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Deep in debt, need help!


kata5482
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Hey guys I just signed up> i was going to call one of those debt consolidation companies but haven't heard from anyone that has really used one of them to see if they work or not. I have 4 cards basically that need to be paid off and some medical bills. they are all maxed out, one at 10,500, one at 7,500, and 2 at 2,500. During college things got a little spendy i guess and i need to fix this. Is credit consolidation the way to go? I am making minimum payments right now, and even that is hard and I am late on one card because i didnt have the money to make the minimum this past month. I want to hav egood credit.. I've been using just cash to pay for things and not using the cards, but the interest is as much as my minimum payment. please help!

Rob

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I do not have any advice on debt consolidation. But, check out this thread. Esquire was 10K in debt a year ago and bought a book, changed spending habits and is now debt free.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=274966

Hey guys I just signed up> i was going to call one of those debt consolidation companies but haven't heard from anyone that has really used one of them to see if they work or not. I have 4 cards basically that need to be paid off and some medical bills. they are all maxed out, one at 10,500, one at 7,500, and 2 at 2,500. During college things got a little spendy i guess and i need to fix this. Is credit consolidation the way to go? I am making minimum payments right now, and even that is hard and I am late on one card because i didnt have the money to make the minimum this past month. I want to hav egood credit.. I've been using just cash to pay for things and not using the cards, but the interest is as much as my minimum payment. please help!

Rob

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Don't use a debt consolidation company. You end up paying them (even if they say you don't), they may show up on your credit reports somewhere, and they sometimes mishandle your money and you end up with late payments (which is what happened to a friend of mine).

Just call the credit card company's, explain your situation and they'll probably work with you. They may revoke your spending privledges (at least until everything is paid off), but they will likely reduce or eliminate your interest. This is the same thing the consolidation companies will do, but doing it yourself gives you some control.

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Don't use a debt consolidation company. You end up paying them (even if they say you don't), they may show up on your credit reports somewhere, and they sometimes mishandle your money and you end up with late payments (which is what happened to a friend of mine).

Just call the credit card company's, explain your situation and they'll probably work with you. They may revoke your spending privledges (at least until everything is paid off), but they will likely reduce or eliminate your interest. This is the same thing the consolidation companies will do, but doing it yourself gives you some control.

VeVe offered some good advice. I would just add that when you speak to them, follow up the phone call with a letter to the credit card company outling what was discussed and keep a copy of it for your records.

Somthing like as discussed, I will pay XXX amount every month with not additional interest charges or late fees, etc.

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thanks for the advice guys. do i call the card company first ? Who should I speak to? Any customer service person? Or should I just start with a letter discussing possibilities and ask them to call me to discuss further detail? Please let me know how to go about this. Problem is that i WANT to pay off the entire amount, I just want to get some time, not use the cards anymore, and reduce the interest as that is what is killing me. The cards are 1st financial bank, bank of america, GM, and chase. thanks!

Rob

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Don't write yet, especially if you're really late and near charged off accounts. It may take too long or get lost. Just call the regular customer service number for each card. They'll probably transfer you to a different department that will work with you.

Just tell them you want to pay it off, but you're experiencing a hardship. A reduction or elimination in interest is what they'll likely offer. Try to negotiate, in a friendly way, elimination. You can offer higher monthly payments than what they initially request. It will be worth it since then you'll just be paying down the principle.

Whatever you agree to, make sure they send you something in writing confirming it, or send something to them confirming. And get the name, and ID # or direct phone #, of whoever you talk to.

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Hey guys I just signed up> i was going to call one of those debt consolidation companies but haven't heard from anyone that has really used one of them to see if they work or not. I have 4 cards basically that need to be paid off and some medical bills. they are all maxed out, one at 10,500, one at 7,500, and 2 at 2,500. During college things got a little spendy i guess and i need to fix this. Is credit consolidation the way to go? I am making minimum payments right now, and even that is hard and I am late on one card because i didnt have the money to make the minimum this past month. I want to hav egood credit.. I've been using just cash to pay for things and not using the cards, but the interest is as much as my minimum payment. please help!

