I was in over my head with unsecured debt. I called Consumer Credit Counseling Service - a very legit company. I did not qualify for them because my student loans look like a 2nd mortgage and my debt to income ratio was too high.
A colleague recommended I talk to Square One Debt Settlement. SODS said they COULD and DID work with my creditors: Bank of America, American Express, and Capital One. And - holy cow, could I be so lucky? They would take me as a client.
All I had to do was get on a believable (compared to my normal payments to creditors) payment plan for 4 years. Much like a debt consolidation company. Then I would be debt free. I was so excited when I signed all the paperwork and started making payments.
Okay, here is the mea culpa part. I did not read the pages and pages of fine print. I'm not financially savvy (hence the debt problem to begin with...) I should have talked to smarter financial people before jumping in. However, I was embarrassed with my situation. I think I'm bright enough, yet I found myself with excessive unsecured debt. So after multiple conversations with the guy at Square One, and without talking to outside parties, I signed.
Fast forward 5 months. I have now paid almost $5,000 to Square One. I've been harassed non-stop by creditors who all insist they NEVER work with debt settlement companies. Uh oh. Then the legal documents start to show up saying I'm being sued by Bank of America for not paying. I called Square One and asked how much I had in my account. I had paid off their fee of about $4200, and I had some excess cash in the escrow account or whatever they called it. I had enough to pay off Capital One, and I asked them to do that. When I asked what to do about BofA, they said, don't worry, you're a small potato and they won't really go after you.
Finally in utter embarrassment and humiliation, I asked an accountant friend to look at my contract and the whole situation. Once she got over the fact that I really didn't get it, how bad the situation was, she agreed to help me out of it.
I tried to cancel my contract with Square One. It took 45 minutes on the phone arguing (except when they mysteriously put my on hold for 22 minutes) with the accountant helping me argue points with them to get the contract canceled.
I had been talking to creditors who asked: Why didn't you come to us directly? I didn't realize I could. But by the time I got out of paying my monthly lump sum to Square One, it was too late. All interest rates had gone up above 25%. I had hundreds of dollars in late fees. And the principal had increased too significantly.
After talking to more financially wise people, I decided to file BK. I can barely even write that, I'm so ashamed. I've been late repaying debts before, but I've never just said, No, I'm not going to pay what I agreed to pay. If I had paid the $5K to my creditors and asked them to work with me, I'd be okay now. I'd be on a payment plan with them to get back on track.
I absolutely have to take some responsibility here first for getting into excessive debt and then second for not reading the details of the contract - for signing when I didn't really understand how the program worked. But my gosh, the guy Brett I kept talking with at Square One assured me this was a legit way out. And I believed him. On December 18 I'll stand in a public federal courtroom and declare bankruptcy for anyone and everyone to see. If I had not gone down this horrid path with Square One Debt Settlement, I would still be making monthly payments to the companies that extended me credit in good faith (and in a totally different financial climate...)
Please do not follow my foolish steps and sign up with Square One. You CAN work with your creditors. Maybe at first they'll say no because they want their full payment, but keep at it. Be persistent. Let them know what you can afford so you don't end up having paid THOUSANDS to this company that does nothing (by the way, they did NOT pay off my Capital One card as I asked) but ruin your credit and get lawyers hounding you to pay what you cannot afford. If only I hadn't been so prideful in the beginning and had asked someone who knew stuff about financial matters... Don't make my mistake with Square One Debt Settlement.
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