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debt consolidation fucked me, now what? (lemm.ee)

submitted 4 days ago by [email protected] to c/[email protected]

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a bit over a year ago, I went through debt consolidation. I signed up with a company that offers me a monthly payment to kill my credit cards and provide me legal representation should I need it. It's been about a year since and they have only shut down some of them. There are 1 or 2 still left open.

I was told not to make any payments on the cards. Let them complain and threaten with collections. This will let the debt consolidators buy the debt for cheap if the credit card companies refuse to close the cards. They have been tanking my credit for months and they aren't closing my cards.

Now I'm in a bad place financially. I lost the job I had at the time I went into consolidation and the current one isn't paying as much. I'm not missing any payments but it's trapping me.

I may need to leave my state for some place safer soon. But I have such a poor credit score now that I cant imagine anyone renting to me now.

Debt consolidation feels like it was a scam.

Should I declare bankruptcy and start over?

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[–] [email protected] 2 points 4 days ago* (last edited 4 days ago)

Debt consolidation feels like it was a scam.

Sometimes the medicine is worse than the cure. This is true for bankruptcy as well.

If you detail your income, fixed expenses (rent and groceries, not eating out), and debts, we can pit together some best and worst case options to see if maybe bankruptcy will be a good move. Just remember that bankruptcy will completely screw over your credit for a long time, whereas cleaning it up could rescue your credit much quicker.

For anyone else, generally avoid debt consolidation. You can do the same thing they can, and usually much cheaper.