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Can anyone help me with getting rid of a lot ($35,000)of credit card debts, legally and without costing me a lot of money. Which companies are legit and which ones are a bunch of crooks? Any help would be appreciated.
There may be a city, county, or state consumer debt counseling agency in your area that is non-profit, or a public service group. They don't necessarily work for "free", but they're not a profit making business, either.
Before you seek those services, have you tried negotiating directly on your own behalf with your creditors? If you're really in bad financial shape (especially due to circumstances beyond your control) and make a sincere effort to structure a payoff/reduction program ... and stick to it ... many creditors will accept the partial payoff rather than the costs of going after you for a potentially minimal return.
There is a list of federally approved credit counselors that you can also use: U.S. Trustee Program/Dept. of Justice That way you know you are about as safe from the shysters as can be. Liz
I am a big fan of Consumer Credit Counseling CCCS is a non -profit through the United way. I have recommended this to many of my friends.
You can call your creditors as sunsprit suggested and see if they can lower your interest rate.
One trick to to look at your statement add the finance charge to the payment you make. This will put a larger amount toward the balance.
A lot will depend on the status of these accounts. Are they current or past due ?
Are you able to make the payments and just want the debt to be paid sooner?
If the income is there you can take the total balance decide how long you want to take to pay it off divide the amount by the number of months and that is the amount you need to send each month.
Some folks may suggest doing a home equity loan but I am not a fan of taking unsecured debt and securing it with your home.
Some folks may suggest doing a home equity loan but I am not a fan of taking unsecured debt and securing it with your home.
A home equity loan? No. But a Home equity line of credit (a HELOC)? Maybe.
If you really and truly can live within your means now - and you'll put the credit cards away (no need for dramatics...you don't need to 'cut them up' or 'freeze them in a block of ice'....you're an adult ) - then a HELOC might work.
An interest only HELOC would allow you to pay off the $35k in full, and then you'll have an adjustable monthly interest payment each month. In addition to the interest payment, you'll obviously need to put something towards the principal if you intend for the balance to go down. If you want to explore this option, look to your local credit unions or a well-regarded national bank (one of the biggies - Wachovia, Wamu, etc.).
The problem with this approach is that so many people will continue to use their credit cards, which will just compound the issue.
The Consumer Credit Counseling Services can be helpful, but they're not necessarily going to protect your credit, so you do want to watch for that.
Consult with a bankruptcy attorney. They will be able to direct you in restructuring your debt. Contacting creditors etc and negotiating low and in some cases eliminated finance charges. If your creditors hear from a bankruptcy attorney they will bend over backwards to help eliminate the debt , they really don't want the debt erased in court so they will likely work with your attorney to assist in any way possible to avoid it being discharged.
Credit Consumer Counseling is a rip off. You are better off negotiating with the credit card companies on your own. Many times you can work out a settlement with them. You need to educate yourself and learn the difference between filing bankruptcy and simply walking away or negotiating settlements on your own.
Credit Consumer Counseling is a rip off. You are better off negotiating with the credit card companies on your own. Many times you can work out a settlement with them. You need to educate yourself and learn the difference between filing bankruptcy and simply walking away or negotiating settlements on your own.
I looked at this website,I wonder what he charges to "help". The site seems to be more interested in warnings as opposed to helpful advise unless you email him for the help which takes me back to the original question what does he charge for his "help"
I am the first to tell people to contact your creditors but the truth is many people are either not comfortable doing this or don't know how to get to the right people at the company.
The reason I know this is I have had friends who have tried and I ended up getting on the phone doing this for them. (they gave permission to the credit card companies)
Walking away from a debt will not make it "go away" and is the worst possible thing you can do.
Settlements unless you can get them to agree to report the account as "paid as agreed" the fact that you did a settlement will show for 7 years on your credit report. Not to mention if the settled amount is over $599 You will probably receive a 1099 for the difference. This will have to be reported as income on your taxes. Lets say you settle a $10k debt for $5k and get the 1099 for the other $5k you will end up paying taxes on this amount. You are then taking the risk that that 1099 amount added to your current income could possibly bump you into the next tax bracket with the IRS.
The best advise I can give is to research completely each option.
I looked at this website,I wonder what he charges to "help". The site seems to be more interested in warnings as opposed to helpful advise unless you email him for the help which takes me back to the original question what does he charge for his "help"
I am the first to tell people to contact your creditors but the truth is many people are either not comfortable doing this or don't know how to get to the right people at the company.
The reason I know this is I have had friends who have tried and I ended up getting on the phone doing this for them. (they gave permission to the credit card companies)
Walking away from a debt will not make it "go away" and is the worst possible thing you can do.
Settlements unless you can get them to agree to report the account as "paid as agreed" the fact that you did a settlement will show for 7 years on your credit report. Not to mention if the settled amount is over $599 You will probably receive a 1099 for the difference. This will have to be reported as income on your taxes. Lets say you settle a $10k debt for $5k and get the 1099 for the other $5k you will end up paying taxes on this amount. You are then taking the risk that that 1099 amount added to your current income could possibly bump you into the next tax bracket with the IRS.
The best advise I can give is to research completely each option.
myfask,
Please don't be so negative of the advice I'm offering this person who is struggling to take control of her life once again.
I've emailed Bud in the past and he wrote back and charged me nothing. He's put together a good website, and it's a great place to start your research. Read it and learn!
Calling credit card companies to negotiate a settlement is a good start. If you don't pick up the phone and try, how will you ever learn? Of course, you'll feel uncomfortable the first time, but that's how you gain experience. Nobody learns to take control of their life by giving into fear.
Walking away from credit card debt is not the "worst thing that you can do." Some people may think it is corrupt and morally wrong, but it is not "the worst thing." You write them a "cease and desist" letter, put up with a horrible credit score for several years, and then on you go.
In a settlement, you do get a 1099 for the difference so you have to pay taxes on it as if it were income, but that is still less than having to pay the full amount.
Many of us have faced loads of debt in the past and dug ourselves out of it. It can be done. Stay positive and hopeful.
Green Machine
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) - then a HELOC might work.
