CCCs have a very bad habit of not paying the creditors, either in part or in full, every month. This puts you behind, and as you found out, you the customer never find out until it is too late.
Some basic education on CCCs.
- They are a company trying to make money just like any other company. They may call themselves “non-profit” but that is not accurate. It only means that they have different accounting procedures than “for-profit” companies.
- Factually, there officers make hundreds of thousands of dollars a year ($300,000-$500,000 typically). Trust me they are making money…hand over fist.
- Just because you are on a CCC does not mean that your creditor will accept you on the program. More and more credit cards are actually refusing these programs.
- Currently, there are only about 70 or so approved by the IRS CCCs. This is out of thousands.
The reason for the low numbers is because the IRS is now cracking down on these companies because they are performing their duties as they are supposed to by law. Most just sign you up…whether you factually need it or not…and never perform any counseling at all.
So check with the IRS before you sign up with any CCC to learn if they approved. If they are not then don’t use them.
3) Collection agencies WILL NOT work with CCCs period. You are better off trying to settle the account.
This company is a tough bunch. And if they said what you have said they said then they are on the boarder of illegal actions. Yes they can garnish wages, but they have to attain a judgment first, then wait a period of time to get the garnishment judgment.
Also, no legitimate company will ever threaten a law suit verbally. IT WILL ALWAYS BE IN WRITING. So if they say that then it is usually just a scare tactic. Don’t too much thought into it unless you get something official in writing.
If you have an actual compliant about the collection agency, then complain to the FTC, State’s Attorney General, BBB, and to the original creditor. That should put a stop to that.
Also, collection agencies are regulated to a degree in some states. You may want to check into whether your state has bonding or licensing laws and if they have followed those laws.
4) If you can afford a CCC then truthfully you don’t need one.
There are other programs out there that can do a much better job, protect and improve your credit, lower your effective interest rate to 1,2, or 3%, and recapture that lost interest into wealth building programs.
I hope that this helps. Best of luck to you.