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My wife and I are currently struggling due to high interest rates and fees. Ultimately we started going down hill when my wife decided to have braces put on two kids last year which costs us about $500 per month that we really didn't have. I'm not saying we're perfect but most of our cards have raised the rates to 29% based on a late payment on one card.

For the last 6-8 months we've been struggling to make payments so we WERE current on most of our cards up until 1 or 2 months ago when we finally decided that having food in the house and paying all the other bills on time was more important then the CC bills. Right now we're currently behind on probably all of the cards and getting killed with late fees, over the limit fees (two of our cards currently have payments due of $1200 each! - the 2 Citi cards which are 2 (almost 3) months behind.

We currently owe $23,200 on 8 cards and have been talking with Money Management International (MMI) and here's what they've come up with...

Creditor Balance Proposed Payment
CAP ONE $266.00 $6.00
CAP ONE $543.00 $15.00
HSBC BANK $836.00 $190.00
BANK OF AMERICA $1,874.00 $34.00
HSBC BANK $2,025.00 $47.00
WFF CARDS $2,217.00 $40.00
CITI $6,380.00 $113.00
CITI $9,050.00 $160.00
Total $23,191.00 $605.00 (+ their $40 fee + 10 "Payment Flex Fund") $655 a month total for 39 months - or $25,545.00!

The other option is obviously Debt Settlement. I figure if we stopped paying the CC's totally we could come up with anywhere from $500 to $800 per month (depending on the month - I have 3 teenagers getting ready to drive AND start school!). If we take even a 60% avg. payoff that would be about $14,000.00 which I could probably get taken care of in 18 to 24 months.

I fully understand that my wife and I have maxed these cards out and put ourselves in this situation however - I CANNOT STAND to sit here and watch all the CC companies raise their rates under the circumstances. At this point I'm 99% sure I have fully paid for my purchases and them some and that my current balances are ALL interest and fees at this point.

As you can tell I'm really struggling with which direction to go at this point. I could probably handle the calls from the creditors (I get 3-4 a day already) and would love nothing more than to pay them as little as possible but I'm not sure my wife could. If it was up to her she would have already signed the papers for MMI but for me it's not that simple - so I have a few questions...

How does each truely effect your credit score/rating? According to what I've read and heard (I know someone who is going to make their last MMI payment this Friday after 5 years!) your credit score goes down at first with the MMI but then begins to go up within a few months because your accounts are "re-aged" and are no longer reported late? When my friends started they had a low 500 rating and they're currently at 720?

When doing debt settlement I would probably start with the smallest card first (ultimately I could pay the 2 small ones with one payment?) then go from there but by the time I would get to the last one on the list it would be well over a year! How do you keep them from sending you to collections?

How does debt settlement effect your score since it could take so long to pay them off?

FYI - our current credit score is around 620 which in my opinion is not that bad. On top of all this I plan on moving as soon as my youngest is out of high school (4 years), if not sooner, so my credit score will come into play relatively soon. I'm afraid if I do DS then I wouldn't be able to get a loan - if it takes 2 years to pay everything then it would only be a year or two before I was trying to finance a house - on the flip side I've heard good things about CCCS and what it does to your score - I'm also confident that my wife and I could stick to the plan and make the payments for 39 months but I also don't want to pay the CC companies any more money!!!!!

I'll take any thoughts, ideas, experiences, data, ANYTHING to help me make this decision.

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