Rob

Don't even bother wasting your time with those debt consolidation because they will not pay your creditors but pocket your money xhitwallx and then you will really be pissed. Fizzle1979 has pointed you in the right direction :)++

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I'd suggest you seek a consolidation loan from a credit union or bank. You can pay of the CCs and lower your rate considerably.

-r

my credit is shot as far as getting a loan is concerned, I have all my cards are maxed out so they wont give me a loan because of that

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  • 3 weeks later...

also, i am disciplined enough to live on cash. I have had cards maxed out for almost half a year now, and i am just now getting to the point where my minimums exceed more than i can pay due to interest that has gone up. Been living off the paychecks and have made my cost of living go down quite a bit as of recent. helppp... what do i do/

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As was stated previously but other posters the debt consolidation route isn't necessarily the smartest way to go. I know too many people who became trapped in the debt consolidation game, thinking that they were going to be lowering their debt and bettering their credit at the same time. Unfortunately, every single person that I know who enrolled with a consolidation/repair company ended up paying a ridiculous amount of fees associated with the service and their debt actually increased since joining. Some debt consolidation companies have a habit of not paying your bills on time, therefore resulting in late fees and increased interest rates. Also remember that many debt consolidation companies receive kickbacks from the creditors simply because they're getting their money.

There are a good number of resources available through the forums and the main site to help you repair your own credit and get yourself out of debt. It may be far more rewarding to put in the elbow grease yourself, save the money and potential future problems, and know that you may have gotten yourself in that debt...But you were smart enough to get yourself out.

Just my thoughts.

Good luck!

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  • 2 weeks later...

started calling the companies.... called up 1st financial bank and it seems that they do not have a hardship department and are trying to make me pay 500 this month and 700 in december to get back below the credit limit and they are basically saying they can't do any better since they are a small bank and what not. what should I do?

still have to call up my GM card (hsbc), Chase, and Bank of America. I hope I have better luck

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Just to clarify... the term "debt consolidation" has been used improperly throughout this thread.

Debt consolidation is when you take out a loan to pay off all your debts.

Credit counseling is when you turn all your debts over to a company that (theoretically) negotiates lower interest rates and from a lump sum that you pay them, doles out monthly payments to your creditors.

:)

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I'll quote you from a previous post of mine:

I remember juggling over $60,000 in debt (none of it ever so much as a day late), and some of the cards would have min. payments of $300... and like $280 would go to interest. There was absolutely no way to catch up.

They almost always fail to make the payments on time, they lose payments, don't communicate properly with the OCs etc. and you end up with not only late fees piling up, but lates on your CRs. And they do NOTHING to help when they screw up. They usually make matters worse. I never had one late payment or late fee until I stupidly went into credit counseling. Don't do it.

I ended up filing for bankruptcy in the end, because none of my creditors were willing to work with me regarding interest rates or min. payments... even though I'd never gone over my limits or made late payments. If I hadn't filed, everything would have eventually ended up in collections because I was tapped out. I didn't want to live like that.

Sometimes bankruptcy really is the best option, I'm afraid. :( But I filed before the new laws, so I can't speak to how hard it would be for you. I suggest you post in the BK forum if you are considering it. You have enough debt to justify it.

BUT... I suggest contacting your creditors first. They just may agree to work with you.

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does credit counseling seem like a good option for me? If so, where should I be looking? I would rather pay a lump sum each month opposed to all the stress. Can someone point me somewhere for this?

Credit counseling is a scam. They don't do anything you can't do yourself. They will charge you lotsa' fees and not do what they promise. You will not be in better shape financially. Your creditors will not stop calling, in fact, they may sue you. You risk judgments and garnishment. You probably will owe more money than you do now, due to universal default, penalties and fees. Your credit will be further destroyed, to the point that nothing but time will fix it...and you may be liable for additional taxes on forgiven debt.

The CC companies will not be inclined to deal with you at all unless you are delinquent, and some will not play ball no matter what you do.

In short, your only real options are to get a consolidation loan that will cut your interest rate down, or throw money at the debts by working extra and cutting expenses or file for BK.

