getting a credit card during debt settlement?
Date: Wed, 05/21/2008 - 09:30
I was wondering......my husband and I are going to start a do-it-yourself debt settlement. my question is.....
1) should we choose not to settle one of our credit cards so that we can start to build good credit after we settle with that card?
2) should we open any accounts, etc. before our credit takes an even deeper dive?
***My husband and I are only 21 years old and have $20,000 in debt. we are not looking to buy a house for another 5-7 years and hope to continue to live in the same apartment. the only other thing we may need credit for is to get student loans for graduate school.
Quote: should we choose not to settle one of our credit cards so
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should we choose not to settle one of our credit cards so that we can start to build good credit after we settle with that card? |
In fact it would be wise to have an open line of credit. You're right it'll help your to re-build your credit. Maintain the card with the lowest outstanding balance and the most comfortable monthly payment, and consolidate the rest of the high interest cards.
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should we open any accounts, etc. before our credit takes an even deeper dive? |
I'm not very sure about this part :( but just hang around, someone will shotly be around with the answer.
depends
If you consolidate your accounts (balance transfers), you may very likely find it difficult (impossible) to negotiate settlements on the new or consolidated account. Banks will not want to settle an account from which they've made no money from or at the very least recovered some funds from. Typically, accounts that settle are those that are well established and have been paid on for a while before the customer became unable to keep up.
On the "should I open any accounts" question: well, that depends on what type of account you want to open and why. Do you really want to open more credit (that can lead to more debt) right now? If it is a credit card, chances are they will raise your interest rate once you start falling behind on your other cards (universal default), but at least you would have an open account (preferably with a $0 balalnce). If you need a new car, then that might be a nother story... however, if you finances are tight due to debt, then you might want to look for a good used economy car.
Is your $20k debt all credit card debt? Typically, student loan lenders don't settle, so you should keep that in mind (and student loan lenders usually have deferment and other programs that can help you out if you are finding it difficult to keep up with their payments).
Did you purcahse a DIY debt settlement Kit or similar product to help you with your negotiations?
