a bit over a year ago, I went through debt consolidation. I signed up with a company that offers me a monthly payment to kill my credit cards and provide me legal representation should I need it. It’s been about a year since and they have only shut down some of them. There are 1 or 2 still left open.
I was told not to make any payments on the cards. Let them complain and threaten with collections. This will let the debt consolidators buy the debt for cheap if the credit card companies refuse to close the cards. They have been tanking my credit for months and they aren’t closing my cards.
Now I’m in a bad place financially. I lost the job I had at the time I went into consolidation and the current one isn’t paying as much. I’m not missing any payments but it’s trapping me.
I may need to leave my state for some place safer soon. But I have such a poor credit score now that I cant imagine anyone renting to me now.
Debt consolidation feels like it was a scam.
Should I declare bankruptcy and start over?
Bankruptcy is an option. How much debt do you have relative to your income?
Missed credit payments hurt your score for a while (7 years iirc) but bankruptcy hits is HARD and will stay on your report for 10 years
Another option is litigation. I’m not sure if someone would take this on as a contingent fee case or not (edit: in a contingent fee, you don’t pay up front, you pay with your winnings. Very common for injury, workers comp, etc). If not, you’d need to seek out pro bono help, which is certainly available, especially if you’re in a city.
Edit: to clarify, I mean litigation against the debt consolidation company for a potential breach of contract