Initial Steps Towards Paying Off Debt
Date: Thu, 10/11/2007 - 19:17
I recently signed up on this sight and just talked to my financial coach. I'm not sure if he reads this forum or not, but I wanted to just check what other members think about what he is suggesting to me.
First, here is my situation. I have several credit cards and personal loans totaling about 28K. I have missed a few payments here and there but I am now currently caught up. The problem is I don't feel like these things are ever going to get paid off. Two of my credit cards jumped to 32% interest because I was late on a payment. Also, I have recent charges on a couple credit cards and really just need to cut them in half, which I think I will do as soon as I finish posting :)
So, what my coach is suggesting is that I go through settlement. At first this seemed like a great idea, he claims that I can have all my debt paid off in about 19 months. This would be wonderful. But it also sounds too good to be true. And to be honest, the thought of not paying off all of my original principal makes me feel a little bad. I also don't want to ruin my credit so much that I won't be able to by a house sometime.
Is settlement a good option or should I really try to pay it off myself first? Will a credit card company lower my interest rate if I talk to them about it?
And Todd, if you do read this then please don't take offense, I just wanted to get some viewpoints from different people. I really don't want to make anymore bad decisions than I already have.
Thanks Everyone,
Chris
The creditors might lower the rates for you if you call. Not al
The creditors might lower the rates for you if you call. Not all of them are kind. Some people here have had luck on their own with the creditors.
I don't know how they tell you one action is better than another...but its just advice. Call around, apply for a free consulatation (not sure if you did that or if you called your financial coach listed on the right hand side).
Someone with experience with settlements will be along soon to offer more advice!
Congrats on taking that first step-realizing you need to get your debt under control!!
welcome, you are at the right place!!! let me give you one of my
welcome, you are at the right place!!! let me give you one of my :hug:
Lawn- He did get help from a coach/consulation on this site...He
Lawn- He did get help from a coach/consulation on this site...He's just looking for some feedback and suggestions to his sitation.
How is that different than applying for a consultation where you
How is that different than applying for a consultation where you get a call...or is it the same thing??
Sorry I'm confused on the two!
Thanks Volley...don't know why-I always thought they were 2 tota
Thanks Volley...don't know why-I always thought they were 2 totally separate actions.
CP...I entered into consolidation. I have less debt then yours-around $16,000. The thing that steered me away from settlement is that you have to claim it on taxes if your debt is reduced by a certain amount. Not crazy about having to report stuff on taxes as we already owe about $700 a year on the taxes.
Also, from what I've heard is the settlement companies will collect the money while your accounts fall past due. When they are past a certain point & they have X amount of money they would contact the creditors with offers. Not sure if they all work like that though.
Might be better for higher debt amounts though as it the repayment amounts might be less than with consolidation-that's just my thoughts though.
Hi all, thanks for the responses. I did get the consultation and
Hi all, thanks for the responses. I did get the consultation and it quickly led to talk of settlement. I guess I'm quickly becoming fearful of being taken advantage of. I don't think that is what is happening here, but I just wanted to make sure. The lawyer fees would probably be less than the interest on my debts, but I also read a few posts that suggested things could go badly. Though I believe these were posts about people using companies outside of the ones provided through the consultation.
My biggest concerns are the guilt for not paying off the full amounts of the debt, which I would probably quickly get over, and the effect on my credit score, which would take more time to get over than the former concern :) Though my score is not stellar right now, I believe it's mostly from having lots of revolving credit debt. And I don't want to ruin the chance of buying a house down the road.
Things could always go badly-I worried about that too, but its a
Things could always go badly-I worried about that too, but its a chance you take. What I suggest is when you start looking for settlement places, look them up on the BBB site or Ripoff Report. Then you can see their ratings & complaints.
Your credit might be affected, but after paying regulary it should come back up. Not rocket fast, but it will.
The credit card companies are charging you 32% interest and you
The credit card companies are charging you 32% interest and you are feeling guilty? They are ripping you off with that rate plus they are probably tagging you with bogus fees. Even a good rate around 12% on a credit card stinks knowing they borrowed the money for 2-5%. They see you as an account number and a business decision. Guilt does not play a part here. It is in your best interest to settle the debt as quickly as possible and get them out of your life for good.
Chris- the thing is, with that amount of debt, it would be hard,
Chris- the thing is, with that amount of debt, it would be hard, and take a long time to do it yourself, and repay them all that you owe.
If you feel uncomfortable with a company, check out their record with the BBB-there is also a Ranking Chart above the screen you can check out.
If you have been late on payments, there's already a mark on your report.
If you have questions about any company- ask them to explain,time, fees, etc.
Good Luck on whatever road you choose, and feel free to ask questions..Karen :D
Thanks everyone, I am starting to feel better about it. Once I s
Thanks everyone, I am starting to feel better about it. Once I start thinking about what the creditors have done, especially raising my interest rate after being late on 1 payment and the amount of fees I've paid to them over the years, it does make me feel a bit better about settlement. The fee structure that was presented to me seems reasonable and the person I talked to seems honest, so I will probably just go ahead with settlement. Even if my credit report is not so good after this all that means is that I can't get into this situation again, I'm probably better off that way anyway :)
