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Credit Counseling and Debt Management
I said this would never happen to me, but here I am with exhorbitant credit card debt. Periodically I receive cards in the mail from companies who say they can lower my debt. A friend of mine is doing this for a $60,000. debt. They are charging her a $9,000.00 fee. That sounds like a lot, but I have no idea about these things,. Any info, recs would be appreciated. anon
Hi: I have a credit card that I have been paying of for a long time. It was my ''emergency'' credit card but now with the way things are I've used it more than I should have. My debt is past $7,000 now and given my new situation I think I can no longer afford to pay the card with the minimal balance I have. I was considering contacting a debt solution company but I don't know if they can help.
Can you give me your experience with a debt consolidator? debt consultant? I am not sure what they are called. Were they able to really help you or did you think it was a waste of time? AND if they did help can you PLEASE recommend a good one to me? You hear all these ads on the radio but don't know which ones will really help and which ones will just take my money and do miniscule relief.
Thank you! Desperate to get rid of my debt!
Their website is www.moneymangagement.com. It is super easy to sign up through online. Someone will call you to do an intake, you provide creditor info, sign some papers, and you're good to go. good luck!
As a result, my husband began to research the debt solutions market and various options, and decided to start his own business, helping people settle their debt.
Here's what I know about it: there are two basic options you can go with: a debt consolidation company like CCC (Money Management International) or a Debt Settlement company.
Debt consolidation companies won't really lower your monthly payment, and, frankly, tend to work on the side of the credit card companies (many of them are divisions of credit card companies).
Debt settlement companies will negotiate with your creditors to ''settle'' your debt for a fraction of the original amount. This is something that creditors are legally required to do, and you could even do this yourself, although it can be worth it to pay a debt settlement company to take care of this for you if you have many credit cards and a lot of debt, they can often get better results for you, much more quickly.
That being said, if you just have a small amount on one or two credit cards, it's probably worth it to just do it yourself. For one thing, not all debt settlement companies are trustworthy, and some are really expensive, charging high fees (although that pays for some pretty good services, I've found, again, not worth it if you're just working with one or two creditors).
In your case, I think you can probably take care of settling your debt yourself. Just do a little online research with the State Department and check out the resources with United Consumer Advocacy Network. Best of luck! Been there
#1- Look at your debts, use a composition book and write in columns each debt, interest rate, finance fee, suggested minimum payment, and what you paid. Each month add these columns so you can clearly see what is going on.
#2- Pay the least on the lowest interest rates and the most on the highest ones.
#3- As your payment record gets better, you can call them and ask for lower interest rates. Tell them you have a lower rate offer and that you would prefer to stay with them because their collections people were not as mean to you or whatever, ask them to match or better it and they will tell you what they can do,,,call every 6 months and keep getting it lowered.
#4- Look at your other expences. You can drop cable, caller ID, netflix, etc for awhile and have an extra $100 or so to knock em down with. Drawers too full? Have a yard sale..costs you nothing, is fun, and there is cash for the week you can put on the cards.
#5- Take them out of your wallet. If you need to use it for something make it a special event. Use cash and you won't buy a bunch of on sale stuff that will sit in your cupboard while the $ is sittin on your card earning interest for the bank.
I hope this helps. I personally charged my SAHM years and had to pay them back. It takes a long time! You can do it!
Hi all, I can't afford a financial advisor. Basically, we bought a house in the east bay before our house in SF (bought 4 y ago, 100% financing) sold. Then the market took a down turn and it didn't sell. It's being rented, but we recently had to stop making payments on our mortgage, as we simply didn't have the money. It's still on the market and we hope to get an offer for a short sale.
Meanwhile, we also have managed, somehow, to rack up close to $100,000 in credit card debt, much of it at high interest rates (some of it was used to cover closing costs for our new house). We own our own business and it's incorporated, but not enough money is coming in lately as the economy has slowed.
