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Credit Card Debt Consolidation Company
Valerie Said:my boyfriend has credit card debt. (call consolidation company?)?
We Answered:Until he cares he can't fix the problem. He is wasting 4-6K a year on interest so paying 400 a month will leave him in debt for life that is just wasted money paying for stuff he has. If he wants this paid off in 4 years he would need to pay about 800-1000 a month every month and not charge even car repairs. Does he have that kind of income or is he willing to work a second job and not spend money to handle his problem?
Do you want to deal with him or perhaps find someone who isn't deep in debt instead. Waiting for him to get to zero before you could think about marriage or children or saving for a house is a lot to have him ask you to do for him.
Joseph Said:Is it bad to consolidate credit card debt through a debt consolidation company?
We Answered:The term 'Debt Consolidation' can mean different solutions to different people. It all depends on the you present financial condition and you goals. Let me first explain to you the variations (if you might call it that) of debt consolidation.
Debt consolidation comes in many forms, so it is important that you reflect on what your needs and concerns and financial situation are before deciding which route you would like to take.
The four primary concerns for most consumers are:
i) monthly payment
ii) time to debt freedom
iii) total cost
iv) the credit rating impact of the consolidation program.
Debt Consolidation Loan
Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high? but the monthly payment will be lower than other options and there is no credit rating impact.
Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts ? but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report? and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy ? or using a third party to re-organize your debts.
Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.
While there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.
Cory Said:What is the best company for credit card debt consolidation loans?
We Answered:What keeps most people in debt is the fact that they keep spending more money than they make. They look at the "monthly payments" instead of the total debt loan that they are carrying. People need to stop spending now and concentrate on becoming debt free. Please do not consolidate or use a debt reduction company . It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.
A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another.
Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.
2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.
3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:
To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment
Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment
Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.
4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.
5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
You can do it and it isn't as hard as you think. Just follow the plan
Ken Said:Credit card debt consolidation company. Who is legitimate?
We Answered:http://www.debtadvice.org/ has an online lookup for legitimate credit counselors. Look for an organization that will look at your situation in detail, instead of producing a cookie-cutter plan.
The new bankruptcy laws have made it more difficult to qualify for Chapter 7, or the kind that releases you from all of your debts. Here's an article with more details: http://www.nolo.com/article.cfm/objectId… A bankruptcy stays on your credit reports for seven years, so it should be your last resort. See what a credit counselor says first.
Bryan Said:I signed up with a debt Consolidation company. One of my credit card company's says no deal-I must still pay
We Answered:Well, most of what omfgis said is true. There are legal ramifications that a creditor can take, such as taking you to court over your debt. However, it is unlikely a credit card company will have their attorney's pursue a debt (unless it is very large). Also, if it goes to court and you cannot pay it in one lump sum, then the court will break it down into a payment program or "force" you to file bankruptcy, which means they will only get part of the money back anyways, and with no interest being charged.
Did they give you a specific reason why or a general "denial" letter?
Just looking at what you told me, there could be more than one reason they declined your settlement offer. Insufficient delinquency. The bank probably viewed your credit history and deemed any settlement offers as being too low. We, at a very large credit card bank, used to only take off about 10% for every month past due (unless there were extenuating circumstances like death or something we knew we would never be paid unless we took a settlement). As a manager, I would NEVER have accepted a settlement without good reason, terrible payment history, and a check upfront.
I'm sure the debt management company is telling you to keep waiting until they are willing, however, that only makes things worse, since the interest and fees will add on to the balance and your settlement will be even lower. The worst part about that is, when you settle, the amount you are NOT paying can (and does) get reported as income to the IRS in the form of a 1099.
Let me know if you have other questions.
Stella Said:Does anyone know of reputable consolidation company for credit card debt?
We Answered:I would first try a non profit consumer credit counseling company...It is a much better option and it does not screw up your credit as badly...