a question about debt consolidation
Date: Wed, 02/08/2006 - 12:06
I've been putting off trying to clear up my debt mainly because I haven't had the income to do so. What I make barely pays the rent, utilities, gas and food. I don't go anywhere (movies, out to eat, etc). So doing a budget analysis is moot. I'm lucky to have $20 to my name at the end of the month.
Most of my debt is 3 medical bills (small to most people), a couple of book clubs (I was doing just fine for a long time), and 1 credit card. It was a $300 limit card. Now with all the interest, it's over $800. Oh, and my student loan. In all, I have about $15K in debt. I did do bankruptcy back in 2000 for previous stuff no thanks to my ex husband. My student loan didn't qualify for bankruptcy, so it carried over. I haven't been able to pay on that for years now.
To make a long story short, where I live, there are virtually no work due to factories closing down right and left. I've been out of work for nearly a year. I do some odd work for my neighbor's clients (webmaster stuff) on the web. This is the money I live on.
*** Can debt consolidation work for me since I only have on credit card and the rest are just bookclubs, medical and student loans? What happens if I can not find decent work for a long time to come? I don't even have the money to move on. Heck, the car's front axle is about ready to fall apart quite literally so I couldnt' move anywhere even if I wanted to. ****
I've asked my landlord, when I first moved in 3 years ago, if he would report my monthly rent payments to the credit bureaus (I've heard this done many times) and he refused to. That would have been great for my credit score for recovery after the bankruptcy. The car I got now I got from a tote-a-note place who reported my bi-monthly payments to the credit bureaus. That was good. However, because of the other mess, my credit score is still in the low 400's. Sad eh?
I've tried the C&D letter with various places in regards to phone calls. But I finally gave up and just keep my phone line connected to the internet nearly all the time now.
I guess if I'm barely able to pass the necessities as it is, what good would debt consolidation do if the money just isn't there to pay that!
Does anyone have any suggestions perhaps for work at home stuff online to help make some extra money?
Sorry for the long rambling. Just very depressed, about this cloud over me for quite a few years and also other personal stuffs.
Thanks for listening.
Barbara in N.C.
Hi Barbara, You are a strong person and being in such a situ
Hi Barbara,
You are a strong person and being in such a situation also, you make ways to add some humor in your life. Quote:
Heck, the car's front axle is about ready to fall apart quite literally so I couldn't' move anywhere even if I wanted to. |
Let's first look at the positive things that this consolidation program can do for you. This program will combine all your debts together into one monthly bill and you will have to draw only one check to the consolidation company. They in turn, will take the responsibility to pay your creditors each month. You will be receiving monthly statements showing how your money was applied to the multiple creditors.
Consolidation programs offer much lower monthly payments in comparison to the minimums that you would have been paying outside the program. These programs are beneficial to those people who have a hard time in making the payments but want to be regular with their bills. If you take this program and pay off your debt, your concern of improving the credit score will be visible in your file. You will be seeing the differences after each account gets paid off. You just need to be regular with your payments.
If you are not able to pay the consolidation amount, you can opt for a settlement program. But, this program is seen negatively by most of the creditors. They realize that you were not able to pay the balance owed due to hard times and hence, have taken the settled amount. Also, this negative remark will lower your credit scores and any improvement done towards your credit will be of no use. But yes, the debt is over in case, you want to get rid of it. This option should be used before filing bankruptcy. You can't file bankruptcy now as you will have to wait for another year.
After taking the consolidation program, the consultant works for you and calls your creditors. He arranges all the monthly payments with them and guides you throughout the program. In a matter of time, you will be offered some benefits like the financial charges will be waived off and the late payments fees will also be eliminated. This is possible because you will assure them regular payments from your side. In case, you miss the payments and do not pay at all, all the benefits extended to you will be totally withdrawn, any improvement that appeared in your credit file will go back to zero and the creditors will become tougher towards you in the future. They might even send your accounts to collections or a lawsuit can take place if they intend to do so. So, your payments are a must if you want to be on a better side.
Looking at the present situation, things can't deteriorate further as you are already going through it. It's becoming tough to acquire new credit and employers do a credit check before employment. Though, it's tough if I see myself at your place, but still there is a scope of improvement and I will definitely give a try here. I think you must take a consolidation program and take control of your future.
hmmm
Carl,
But what if I don't have the usual types of debt. Meaning, I only have 1 credit card and 1 loan (unsubsidized gov't student loan), the rest is bookclubs and medical bills. All are old. Most have gone to collections. Every 3 weeks it seems another collection company takes over a bill. It's ridiculous.
But like I figured as I typed my original post above, since I don't have any money leftover for the most part after the monthly necessities, I couldn't even do debt consolidation.
I just wish I could get another source of income. THEN I could do something. UGH! Where's a miracle when you need one? ;-) Well, if I have lasted this long without needing credit, it can wait a lot longer. I don't anticipate needing a home or such anytime soon. I don't want any credit cards or anything. I pay cash for everything I have as it is. Thanks to my ex-hubby, I can't even have a checking account - am on check systems and I refuse to pay one bank for an account I did not open nor authorize. I've tried disputing that, but it's a lost cause.
Oh well, This forum is still great in that I'm learning lil tricks to prevent things from getting worse, such as calling credit bureaus to get my name on certain lists to prevent companies from viewing my credit for no real reason, etc.
Thanks for responding, Carl.
Hi Barbara! You have two choices now. Either you have to increas
Hi Barbara! You have two choices now. Either you have to increase your monthly income so that you can pay the monthly installments set in the consolidation program. Or, you will have to take the settlement route. I guess, the former one is much better because your file will give a financially prestigious look to others viewing it. Of course, you will get good deals when you will be looking forward for a home or new credit perhaps, sometime later.
Book clubs and medical bills can also be put in the consolidation program as they are unsecured debts. But, before you pay them, check the statutes and see if they are within the collection period. In most states, statutes expire after a period of 4-5 years. If the statutes on these debts have expired, you won't be forced by any collection agency to pay them. Check the state laws as well as the date of last activity in these accounts for confirming the SOL period.
Waiting to hear back from you, Barbara. Have a great day.
Carl, Thanks for your last post. Your second paragraph has s
Carl,
Thanks for your last post. Your second paragraph has some good advice I didn't know about. I've jotted that down in my notebook.
I am trying like mad to increase my monthly income for more reasons that just debt reduction. I just need patience I guess!
HUGS
Hi Barbara, how are you feeling? :D I am glad to know that yo
Hi Barbara, how are you feeling? :D
I am glad to know that you learnt something important about the SOL which is a very vital point before repayment. Let me know the date of last activity in this account as well as the place where this account took place. I will confirm if you are legally required to pay the account.
Increase in monthly income as well as the reduction in the total debt is equally important for you to achieve a debt free life. I pray that you will be able to work smoothly in both of these directions and achieve your final destination.