My question is: has anyone used one of those debt consolidation services before? I know it lowers your credit score, but at this rate we'll never be buying another house again, so that may not matter too much. We only have one car, paid for, so we won't be buying another one for awhile, either.
Thanks for any and all experience and advice. And please, we are humbled enough as it is; no 'I told you so's''. Thanks. Super Stressed Mama
My husband and I are trying to get our ducks in a row to buy a house. As if the cost of housing weren't enough, his credit is a disaster. In addition to an old bankruptcy he has had several bills go to collection. We're not even sure what all of these are for. I hear that there are services you can pay to help clean up your credit, but I'm naturally nervous about passing all of this highly confidential information over to someone in this age of identify theft. Can anyone recommend a trustworthy service or person who might help? Thanks. anon
You need to pay down your debt. Contact the lenders and work out payment arrangements etc. Most people are willing to work with you as long as you keep your promises and they see you are serious about paying off the credit. In my case, the bankruptcy had wiped out my debt. I slowly got three credit cards and actually purposely kept a balance on them and slowly paid them off, making payments on time. I also purchased a car with a friend as a co-signer and after making payments on time for five years, paid that off last fall. I have absolutely no debt at this time. Now that my bankruptcy is over 7 years old and I have shown that I am responsible with credit, my credit score is in the mid 700's which is considered very good.
Educate yourself on how credit scores work, and make sure you check your credit reports (from all 3 bureaus) regularly. You can get a free report from each bureau once per year You will be surprised at how many errors can appear on your reports and monitoring them and getting errors fixed is crucial. I did everthing online, after you pull your report, the credit bureaus actually tell you what creditors will think of you when considering your credit. They give you suggestions that help you correct spending habits, or payment habits etc. Another tip is not to keep applying for credit (or trying to get credit). These things reflect badly on your credit/fico scores, also make sure you keep your credit card accounts open, even if they have a zero balanc, this is important is establishing how long you have had credit.
I think I've covered most points. You can do it. Good Luck! Anon
The only other services that are safe to use are the ones that make legitimate claims about your credit. It's a waste of money since you can do it yourself and you'll do a better job than they do since it's your credit and not theirs. They often make mistakes. Whether you do it yourself or not, it's extremely risky to make a claim to the credit bureaus so I wouldn't recommend contacting them regardless whether it's you or somebody else doing it, unless it's something that's glaringly inaccurate (i.e. a mortgage you paid off 10 years ago that's showing up as current and late).
Here's something you should know: Once a debt in collection has been satisfied, it takes 7 years to fall off your credit report. What that means is that if you have debt in collection and you only pay a portion of it each month, the 7 year clock hasn't even started ticking yet. This means that until you've paid it off or had the creditor write off the remaining balance, it's going to stay on your credit report as a pre-7 year item. In other words, it could be on your credit report for 20 years. So my advice is to take care of any unpaid debts in collection first.
I'm going to be honest here, but with the subprime mortgage market falling out and the interest rates going up, you're going to have a hard time getting a mortgage unless you have a ton of savings (around $100,000 or earn an extremely high salary like in the 6 digit range). Unless you're buying in a market where real estate is very inexpensive (not the Bay Area that's for sure), you're much better off renting.
So to summarize:
1) Pay off or settle collection debts ASAP
2) Pay down your regular debt (credit card, car loan, etc.)
3) Pay on time (never be late)
4) Save money each month
One last thing: Be careful with credit counseling (not to be confused with credit repair). Bad services won't pay your creditors on time and your credit will get even worse. Good credit counseling services will pay on time, but you probably won't be allowed to have a credit card at all during the years you use the service. Also, credit counseling will show up on your credit report and for some items, the 7 year clock won't start until you've finished. Know Through Experience
I need help managing my credit card debt and want advice about the best options. Here's my situation: I have 3 mostly maxed out cards, $15000+ debt, 30% interest rates(I have made a few late payments so the rates skyrocketed). I am a graduate student and simply cannot afford $500+ monthly payments, especially when most of it is going toward interest! I have cut up my credit cards and am dealing with my emotional issues around finances. However, I need help with managing this debt, especially because I will be another $75000 in debt after completing grad school (but hopefully making $80000+ a year).
