posted By Bubbles: This. You need to sit down with your mom and figure out where the money has been going. Best case since she owns her house is that the expenses for utilities, HOA, taxes, insurance, maintenance, etc. have become too much and she just needs to downsize. Worst case(s) are she's been shopping for stupid shit on Azn or she's even getting scammed. We're working on it. She had to help support some family members who are now back on their feet. She's not living lavishly, I can guarantee that. |
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Originally Posted By jos51700: We're working on it. She had to help support some family members who are now back on their feet. She's not living lavishly, I can guarantee that. I think there are a couple of the very common patterns we can already see here. First, mom is not accurately keeping track of the money that comes in and the money that goes out. Just simple budgeting, on a monthly bases. People that do that don't give away $17k they don't have. Second, people mom didn't "have to" help some family members. She chose to. You can take the spending of people who end up in this sort of situation and sort it into categories. There's the obvious ones like "really expensive car", "too much house", "eats out every meal", "spends $800/week on uber eats", "too many vacations", and those sort of categories that are fairly obvious. There is also the "gets a dopamine hit from giving a way money and presents to other people" which is pretty popular. Mom spends money she doesn't have on gifts, or flat out gives money away, then gets a warm and fuzzy feeling inside that she's a good person. The problem is, she wasn't giving away money that she had worked for or earned in any way. There isn't a whole lot of virtue in it when you realize she was just taking money from the bank and passing it out like it was her own, then patting herself on the back. She also got the sugar rush from the dopamine hit. Now she needs to go out and earn it. Work to earn all that $17k and pay it back. Only after she's earned it is she allowed to feel good about it. The same sort of exchange happens between simps and the e-thots. And between strippers and the guys that think they're the stripper's boyfriend. It also happens sometimes to people on live video streaming chat things like on twitch. They give a stranger a big "tip" and get a high. Then they get addicted to that feeling, and keep doing it past the point of being able to afford it. Its not as wholesome when you look at it that way, but its the same exchange going on with mom here. Giving away somebody else money to somebody, acting like its your own, and getting a good feeling from it. Hell, that's the government's/democrats/communists entire playbook. 
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Originally Posted By jos51700: We're working on it. She So, now she needs help getting back on her feet, because she chose to fall off her feet to save someone else from dealing with their own problems. |
I think the hardest thing for good LE working for good agencies to really absorb is that there are whole departments full of exactly the complete fuckheads we rail against here. - vectorsc
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Originally Posted By jos51700: We're working on it. She had to help support some family members who are now back on their feet. She's not living lavishly, I can guarantee that. How about those people she helped now return the help she gave them? |
"It behooves every man to remember that the work of the critic is of altogether secondary importance, and that, in the end, progress is accomplished by the man who does things."
Theodore Roosevelt
Theodore Roosevelt
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Not sure of the laws in your state... PA has the archiac law that requires the creditor to produce an original document with the borrowers original signature on it. If they cannot produce the document, the debt is invalid. Few states do this, I'd consult an attorney... |
Another old guy
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Originally Posted By ColtRifle: How about those people she helped now return the help she gave them? ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ THIS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ |
Heller II - Challenging DC's bans on semi-automatic rifles, large-capacity ammunition feeding devices, and its onerous and expensive handgun registration process. http://www.HellerFoundation.org/
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Originally Posted By ColtRifle: How about those people she helped now return the help she gave them? and her age is not mentioned At a certain age, one's credit score and the ability to borrow money become pretty unimportant and irrelevant. A friend's mother in late 80s got suckered into all sorts of CC debt. For example, he said she had something like 4 or 5 simultaneous "auto repair insurance" scams going at once, plus numerous other scam charges. Hundreds of dollars every month. Friend disputed charges with CC company, CC company sided with scammers (Discover is rather notorious for that), friend took cards, tore them up, told CC companies to piss off, ignored all contacts about it, changed his mother's phone. |
Feb 2025 It’s 48 to 0 and we’re only 2 minutes into the first quarter
trobertson5-0 I wasn't put in jail for what I did. I was put in it for what I think. There were FBI agents posting in my threads. I've seen the discovery showing this.
trobertson5-0 I wasn't put in jail for what I did. I was put in it for what I think. There were FBI agents posting in my threads. I've seen the discovery showing this.
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Originally Posted By jos51700: We're working on it. She had to help support some family members who are now back on their feet. Originally Posted By jos51700: Originally Posted By Bubbles: This. You need to sit down with your mom and figure out where the money has been going. We're working on it. She had to help support some family members who are now back on their feet. When my mom started getting forgetful we set her finances up so that bills were auto-paid and her SS and retirement checks went into her checking account. We added my brother's name and mine to her bank accounts to make things easy. We'd log in online every so often and anytime her checking account balance got larger than needed we'd transfer a few $k into her savings account. We lowered her credit card limit to just a few $k also. That way the worst she could do is needlessly spend a couple month's income and rack up a few $k on her credit card. |
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My understanding from Crown Financial is that these things can work. The problem is that often it helps people making poor financial decisions... To keep making them. I. E you mom may consolidate current debt... While feeling the ability to add some new debt. The general thought is.. if you can't control spending money you don't have... It might not make sense to avoid the hard lessons as early as possible. |
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I have used Credit Guard of America. They were actually quite helpful. They consolidated my debt into one payment. They actually told me to keep paying my debtors until a certain date. Then I just made one monthly payment. It actually helped my credit score and went a long way to helping me long term. They also provided a counseling service that helped me budget and gain some financial literacy. I know, I know..........it goes against what GD "just knows is true" so it must be false........yet..........here we are. 🤔 |
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