Should I enter into debt consolidation
Date: Wed, 02/07/2007 - 10:22
$10,500 in medical debt
$610 in old bills
$6,400 in old credit cards
$24,000 in car debt
$3000 behind in rent(not in collection/rent from friend)
My wife and I are trying to get ourselves in good financial shape.
I have heard that using a debt consolidation program can affect your credit badly. Sometimes worse than a bankruptcy. Is this true?
I can't get a loan to help with any of this. I am getting a decent income tax check, around $5,000. I don't know what to do with it. I want to use it as efficently as possible.
All of the medical debt is in collections. We have made deals with the 3 credit companies that we owe but we are still not getting anywhere.
Should I pay off as many of the medical bills as I can? Or should we pay off some of the credit card debt to free up some money so we could start paying off the medical debt?
We are very upside down on one of the car loans and were thinking about trading it in for a better/cheaper deal.
Thanks for any help.
Consolidating your debts will be a good move because you will ke
Consolidating your debts will be a good move because you will keep your accounts current through this program. The debts will be shown as paid instead of leaving delinquent. If you are already getting behind in the payments, your credit stands no good at this point. Repay your debts under the plan and see the credit scores moving up.
Don't take new loans at this moment. You will be putting on additional debts and this will make your financial situation even worse. Look for a second job and try to increase your source of income.
Contact the hospital for payment arrangements. They will pull your file from the collection agency if you show a couple of payments to them.
First calculate your total income and expenses. If you can manage payments on all the debts under the consolidation plan, stick with it. Otherwise, pay off those debts that have the highest interest rates. They are adding up with the fees. Using one of the debt management program, you will get some reduction from the total.