I would like any advice about how to best deal with the debt. I would like to pay it off in less than 5 years, which is next to impossible given my current interest rates. The creditors have refused to lower rates right now. Options I have considered:
--taking out a debt consolidation loan from Patelco credit union (I applied and am waiting for approval). Minimum interest rate is 16.05%
--credit counseling through Consumer Credit Counseling. Have not called yet. Wondering if people have used this service and found it helpful. Could I get better interest rates this way?
--taking out additional student loans at 8.5% and using the $ to pay off debt. sounds like a decent option, but it would mean i have more debt to repay after graduation.
Any advice on my situation and any of the aforementioned options is most welcome. don't want to be in debt forever!
If you go to CCC you will not allowed to take on any more debt. It's a pledge you make to them.
If you take out the loan at 8.5%, that makes the most sense. However, you have to NOT GET INTO MORE DEBT. You'll be tempted to get a new credit card. If you take out that loan, pay off your debts and run up the cards again (which is verrrry likely statistically) you will be in even worse shape. Perhaps there's a financial advisor are someone even at the school who would be willing to act as your agent or counselor to prevent you from getting into more debt.
It can be done, but it's painful no matter how you slice it. credit cards are evil
No, you'd have less debt after graduation. Taking on a new balance at 8.5% to pay off the same sized balance at 30% is not more debt, it's equal debt, and then every day that goes by it is less debt than you would have had, becuase the interest accumulating is lower.
I bet fool.com has good articles and calculators to help you make these decisions. C
I could really use your financial advice. I am a 32 year old female single renter (don't own a home) with $40,000 credit card debt and over $100,000 in educational loan debt. I used the credit card to finance a non-accredited graduate program and to pay for food and an apartment while going to school full-time and working several years for 20 hours a week for free at a counseling center as part of my training. I actually did some extra work just to get by, but it was exhausting to work 80 hours a week between school, internship, and additional job. Most of the $100,000 came from interest on $80,000 in student loans from the doctoral program where I got my masters degree. My credit rating is excellent at 720 and I always pay my bills on time (even if it means borrowing from my 0% credit card), and all of my credit cards are at 0%, but it's a part-time job constantly managing them (about 12 different ones over 3 years). Now my major MBNA card has $30,000 and the 0% APR ends in December 2006. The debt is affecting my anxiety level and makes it hard to sleep. I wish I did things differently (no lectures please), but now it's too the point where I can barely manage to pay my bills. Also, I just finished my doctoral coursework and I'm beginning my dissertation, so it's not like I'm able to completely devote myself to working 80 hours a week, and even that is not likely to pay it all. What do you see as my options? Any creative ideas? Here's what I see: 1) bankruptcy (though I hope to one day marry and buy a house and have kids in the next 5 or so years) 2) Debt repayment service--often charge a high fee and take a long time to repay and typically affect my credit 3) someone suggested this here..find someone who can get a mortgage rate that is low and pay them off at a slightly higher rate than the mortgage? (I love this idea, but most of my friends are grad students and don't own a house). Thank you in advance for any ideas you might have. I am working, but earn about $25,000 a year right now as a counselor. Anonymous
If any of your loans originated with the Ford Federal Student Loan program consolidate with them. They have an income contigent plan. Plus, if you pay consistently for 25 years, they absolve you of the remaining balance. Next, Consumer Credit Counseling Service out of San Francisco have helped me consolidate my credit card debt into one payment per month.
