What ideas do you have for someone in a bad debt situation?
craigb421 asked:
Probably cant get a loan to pay them off because of my bad credit? My mom has good credit and might help me out though. Still wouldnt even know where to start.
Probably cant get a loan to pay them off because of my bad credit? My mom has good credit and might help me out though. Still wouldnt even know where to start.
My cards are in horrible standing. At this point they are all closed accounts. They want their money in full (or a settled amount). I have a better job now and I can afford to pay 250 a month towards this.
Any debt consolidation ideas; loan ideas; debt-relief programs??!?!?!
Ralph
Tags: Consolidation Loan, Job, Mom
January 4th, 2009 at 5:57 am
Call or write the credit card companies and offer them a settled amount, perhaps 50% of the bill. If they agree, obtain a new agreement in writing and pay them off as best you can.
You can also try going to local debt consolifation offices. Sometimes they don’t charge, but you have to find a reputable office. Check with your bank.
January 6th, 2009 at 12:05 am
pick up the yellow pages and ring the phone off the hooks of the bankruptcy lawyers… talk to them and make an appointment with the one that best appeals to you.
don’t mess with debt consolidation that will just put things off that are inevitable. most debt consolidation fails and you will still have to talk with a bankruptcy lawyer.
i filed and i’m glad… that was 5 years ago.
the lawyer will talk with you about your options and help you get those collectors off your rear end.
this is the only alternative.
sorry.
don’t listen to those who say stay away, those folks haven’t done that route. i have and i’m clean of all my debt and my credit is at a b- rating now.
January 9th, 2009 at 3:13 am
What are you doing between the time you get off work and when you go to bed? You could get a part time job, evenings and weekends. Delivering pizzas usually pays pretty well with tips. Ask your current employer for any overtime or extra shifts you can get.
There is no easy answer. Even bankruptcy is not easy. The services that offer to lower your payments for you, or say they can negotiate with your creditors, are mostly a ripoff, and affect your credit report just like you filed bankruptcy.
The only answer is to raise your income. The best way I know to do this is to work.
Get your bills together and do a budget. I know, it doesn’t sound fun, but neither is being in debt. Cut your budget to the bone and see what you have left. Set aside a small ($500-$1000) emergency fund. This may take a couple of months. Then, while you are paying minimums to all your creditors, pay everything left over to the one with the smallest balance. Do this every month until you have them all paid off, smallest to largest. Then learn a huge lesson from what you have just been through.
Borrowing money from family/friends just prolongs the inevitable. Plus it strains the relationship. Not good.
I have done this. It works. I had $200,000 in debt, and paid it off in five years. You can do this too.
For more advice and encouragement, go to daveramsey.com. He has a radio show and several books that explain in more detail. I do not necessarily agree with everything he teaches, but he did motivate me to get out of debt.
Good luck.
January 12th, 2009 at 7:54 am
Ever heard of Dave Ramsey? He is a wonderful speaker and founder of The total money makeover. If you can’t afford the materials he is on the radio, not sure of times but you could look him up on line. He tells you that you don’t need to worry about credit anymore because you are going to get rid of debt completely and pay with cash indefinitely and you will have the money once your loans and cards are paid off! His rules say that you get an emergency fund saved of $500, you call all of your card companies and tell them that you will do your best to pay them as you can. You don’t really care what they think as long as you pay something because your credit rating is already shot. Loan consolidation will probably have you spending more in the future. Don’t do it. Start doing a snowball routine with your bills start paying off the smallest bill first rather than the highest interest, and then once it is paid go to the next smallest bill and apply the extra you have saved paying the first one off to it. Depending on how many cards and loans you have you should get things paid off in fairly good timing. My husband and I have done this and we were in pretty deep. We just payed off a 4-wheeler loan that we HAD TO HAVE after 6 years of paying for it. We bought the 4-wheeler almost 5 times by the time we finally paid it off. We have paid off 8 credit cards in the last 9 months and we are now down to cars and utility. Now we started selling things on Ebay and finding extra outlets to make extra money. You can too! Next year we will be looking into buying our first home that we don’t rent.
Anyway, there are usually hidden fees in the debt consolidation programs that still would hurt you. I feel it is much better to work hard selling some of your things making extra money any safe way you can and paying off each thing as you can rather than taking on one more loan. Its a strain for awhile but also a great sense of accomplishment!
For the first time in 6 years my husband and I are actually beginning to breathe!! Good Luck to You!!
January 14th, 2009 at 1:45 am
go to a credit counseling center. they will contact your creditors on your behalf and set up repayment plans. good luck….
January 14th, 2009 at 4:10 am
technical difficulties is jumping the gun way too much on filing bankruptcy. You don’t give enough info about your situation to recommend it yet.
It really will depend on how much debt you have. $5000? $10,000?
So lacking this info, we need to work from the other direction. You can afford to pay $250 a month towards your debts. Over a period of 5 years that will amount to $15,000. Are you willing to be saddled with this sort of debt for that long?
What are your alternatives? You can file for bankruptcy. They will look at your “disposable income” and force you to pay a certain amount each month toward your debts. It may be $250, it will most likely be more. You will be paying this over 3 to 5 years.
Therefore, it would not make sense for you to file bankruptcy if with the situation I mentioned. But if you owe a whole lot more then $15,000, you need to consider bankruptcy as an option.
Consolidation loans may be a solution for you. If you have gotten your “act” together and can show her you have learned your lesson, and can now manage your money, she may agree to co-sign a loan.
But you MUST learn from your past mistakes. Get rid of your credit cards, do not get any more credit until this debt is paid off.
If you follow this route, your next job is to determine which bill to pay. You mention that you have more then one card in collections? If they have been there for a while you may want to consider not paying them at all, and let the statute of limitations run out on them.
But I’m going to guess these are only a few years into collections. Contact these people and offer to pay the debt in exchange for them removing the negative information from your credit history. If you pay in a lump sum, ask them to discount the balance by at least 25%. If you owe $2000, offer to pay $1500 all at once.
Hope these suggestions help.
January 16th, 2009 at 2:37 am
Check out this website:
Maybe they can help.