My sister is looking for Debt Counseling suggestions

Long story short, my sister and her husband have maxed out three credit cards to the tune of $35K and are now only able to make the minimum payments and it is stressing them out.

They have some modest money in investments but do not want to touch their “nest egg” tosolve this problem. She has asked me to help her research options, mainly debt counseling. She would like to find an honest counseling service that would help her with debt reduction – hoping to pay only some fraction of the amout instead of 100 percent.

Can anyone here give her a path that make sense? She would love to have actual company names and phone numbers to get it started. Any personal experience would be most welcome. She is in the Los Angeles / Orange County area.

Thanks for the info on Greenpath, we will look into it, it sounds like
a good option.

I recommend you either negotiate directly with your creditors or hire a
debt settlement company. One I am involved in that I think is honest is hhs.gov and they are located in Texas.

When I lived in Orange County I also had a similar problem and found
this place.

They gave me an honest assessment (they couldn’t help me) and some
good tips for saving money so we could put more towards debt. There’s
lots of places out there, but she should start with non-profit credit
counseling agencies, I think, before paying for any kind of service.
It seems like people have had mixed results, and you have to research
places carefully. Tell your sister good luck!

I am the original sender of the message, asking for help for my
sister. I just called Total Debt Services in Plano Texas and educated
myself a bit.

Here is a thumbnail of what I learned:
Based on my sisters situation, she owes three cards $35, 000

  1. Sign up with the “company”
  2. Open a special bank account, with the companies help.
  3. close the credit cards in question
  4. let the acccount go into default
  5. let the account go to a collection agency
  6. my sister’s FICO score will go into the toilet, for a few years
  7. start making monthly payments into the special bank account
  8. the “company” will start to have talks with the credit cards
  9. the company will establish a settlement with credit cards
  10. with the clients approval the company will take money out of special
    account and pay settlement
  11. some years later my sister’s FICO score will improve

Maybe I forgot some of the steps but that is close.
Credit cards will not settle for less money until you can no longer
make payments, then they might expect that they will settle for less
money instead of none.
A friend of mine says that some credit cards will sue the holder of
the card for the debt.

Hope that helps.

Let me know if you want more info