Hi guys,
With all of you knowledgeable people, I hope to gain some clarity.
Sadly, I have accumulated a significant amount of credit card debt that I am currently unable to pay off. I have been making minimum payments and dealing with high interest rates for months now.
I have decided to apply for a personal loan in order to pay off the debt and then repay the loan at a lower interest rate. I applied with Silverlake Funding, but unfortunately, I was declined due to a low credit score and other red flags.
However, they did offer me something called "Debt Modification," which they claim is not bankruptcy or credit counseling.
Essentially, they would consolidate all of my credit card debt into one account, and I would make payments to pay it off over a period of 3-5 years.
I would only need to pay the amount owed without any interest payments, and they would also reduce the total amount owed by a few thousand dollars. The payment would go into a FDIC insured escrow account, to which I would make monthly payments.
Additionally, all of my credit cards would be frozen until the debt is fully paid off.
So, my question to you all is: Is this a common solution for someone who has no other means of paying off their debt? Will this cause the banks to close my accounts (both credit and checking)? Is there anything else I should be aware of?
I would greatly appreciate your input!