I need help to decide if I should try to settle my debt

Stop Borrowing Money!

Yes you should try and settle your debt. If I borrowed money off you and did not pay it back, would you like to see me posting on this website asking people if I should pay you back?

It is impossible to borrow your way out of debt so as the above poster said quit borrowing money.

The first thing you need to do is use a written budget every month. At the top right your monthly income and then write down your monthly bills. Pay for your house and utilities first. Utilities should consist of gas, electric, water, trash removal and maybe phone. Get rid of cable, cell phones and digital satellite if you have them. You can easily spend $200 per month on those and that is wasted money. The next category should be food. If you are really desperate for money you can live on rice, beans and ramen noodles all month for less than $30. Do not waste your money eating out at restaurants. Do not buy junk food. It is expensive and not good for you anyway. The next category should be transportation. I do not believe in car payments so if you have a 20,000 dollar car that you are making payments on for 5 years then sell it and buy a $1000 dollar car with cash. The only items in this category should be gas and car repairs. Next should be your emergency fund. I recommend a minimum of $1000 as soon as you can build it up but ideally you want 6 months worth of living expenses in there. Next should be any other expenses that have to be paid for example taxes. All of the above should be paid before any unsecured debt is paid.

The next items on your budget should be all of your unsecured debt written out from the smallest amount to the largest amount. You have 3 options with these. The first is to use a debt management program like you are trying. They do basically what I am going to describe below and charge you for doing it. A lot of them are sloppy and you will be left with bad credit when you get done. The second option is to make all of the minimum payments assuming you make enough per month to cover those and then take the remaining money you have and apply it to the smallest debt working your way up as you pay one off. Use this option if your credit is still good and if you do not want to ruin your credit by not paying unsecured debt on time. The next option is to take the extra money you have and work your way up the list from smallest to largest without paying minimums. This will get some of the companies out of your life quicker but you will start getting heat from others that you are not paying. If you use this route then your best bet is to save chunks of money and try to settle with companies in full. Make sure you get a settlement letter in writing saying the balance will be settled in full for a certain amount prior to making any payments. Many companies will settle on debt that has been late for 6 months or longer and they will settle for .50 cents to the dollar. I would try to negotiate out all the late fees, over limit fees and penalties and settle on the last balance prior to non payment. If you start paying them late you might also consider getting rid of your phone because the collectors will try to drive you insane otherwise.

I am asking for help... I do not believe your posting was necessary. This is my last resort. I was asking for advice not for you to put me down and make me feel bad. All people get into debt. Part of this money was for a funeral too. I have worked all my life ever since I was a child from the age of 12. I grew up in the midwest and when economic times got bad all companies went down south including my parents business. Please do not post if you are goint to insult me. I feel bad as it is there is no need to make it worse. I work hard, and have been trying. I have cut back and eating at home and cooking. That is why I tried the debt management, but I do not see my bills going down.

How long have you been in debt management? My husband is in a dmp program and things started changing for him after three months. The credit cards stop charging late fees and interest rates go down. This does take a little time to see a difference.

I have been in debt management for 6 months now, but is not going that well.

Pink4Lizard - I understand, I am currently about 70K in debt and have decided to try and settle these myself. I did look into a dmp - but the monthly payment was going to be the same amount as what I was already paying, so how was that going to help me? I'm sure it's a great option for alot of people, but not for me. Don't let others make you feel bad, people are quick to judge but they aren't in your shoes. Have you thought about debt settlement? Something you can do yourself or use a company? Feel free to IM me and I'll help if I can with any questions, I have read up quite a bit on DS companies, and might use one as well if I can't settle myself. You can read my blog at http://jen.yesdebtfree.org/

There are alot of people out there like us, so please do feel bad, we do what we can.

Jen

Dear Jen:

I was feeling very discourage when I read Anon's posting, but at least now I know I am not alone. I feel as though I am drowning in debt. I will read your blog. Thanks for the pep talk...

Pink,

Yes read my blog and feel free to make comments or email me, the drowning in debt is not new to me, but hopefully after you read my blog you'll have some ideas, questions and maybe alittle hope!

Sorry if my post made you feel bad because it was certainly not intended too. I was simply offering suggestions on places you could cut back in your budget if you wanted too. I was broke coming out of school and followed my advice pretty soundly. I was single at the time so it was pretty easy to eat cheap. I had no cable, no phone and a car that was 14 years old. Oddly enough my current car is 13 years old that I paid 1500 for. I've been driving it for 6 years now. My wife hounded me for a car so hers is only 5 years old. I got weak on it so I overpaid and had to take out a loan. Women do that too you sometimes I guess. Rarely do I buy brand new cars unless I get an awesome deal on one.

Dollarsand Since - It wasn't your post that upset the OP it was Anon's. I do think you posted good information and it's awesome that you were able to get yourself out of debt. And what's this "Women do that sometimes" LOL

I'm a woman, and I NEVER do that!! lol well ok maybe I do, but I'm not letting you ask my husband.

Pink,

I would say a settlement of dept would be a great option. do you have a way to get a lump some of money of any sort? if not then you would need to think about prioritizing your debts then contacting each Debtor and negotiating something with them.
If you need more help give me a call or email me at

Phone number and email removed due to TOS violations - Mike

Dollarandsince:

In the subject area I actually address the comment directly at Anon the guest sign in. Your advise is sound because that's what I did first before going into debt management.