They can discuss with you what your options are and if the best solution for you would be bankruptcy or to consolidate. Their number is 1-800-777-7526. My experience of all the people I've talked with there has be a good one. They are helpful, non- judgemental, never condescending. Whatever you decide to do, it's a great weight off your shoulders just to tell someone everything about your finances. It can be tremendously freeing and is something most of us weren't raised to do. Also, check out Suze Orman's Young Fabulous and Broke. Advice may not be immediately helpful be/c of your limited income, but it's good for a laugh and you may find some passages that are easy to relate to. It's at the library. In a Similar Boat
The fact that you have maintained such an excellent credit rating is great and shows that you are a good person really trying to manage life's priorities.
It is unclear from your posting if you have attempted to get a deferment on your school loans or if you are making payments while you're still completing your education. Regardless, I suggest you contact the lenders on your school loans and request a deferment if possible.
As for your credit situation, contact Consumer Credit Counselors. When I used them, they were a non-profit that accepted donations based upon my ability to pay. They call your creditors and worked out an arrangement. You pay CCC one check and they send the payments to your creditors. Of course, you have to stop using your credit cards.
As for bankruptcy, the laws have changed, and as a result are less consumer friendly, so you should continue to avoid that as an options. With regards to the ''mortgage'' idea, I'm not sure I understand the mechanics of that one. Suffice it to say, you can dig from under this and do well. One of the best investments you can make next to buying a home is getting a college education (with an advance degree to boot!).
Finally, as strange as this may sound, I suggest you set a small amount money aside each pay period, regardles of the amount of debt you may have. Getting into this habit will benefit you tremendously once you've completed your studies and your debt is gone.
Everything will work out and I wish you continued success with your studies!! FP
I gave them all my credit cards, they negotiated lower interest rates with my creditors and I had to promise not to open another credit card account until everything was paid off. I used my Visa Debit card for many years. It took me 7 years to pay it all off but it feels great. The only word of advise I want to give you is make sure they do not report it to the credit companies, meaning Equifax and the likes, that you are in debt management. I wanted to buy a house and when lenders heard I was in Debt Management, no one wanted to even talk to me. They said that if this is on your credit report, it is the kiss of death and worse than a bankrupcy. The funny thing is that mine never showed up on my credit report, so I was extremely lucky. Last year I bought a small condo because my credit score was very high, it sounds like yours too, so try to keep it that way. good luck, and below is the link
http://www.cccsebay.org/ debt free after many years
Does anyone know of a good credit counseling agency in the bay area - in, or around Berkeley? Going through a divorce and need some help getting out of debt. Financially Challenged
I've looked in the archives but don't see this. Anyone have an agency (preferably nonprofit) that can help me clear up my credit rating? Thanks very much. Financially Clueless
We have about $30,000 in credit card debt that we would like to pay off without taking out a second on our home. Has anyone had any great experience with an individual or firm that renegotiates balances? We prefer to write our own checks to banks and not pay a firm to consolidate. We assume Credit Counselling Center (?) (CCC) does the latter. Eagerly awaiting responses
My husband and I have a number of errors on our credit reports, including an infuriating mistake on the part of Discover Financial Svcs, that has significantly lowered our credit ratings. We do not have time to deal with the credit bureaus or Discover on this any further, and are considering using a credit repair service such as Credit Justice Inc. or LexingtonLaw (both on the web). Has anyone used one of these or know whether they get results, or are they just a scam? Can you recommend an alternative? Thank you! Too busy to deal
Has anyone ever tried Consumer Credit Counseling's Debt Management Program? I have two large balances that I want to consolidate. Any comments helpful. Thanks. cd
I was wondering if anyone out there had any advice or recommendations on consolidating my student loans??? We are expecting a new baby soon and I'm deperately trying to find little ways to reduce our monthly bills. I recently received info from the Dept. of Education on this, but when they consoilate they take the adverage of the interest rates of all your loans. This is currently around 7.5%. I was hoping to find a lower interest rate than that, but also find a lender that I can trust. Any recomendations for lenders or ways to get information on this subject would be GREATLY appreciated! Anna
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