2/1/2011 8:17 AM (PST)

What would you suggest I do to get out of these debts. My husband passed away and left me in a financial mess. My credit score went from the700's to 499. Without his income has really hurt and I'm tired of struggling. Also I modified my mortgage loan with Chase and they said they had to report to the Credit Bureaus it as a negative on my credit, even though I had never been late on my payments or missed any. I'm just looking for some relief. If you have any suggestions I surely would appreciate any and all of them. Thank you for your help. Janiegirl.

2/1/2011 1:31 PM (PST)

Regarding your debt situation, I would start your journey with a call to a reputable nonprofit credit counseling agency that will identify and explain your options, which may include a debt consolidation plan or even bankruptcy. The counseling session will be FREE. The National Foundation for Credit Counseling's direct agency referral number is 800-388-2227. This will connect you to a reputable, accredited agency in your area. Don't fall for "debt settlement" schemes, which may also be marketed as “debt consolidation”. We encourage you to read some articles about debt settlement that we have posted on our Facebook page, at www.la.bbb.org, and on the FTC website. Here are some for starters:

NEW LAWS GO INTO EFFECT TO FIGHT DECEPTIVE DEBT RELIEF:
http://www.la.bbb.org/GIReport.aspx?NewsID=295

WHAT THE FTC RECOMMENDS FOR SETTLING YOUR CREDIT CARD DEBTS:
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre02.shtm

Good luck - getting out of debt is no picnic and it's a shame that so many "cures" become worse than the disease.

2/1/2011 1:35 PM (PST)

Regarding your question about credit reporting for loan modifications – this is a big mess of confusion, errors, and inconsistent practices. A lot of lenders previously reported these modifications as paying under a “partial payment plan”, because that was the only code available up until November of 2009. Partial payment is seen by the FICO algorithm as a serious delinquency. In November 2009 the credit reporting industry created a new reporting code that enabled mortgage lenders to report on HAMP loan mod customers without lowering their credit scores. On credit reports, this code reads as “modified under federal government plan”. HAMP stands for Home Affordable Modification Program. I’m not sure if individual banks are following the proper reporting protocols however. Here’s what the government HAMP website says about credit reporting and loan modification:

http://www.makinghomeaffordable.gov/borrower-faqs.html#35

“34. How will the HAMP modification affect my credit?
Accepting a loan modification can affect your credit score, but the actual effect will depend on a variety of factors. For more information about your credit score and how to improve it, visit www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm.
Each month, servicers must describe to the credit reporting agencies the exact status of each mortgage. If you are current with your mortgage payments prior to the trial period and you make each trial period payment on time, your servicer must report you as current and also identify the loan as “modified under federal government plan.”

Make sure you review your credit report and make any corrections to incorrect or stale derogatory information in it. Take a minute to read this report from the LABBB on what you should know about your credit report and disputing errors (by the way, just cut and paste all of the links mentioned in this response into your browser):

http://www.la.bbb.org/GIReport.aspx?DocumentID=165

3/26/2011 5:20 AM (PST)

I've come across a list of companies that will guide you in this regard. Go through the link and identify the different factors that you should count while picking your debt consolidation company. http://www.debtconsolidationcare.com/ranking-chart/

6/4/2011 4:37 AM (PST)

You may try negotiating with your creditor on your own and set up a repayment plan. If it fails, you'll need to choose a credible debt relief company. While choosing a company, you'll need to check out their accreditations. You may also read through their user testimonials to get an idea about them.