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Collection Rep Tried to Steer Me Away from CCCS Agency! Why?

For signed up for a debt management plan through a consumer counseling agency in January 2013. For 2 years I made consistent monthly payments. In Fall 2014, my transmission went out and I still owed on the car. I did not have money for the transmission repair, so I had to find a cheap rental car from a mom-and-pop operation as alternative transportation, have my car towed and pay a money storage at a parking garage since I could not leave a inoperable vehicle parked in the city streets, and still have to pay for car note. I had to place student loans in forbearance. To make it short (too late), I was screwed.

Although I was nominally on the debt management plan for most of this year, I kept falling further behind. This Fall, I contacted the credit counseling agency regarding the possibility of establishing a new payment plan. They told me that the criteria are established by the credit card companies and made no effort to negotiate a new payment plan. This prompted me to start looking at other credit counseling agencies.

I am completing the process of signing up with another credit counseling agency. The projected payments are lower, if only because my debt is lower than when I first signed up with my original agency.

As part of the process, I needed to get updated records on the balances on the cards. I had recent statements for all creditors except American Express, which stopped sending statements after I signed up with the original payment plan. When I called to find out the exact balance, I was referred to Zwicker and Associates.

Zwicker does not own the account, but performs some of American Express’ debt collection and legal functions. I got the balance, but not without some hardball tactics to get me to pay them that night.

The representative I spoke with was very anti-consumer credit counseling agency. He said they would not work with a credit counseling agency and would only work directly with me. He questioned me as to whey I would want to pay somebody else to pay them, when I could do it directly. I told him that it would be easier on me administratively with the # of accounts and the accounts I had. Then he said their attorneys were working on my case earlier that morning and would file a suit in my state to garnish my wages if I did not pay directly through them. I had already told him I did not have money to pay the terms he was asking for, so I told him I need to “check around” to see if I could get some help from family. He gave me a deadline of 8 AM the next morning to respond back.

The conversation with the Zwicker rep was very upsetting, but I did not let him affect my plans. At this point, my only options are trying to re-establish a new debt management plan, trying to do debt settlement, or bankruptcy. I already had it in my mind that bankruptcy was a last option, but I would do it if anybody tried to come after me through the courts. After getting off the phone, I reported the balance on the AMEX account to my new credit counseling agency. They finalized and sent out proposals to the card companies the next day, which are pending. The car is still disabled, but I have miraculously paid off the car note. If the new DMP proposal is accepted, it will open up $400/month in my income and really take a lot of strain off my financial life (although I still have to be fiscally prudent).

Does anybody else have experience with such agencies like Zwicker (an agency that performs some collection functions, but does not actually own the account) trying to steer people away from credit counseling? Given that the account was still with the original creditor, I was very suspicious that Zwicker was trying to pressure me to pay through them so they would not be squeezed out of some of the money. There were so many red flags in my conversation with the rep like the next day 8 AM deadline, which I suspected was done so I would panic and pay them something, before consulting with any financial or legal advisors about my rights. Of course, the next day I learn that most courts would not issue a judgment against you if you are making monthly payments or other reasonable efforts to pay off the debts.

Hanging on the cliff but reluctant to make a move

I got myself in a pretty good pickle, and I’m starting to realize it may be more of a pickle than I thought. I had two credit cards one with $10K and one with $8K. With the higher electric bills and other raised expenses I was just making the minimum payments to keep me in my monthly budget. Chase raised my rate to 29% soon after that payments started being made late then Bank of America raised my rate to 31% from 0% for being 3 days late. I decided I needed help so I tried for a home equity loan to consolidate the two high interest cards. My credit score has dropped from 780 to 530 and i have only owned my home for 8 months so I had no luck with lenders. I have been considering a CCCS but have been reluctant after reading the posts to this group. I did manage to acquire a new credit card through USAA who only deals with military persons, ($10K limit) and was able to transfer the $8K/31% to the new card at 0% for the life of that transfer. I’m expecting a raise after the new year and the wife is in search of employment which will help in the future but for now I’m getting deeper and deeper. I’ve read this statement in an earlier post :

****** “But I stand by my original statement that if you can afford a CCC then you don’t need it as there other programs out there that can do an even better job.*******

I would really like some info on these programs. I am in the military so bankruptcy or debt settlement would do more damage than good for me ( separation from service due to fiscal irresponsibility). Can anybody out there steer me in the right direction???

First suggestion: Contact the executive offices of the credit card companies and see what you can negotiate with them. To get those offices look up the companies at www.bbb.org the better business bureau website. You can also file a complaint with the bbb over their abusive interest rate practices e.g. raising a credit card rate from 0 to 31% for being 3 days late. Also check out Scott Bilker’s site www.debtsmart.org. And also ask the military if they can help you. Good luck to you!

I have read your post, and the response from Ben. Ben makes some good suggestions, but factually they will not do much for you as you are in the military.

And you are right debt settlement and bankruptcy are out of the question for you. I was in the military too so I know from first hand what financial situations can do to you ( I once bounced a check and they put me on extra duty for a month.)

I was in the Army and I know that they do have programs that can assist, but I don’t know about the other Aremed services, but If the Army has them then there is a good chance that the Navy, Marines, Air Force and/or Coast Gaurd have them as well.

And thank you for quoting me about “if you can afford a CCC then you don’t need them.”

Write back if you have any other questions. There may be other options as well which I could tell you about if you let me know a bit more about your situation.

Does this help you at all? Let me know.