Social Question

nzigler's avatar

Where can I find trustworthy debt counseling?

Asked by nzigler (1314 points ) November 1st, 2009

Flutherites,
Please take a second to read my problem.

My girlfriend has student loan debt and it’s significant. For the first time in her life she has a decent job and now she wants to start paying the debt off. We probably want to explore debt consolidation, debt negotiation, payment plans, etc. – or some combination thereof, to make her debt manageable and begin paying it off.

What I’m looking for:
1. If it’s important to use a local business, we live in Los Angeles.
2. We want a non-profit, government or para-government office, or some other organization that we can TRUST and WILL NOT charge a fee up front before results are obtained.

I’ve never had debt like this so I don’t know where to start. She wants to make good on what she owes but we need to get the debt dialed back and then start a payment plan that she can afford to keep up with.

Thanks for your thoughtful replies!

nzigler

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16 Answers

trailsillustrated's avatar

dave ramsey.com click on “elp” (endorsed local provider) for debt counseling,also everything you need to know about handling debt and preparing for your financial life is here.

nzigler's avatar

@trailsillustrated thanks! but it looks like my ELP options are: Real Estate, Insurance, Tax, Health Insurance and Investing. I’ve yet to find the debt counseling stuff.

trailsillustrated's avatar

oh, um try looking at financial advisors? student loans usually won’t negociate, if that’s your only debt the best thing to do is throw as much money as you can at it, after expenses, and get it paid off.

trailsillustrated's avatar

http://beta.daveramsey.com/articles/article/articleID/the_truth_about_debt_consolidation/category/100347/ just to have a read. I hope this opens, and is not too annoying. good luck I really feel for you. ps I skip over the religousy parts but it’s good info

nzigler's avatar

Thanks @trailsillustrated. I was reading some of it. I think he goes over impt basics but she needs someone who can get involved. They weren’t willing to negotiate much and we are tight on resources and want a professional to evaluate our options. I’ll keep checking the site out though. Thanks again.

Supacase's avatar

I would suggest Consumer Credit Counseling Services. I believe the are now owned by or merged with Money Management International. Both are non-profit. I used to work at CCCS and can assure you that it is not a scam.

Although they do not handle student loans, they will do a credit counseling session and set up a budget for you at no charge. They also have resources to refer you to when necessary. Unfortunately, my understanding is that places specializing in student loan negotiation are expensive and often questionable. A reputable company should be willing to counsel you and give you an action plan proposal before they charge you anything.

Student loans present a problem. They are not even covered in most bankruptcies. Can your girlfriend speak with her lender and see if she can get on a program of paying interest only for a couple of years, then gradually stepping up the amount. The idea is she will be more established and making more money by the. The usual 10 years to pay off a student loan can be stretched to 20 this way. The downside is, she will end up paying a lot more in the long run.

PandoraBoxx's avatar

You will want to pay off the unsubsidized loans first, while making the interest payments on the subsidized. I would meet with the bank, and figure out what the options are. Whatever it takes, do not be late for a payment, or the rates shoot up to 15% or more.

www.mint.com and www.fool.com are good places to look for guidance. On a local level, I would start with your bank. Banks offer all sorts of financial consulting services, and want to build a client relationship with you.

As grim as it sounds, frugality is key when attacking student loan debt. This means doing away with things that you may consider a “necessity” such as cable or internet access at home, an iPhone, eating out or going out with friends. Even eating lunch out everyday at work can mound up to a $200 a month expenditure. It might also be a good idea if she can sound out relatives to pay off the loans, and allow her to pay them back on a fixed payment schedule.

nzigler's avatar

Thanks @Supacase and @PandoraBoxx !

Unfortunately, all her debt is student loans. I guess we’ll start with the bank and see what they can do for us. The folks she spoke to on the phone (collections, I assume who now hold her debt) were unwilling to negotiate though.

dpworkin's avatar

If you, or someone you know has access, Consumers Union has good advice about whom to consult.

PandoraBoxx's avatar

@nzigler, there are two types of student loans: federally subsidized and private lender student loans. Both types are student loans. Which does she have, and how much of each? Most people have a combination.

PandoraBoxx's avatar

This is on a med school site and is helpful as background information.

nzigler's avatar

She got pel grants (?) and used them but also took out private student loans which are now the source of her debt.

So, I guess we’ll go to a bank and see what kind of student debt consolidation they can offer?

PandoraBoxx's avatar

The private student loans are hell. Once you start missing payments, you get escalated rates.

Check out this page which gives some guidance about refinancing private loans, and lists some programs. It’s really important to stay on top of these payments. As soon as your credit score starts to fall, the rates go up, and your ability to refinance goes down.

The ideal situation is to live at home after getting a job, and paying your whole pay check on loans for the first two years.

Judi's avatar

Consumer Credit Counselors is the company that is non profit and has been around since the olden days (at least the 70’s if not before.) I don’t know if I would trust any of those other companies.

YARNLADY's avatar

I second the fool.com there are many excellent articles on that site. The more information you find on your own (online), the more comfortable you will feel with the counselor you choose.

Austinlad's avatar

CCCS Ohio. They worked miracles for me.

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