Consolidation, Settlement or Bankruptcy???

Consolidation is best. Settlement will hurt your credit and bankruptcy will remain on your report for up to ten years. You can also try doing it yourself by paying the small ones off first and using the money to apply to the next bigger one and so on. That will taske a long time but it can be done.

It all depends in my opinion as to what your actual income is. a consolidation plan will take all those bills wrap them into one and try to negotiate % and fees off and take out the loan for a long period of time. You will still pay it all back but minus the fees.

settlement on the other hand is your next option it is better than bankruptcy, but worse than consolidation but if you feel you will loose your job completely then you need to get out of that debt asap. the only problem is you have 2 secured loans that usually you cant settle those and your debt after those 2 is around 10,000.00 so you are breaking the limit of most debt settlement companies. you could settle them on your own though if you still wish. unless you forgot something that puts above the 10,000 mark. could you still pay your mortage and car payment without the other debts?

There are many options out there explore them all before filing bankruptcy. This should be your abosolute last resort and usually you can find something else out there that will help you avoid bankruptcy

Hi maryw1975,

Since you have a mortgage, debt settlement could be dangerous as real property to a creditor is like blood to a shark. Your non-secured debts are actually rather low, less than $10k.

Those payday loans were definitely a bad decision, and without those I'm sure things would be a lot easier for you. I take it that since you went to the payday loans in the first place, that you cannot refinance your home, or get a 2nd mortgage? Because if you can, that would probably be the best idea, or a debt consolidation loan. With bankruptcy, you may lose your home.

The storefront payday loans have no motivation to settle, but do have hardship programs. Since your hours were cut, that should be relatively easy to qualify for.

Al in all, you are in a sticky situation and it's good that you are trying to find options before you get too deep. You may need to find a part time job to pay off those payday loans, though. Like frogpatch said, attack the smaller ones first and go from there. Send a letter to each creditor (via Certified mail) explaining that your income is now drastically reduced and inquire as to their hardship programs. Calling them is too risky, unfortunately the customer service sector seems to suffer from an acute lack of proper training, and they may cause you more trouble than it's worth. Click on "Do It Yourself" above for some good resources.

Good luck, and keep us updated!

chrys

im curious, I own my own home and went through a debt settlement program? What are the dangers outside of that if they got judgement, and you dont have income they can put a lien on your home but all that means is you cant do anything with it till they get thier cut. Sorry i too am still learning and would like to know the answer to this.

I personally would not recommend a second mortgage to pay off these usecured debts because then your home is in danger if you cant pay it, your home is now the calatoral. I have heard many times over thats the worst thing you can do is take unsecured debt and secure it with your home. Im not saying your statement is wrong, it may be correct, I just wondering.

Well, it depends on the situation. Mary actually has very little debt, except the mortgage, car pmt, and personal loan. The rest of them are quite low. And which debt settlement program takes storefront payday loans? I am not aware of any. Who would settle on a judgment? All that's left is a disputed debt and the $1000 medical bills.

But yes, getting out of this situation is risky however you look at it. Options: bankruptcy (too little debt, I don't feel that it's worth that, plus they will go through her assets with a fine-toothed comb), debt settlement (storefronts, judgment, car payment, personal loan won't settle for months).

Not being fully apprised of the situation, I gather that the payments for the storefronts are eating up her bill paying money.

Normally, love my things, you are absolutely correct. But as I said, this is a low debt, best to just pay it off. At least, IMO.

chrys

I would first advise you to sell your car and trade it for a much cheaper older car. Do this just for a short while at least while you can release the tension of your other debts.

Then as with the chunk you get from your car sale, settle the smaller debts.

With your income continue with your mortgage payments, and also keep settling other debts in installments.

This should really give you the relief you need and get you back on track soon.

All the best!

chrys, I hope you didnt think i was questioning your judgement because i wasnt, I myself am still learning certain things! and you are correct, Im not sure about the payday loans i personally never used one, so glad i havent i have heard such awful things about them!

In my opinion i would agree that debt settlement would not be your best option due to the fact that you probably wouldnt have enough to qualify. The above post would probably be your best bet as to getting rid of this debt start down sizing on things like your car, sell some things that you may not need anylonger on places like ebay or a yard sale or in your local newspaper. If you can get rid of the car payment, and maybe accumulate a few extra hundred that would be enough to pay off 1 or 2 of your smaller accounts. once you do that, you can use the money that you would have normally used to pay those (save until you have enough) and pay off another. One at a time, it will take some time and may be fustrating but you will eventually get there and you will remember how you suffered now so you wont do it again later! good luck!

Hi love my things,

No, not at all. :) I guess my point was is based on the situation that I am hearing about, it's best that this person buckle up and pay off their debt and chalk it up as a lesson learned. They are actually fortunate that it's so low, should be relatively easy to get rid of with some sacrifices and effort.

chrys

Another thing after as I suggested cutting down your car expenses, would be to pay off other smaller outstanding loans which are in urgent need. This you could even do with a credit card, but by doing this you should be in control not to incur a credit card debt. Make sure you have a couple of credit cards and rotate the dues on the credit cards. This is something I am only suggesting for you to be able to buy time on other payments. And by rotating the debt on multiple credit cards you will not get into the burden of paying interest on these dues.

Thanks to everyone! You have all given me great advice! I have made some bad mistakes but am trying to get back on the right track. Since I posted my message my car died. The engine failed and they are refusing to honor the powertrain warranty so I am looking into legal ways of having this fixed. It seems that sometimes once one thing goes wrong, everything goes wrong. If anyone knows anything about the legallity of this car situation, I could use any advice on that too. Thanks again to everyone, I have already began to work on my smaller debts and am going from there.