I'd suggest you try someplace like Citi Financial, Beneficial or Wells Fargo Financial. Walk into an office and tell them what you need. Their criteria for loans is not as stringent as a banks and they are more likely to take on a sub-prime loan. The interest won't be as good, but it should still be better than your CCs.

A lot of us have been in your shoes, we feel your pain!

-r

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I visited this site months ago for a similar situation. I read the same advice to call the creditors yourself, credit counseling is a scam, etc.

Like you, Kata, I had the same experience. When I called my creditors, not one would work with me. At this point I was not yet late in my payments, so perhaps they might have been more willing to do so had I been several months behind. The only other options suggested on here were bankruptcy, CCCS, and debt settlement-- and none were suggested very positively. I spent several hours on the phone with creditors and all it accomplished was making me think my situation was more hopeless.

After much research I contacted First Consumer Debt Consolidation and enrolled in credit counseling. I have been on the program for five months. I pay them $59 a month for their fee; they have never mismanaged my money or not sent a payment to a creditor; in fact, I can log on to their site anytime to view my statement.

It seems easy to tell everyone to call their creditors, but that apparently isn't working for many. Creditors don't want to work with the consumer-- they all recommended CCCS to me. Sure, the creditors may be getting a financial kickback from CCCS, but I can say that after enrolling, my interest rates were lowered and fixed for all accounts, and the collection calls stopped. I will also be out of debt in five years. My debt was rolled into one payment and FCDC has been very easy to work with. For me, all of this is very much worth the $59 a month and I haven't been scammed-- in fact, I've been very pleased with my experience so far.

For those of you who have successfully worked with your creditors on your own- congratulations. But at least come up with another viable solution on here for others who cannot, even if it means swallowing your distaste for CCCS.

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I also found that my creditors would not work with me, despite no late payments.

However, credit counseling made things so much worse. So many of us have had the same experience... late payments, late fees, and higher balances than when we started. And we were left with negative notations on our credit reports that our accounts were in CCCS.

The company you mentioned here appears to be quite reputable, according to the BBB. When I did it (1990s), there wasn't enough info available... I think the BBB still made you pay for info at the time. :evil: So if the OP has no luck with negotiating with his/her creditors and decides to go the CCCS route, I'd be interested in hearing their experiences this company. I'm certainly not above revising my opinion if someone brings to my attention something that actually helps, instead of hurts, our members.

http://www.bbbsoutheastflorida.org/BBBWeb/Forms/Business/CompanyReportPage_Expository.aspx?CompanyID=5002076

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I read the same advice to call the creditors yourself, credit counseling is a scam, etc.

And it is a scam 95% of the time. However, there are legit services out there: http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm

Even if you find a service that is approved, all the stuff I wrote before still applies. The worst I think is having creditors report late payments for years.

-r

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Negotiating with credit card companies works--I did it and they reduced my rate. My argument at the time was that I had 4 cards, and was going to cancel the one with the highest rate. The rep came back and lowered the rate to like 11% or something from 14.9. But a debtor in trouble is actually a more compelling argument for getting the rate reduced.

I'd try this, just call the 800 number and say "I am in trouble and I can't pay all my bills. I am going to let the highest rate credit card, which is this card, at ___%, go. If you helped me by lowering the rate, I could make headway and pay it down. It can't hurt to ask. I'll bet you can get a rate reduction in 75% of cases.

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i sent this ltr to 5 of my c card companies just recently after speaking to them. the co. who told me flat out no, was the first to send the ltr back allowing me to pay $42.50 (i asked to pay $25). so far I got back 3 ca's out of 5 & i just bought this book with temp ltrs. give it a try b4 using a debt consolidator, they are honestly a rip off.

LETTER REQUESTING PAYMENT PLAN

(your name and address)

(name and address of creditor)

[date]

Dear Sir or Madam:

I am the holder of account number ________________________________________. I have been experiencing some financial difficulties and have been having trouble paying on this account. I fully intend to pay you the full amount due, but I find that right now my finances are not able to pay for this account. I would like to arrange a payment plan as follows:

(info here)

I would also propose that as part of this plan, you will report my account to credit reporting agencies as follows:

(info here)

Please respond to this proposal in writing within fourteen days.

Sincerely,

you

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