I have 35,000.00 dollars in credit card debt. The interest is very high and I'am not getting it payed down. I have considered some of the options,example: to negotiate myself,credit counsling,professional negotiations,401K loan,debt consolidation. What is the best way?

[ben]

Kelgen

Among the various options you mentioned, either you can negotiate with your creditors at your own or you can take a debt consolidation program for it.

I refuse to follow a debt negotiation program because it will damage my credit file completely. As the credit report is already tarnished due to defaults, it is advised to prevent further damage. Please go through the debt settlement article to know more reasons of avoiding it.

http://www.debtconsolidationcare.com...ettlement.html

Opting for 401(k) retirement plan is also not preferred because you will have to borrow money from your vested account balance.

Since it is your own money, you will have to pay it back with interests added on it. This will be added expenditure over the existing ones.

Firstly, negotiate on your own with your creditors and lay out a payment plan. Convince them that you will be making regular payments to the agreed plan. If you do it in writing, you will have a proof this communication done. It should be sent certified with return receipt requested. While you send this payment plan, advance some money to them and notify that if they cash the check, your payment plan will be considered as accepted and you will make monthly payments as set on it.

Most of the creditors accept this plan because they get assured of receiving money from you. However, if you consider a consolidation program, the consultant will be negotiating with them in the professional way. You will also get reduction in the total amount of debt that will wipe off the financial charges, late fees and also lower the rates of interest.

I was in a similar situation like yours but I had no one to get advice from. I was also looking into these options when I came through this site and signed up with them. I am happy for choosing this program and have been able to reduce my debt largely.

The consultation is free here. So, you can have a choice.

debt settlement does not have the negative impact that this site claims. A debt settlement company will have a credit repair kit involved which will clean your credit history after settlement is resolved.

[Link made inactive as per forum rules-Vikas]

[roxette]

Hi Dan

Accurate negative information cannot be removed from the credit file unless the federal laws allow it. Any company that claims removal of this information will be working against the law and might be making some money illegally.

Negative information can be taken care of or your credit file can be improved from the previous status but it can't be removed before the 7 years reporting time.

Regards
Roxette

Accurate negative information cannot be removed. However, any good debt settlement company will have a credit repair service after resolution which will dispute the information. Most debt settlement companies have extra fees for this type of service, but Superior Debt did not charge extra for it. I love their program.

[ben]

This is true. Credit ratings are enhanced if the accounts are shown as 'paid in full' or 'paid as agreed'. These markings increase the credit scores and give a good view in front of the future lenders also.

Credit is severely damaged if the accounts are shown as 'settled'. So, a debt settlement company working for the benefit of the consumers should be appreciated and should be considered for future business.

Credit historys are not ruined just because you settle a debt off. Sometimes debt settlement is the best way to go. It has the advantage of getting you out of debt and helping your debt to income ratio get put into a favorable balance. Your credit report is only a snapshot of what your credit is like at that given time. Once you've settled the debt go get a secured credit card, pay the balance off each month, and you can have your credit rebuilt pretty easily.