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Where are good Credit Unions & Credit Card consolidation
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4/29/2010 8:50 AM (PST)

Has anyone had experience with credit card debt consolidation and credit unions in the Chicagoland (Illinois) area? Have you found a reliable one?

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4/29/2010 9:53 AM (PST)

Joy,

Credit card debt consolidation is a tricky industry and there are many companies that are scaming unsuspecting people in economic distress.

There are many reasons why the debt settlement industry is under scrutiny by the FBI, Secret Service, State Attorney Generals, and other financial crime regulators. This industry is rife with companies using predatory fee models and deceptive advertising. Don't fall for the ads that are all over television: they are produced by slick third party lead generators and oftentimes if you call the phone number you see on TV you will be speaking with the lead generator who will screen your call for distribution to any referral receiver who will pay. The FTC’s proposed rules will shut down the industry as it stands today - for good reason.

Have you tried a nonprofit credit counselor? Check out www.nfcc.org to be connected to a local accredited agency and also check out their "Debt Settlement Consumer Alert". Their national hotline is 800-388-2227.

Check out the article on debt settlement posted in our "New Scams" section before you do anything, please. The article provides some in-depth info on this industry and you should be aware of the proposed rules on fees and disclosures that the FTC is considering for the debt settlement industry.

There are several BBB's in Illinois, here's a link to locate a BBB nearest you:
http://www.bbb.org/us/find-a-bbb/

Thank you.

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4/29/2010 9:54 AM (PST)

Agreed with Mari. The BBB has had extensive experience with debt settlement companies, and it's all bad. They advise clients to stop making their payments--the idea is to mislead the creditors into thinking you're destitute, and this leads to tons of problems. As you can imagine, if you stop paying your bills, the creditors turn the account over to collection agencies and file suit against you. People who use these programs wind up in much worse shape than when they began. Most owe more money and often they're forced to file bankruptcy to stop the lawsuits. Needless to say, they almost never recover all the fees they pay the company. You may also want to try contacting a Consumer Credit Counseling Service in your area.

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