Buried in Debt

In case, if any consolidation company is ready to set up a plan with your creditors, will you be able to afford it? The reason I ask is in a consolidation plan, you have to first pay the principal amount in full. The interest rates may be negotiated and most of the fees will be waived off. You may not have any further fees after enrolling in the plan.

In debt settlement, the plan is much lower and there is a least chance of anyone defaulting in it. But like the program works, the accounts have to be in default for a certain period of time before the negotiations are done with the creditors. Find a reputed debt settlement company who has already had positive results with your creditors.

You will have to default to get them to settle. They have no incentive to settle or lower the rate if you are paying on time. Change all your contact info on the accounts prior to default and get your husbands work info off of the accounts. If they contact his work then send cease and desist letters stating that you are not to be contacted at work. Most credit cards will honor this request. As you are finding out debt consolidation will not work if you can not get a loan. A bank will not loan money if your debt to income ratio is too high. You can get a debt settlement company to help but they will let you default then settle as you pay them and charge you a fee for doing this. You can do the same thing yourself for free.

Yeah, I have been half tempted to try to do it myself. I am really pretty savy with finances...althought I am here buried in debt, to be able to do what I have done with the huge financial responsibilities that I am in control of for the past two years has been a mirical. I have not once missed a payment and have only been late on 1 bill (on accident). I mean, I didn't go out and spend money like crazy, I paid bills with my credit cards because I had a work related accident that side lined me for a while. Boy did it add up fast. I said to myself, "I'll pay it off when I get my settlement", little did I know, the settlement isn't coming any day soon.
I suppose that your right, they don't have an incentive to settle if your not behind in the payments. Shoot, I called and tried to get my APRs lowered and they basically laughed at me. The professionals always tell you to call and get the APRs lowered, that most of the CC companies will do it...WRONG. Maybe if I told them they were forcing me to go to debt settlement it would make a difference? I went to Beneficial yesterday to get info on a refi on my home, they want to charge us over 6k for closing and brokerage fee's, raise my mtg payment a couple of hundred dollars. I do have some options I guess. Only problem is, my hubby is a psyscho and doesn't want to know how much debt we have. Of course if he found out the actual #, I'd probably be dead.

I would let it all go delinquent and settle it as you have the money. Start a savings account and put all the money that was going to payments into that account. Let the cards set for about 6 months and you can start settling. I would shoot for 50% of the balance owed before late fees and penalties that they tack on for not paying. Some of them will even send you settlement offers. I recently received an offer for 50% after all their fees and penalties but once I have the money I am going to try to negotiate out all those fees.

The interesting thing about credit is you really do not need it accept for maybe a home mortgage but cash is always king. If you already have a home then you basically eliminated any good reason to take out a loan. Everything else can be bought outright including cars. Make sure you have a good home mortgage before you screw your credit up though. Never get an interest only loan and stay away from ARMs too. If you have a conventional fixed rate loan on a 15-30 year rate around 5-7% you should be fine.

Beneficial is a bottom feeder when it comes to home loans. They loan to people that have mediocre credit and charge a lot for doing it. It doesn????????t cost 6,000 to get a refinance. The last loan I paid for cost me ???? point with no closing cost. Basically my rate was 6.75% instead of 6.5% which means in 6 years it cost me 1,000 dollars extra in interest. I got this loan 6 years ago but I sold the house 3 years ago so I actually only paid like 500 extra in interest not 6,000 that they are trying to charge you. You can not borrow your way out of debt anyway. You have to change your lifestyle and buy your way out of debt. If you have expensive cars with expensive car payments consider getting rid of them and moving down.

If you can get the contact info changed on all the cards then you can keep them calling one phone number. Personally I would give them a dead line so you do not have to deal with a bunch of ignorant collectors. You know you owe the money and you certainly do not need to be reminded 5 times a day. I was being harassed like crazy on one of my cell phones because of poor decisions my wife made so we shut that line down. It stopped all the phone calls. So far I have settled 85k worth out of 100k so I have a bit more to go. The remaining debt has been sitting for about a year now so I might eventually get sued but I have not yet. I have 2 cards left that are delinquent.

The biggest lesson to learn is never ever start a business on credit cards. That is the best way to go belly up and lose the entire business. They are already hard enough to make money on without giving 30% away to the banks.

EDIT-
I wanted to add 3 comments to my post.
1. 35K is probably not worth bankrupting.
2. If you let your unsecured debt go deliquent it will mess with your credit score. You will probably end up with a score in the 500 range if you are still making other payments on time like your home mortgage and car payments. As you start to settle the debt your score will improve because the debt is shown as settled and your debt to income ratio is improving.
3. When you settle make sure you get a letter that says paid in full and only pay with a cashiers check or money order. Do not use post dated checks and do not give them direct access to your checking account.