Everything I have explained today is for people who simply cannot pay off their debt. They have already fastened their belts and exhausted everything else.
Many people turn to seeing credit repair as the only possible solution. They are not. I have never hidden my disdain, because it seems to me that companies are for the use of debtors. They accuse us of doing little, and we use deceptive advertising.
What happens when someone pays?
First they try to charge the banks, although they do it very badly. Few borrowers come forward to look for a win-win situation. If anything, they offer a personal plan with a high interest rate and no possibility of prepayments. Of course: with the lower monthly.
When the loan is more than 90 days past due, it falls into the past due portfolio. At that time, read, the banks have to recognize the loss in the event. Stop things. That doesn’t mean the debt expires or stops being collected.
So, since he had already had to write that money to the banks, any recovery he can make will represent income. Some try to continue collecting but sooner or later, they all end up auctioning off their portfolio (the right to collect debts) to collection societies.
Those who buy these debts owe about 10% of the money. Their business is how much they can charge and thus generate profit. For this they use different techniques: sometimes more sharp, sometimes more ferocious. In some cases, when the amount owed is very high, they could demand it through the court.
Some of these companies make calls and others offer letters for you to pay the debt at a significant discount. The first offers come with a small discount, but if you are patient, sometimes a discount of 70% or more (depending on the amount of debt, it can be more or less). In order to make a valid offer, one must pay for what they are offering.
Credit repair companies don’t really do much. They ask us how much we can “save” (save) each day or month, and they open an account managed by them, usually managed in SOFOM, so that we can deposit there. Every month they collect their commission from there.
When public offerings come in, they see how much money is in the account. If it is reached and the offer is within the acceptable range, they will cancel the debt, subject to a commission for “success”. So until everything is paid off. Not really to deal with. The collection of calls did not decrease.
That’s why I don’t think they need it. Their commissions, if they do the math, are very high for something we can do ourselves. On the other hand, if someone has already signed up and regrets it, the penalties for the release are too burdensome (besides the time and frustration of having to use them to return the rest of the money to us).
With or without reparations, for someone to pay their debts, this will reflect our faith in the history of the bureau. The same is true when one is drawn to a discount (represents the breakdown of the financial system).
Some repairers say that it helps to “clean your desk” afterwards – which is also misleading because you can’t do it. What they do is offer us a credit card granted by a related company (or partner) to show the bureau that we are paying. But the previous records are not deleted until the legal deadlines are met (there are others, but the most common is 6 years after the payment or the last move you had);
