23 with a bussiness and a kid on the way, In need of advice ASAP

well glad to see that you are ready to get something done. frankly speaking this is how it all starts we all start with good intentions and on the right path but it gets screwed up somehow. look this is a whole forum of people who have made financial mistakes. dont feel alone.

Now when it comes to settlement it can be a very useful tool. but first you must consider better options first and rule those out first. did you consider consolidation companies? not consolidation against your home but the debt consolidation first. This will still make your payments everymonth and will negotiate with your creditors to reduce rates and fees you will pay one big lump sum every month for a long period of time. if you can swing this, its your better option for your credit score.

If you know you cannot do this then settlement is the next best option. before choosing a company research them fully. I dont know much about this company but type the name in the search box for other posts about them, google, and ask them tough questions. in settlement you can get sued so know the facts about settlement so you know what to expect what can will could and possibly happen. I needed settlement myself but trust me its no fun, and its far from the easy way out.

Reduce monthly expenses, cells, expensive car payments, cable, junk food and sodas, dont be eating out or treating yourself buckle down and get busy. Settlment is to be a fast process and the faster you get it done, the less likely of getting sued. cut out every unnecessary expense. reward yourself later.

on a brighter note, congrads on the new baby!

The only thing that really worries me is the fact that the settlement people say in the contracts that they might not be able to negoiate.. Now i bet if i do buckle down and go the settlement route that i can save the money up for the settlement aprox. 16500.00 and then I have to pay the taxes on the remaining 14500 that i didnt have to pay the cards. The only thing Is i don't want to go through all that and not be able to settle.

how much of a big lump sum are you talking about every month?

lovemythings-By the way, what problems did you run into during your settlement? And how long has it been? Is your credit repairing or is it fine now?

first of all i was not aware and you probably are not either, there is a form 983? i think that if you are settling you are most likely insolvent and wont have to pay the irs so that should not be a concern. second of all more likely than not they will settle. these are the problems i had during settlement.

1. the phone rang off the hook at first then got quiet for awhile then around the year mark they got pretty nasty. i cured that with caller id. they threatened everything under the sun, jail, they called my family and friends, threatning letters stating they dont work with settlement companies, threatened to sue, you name it they did it. now, a little wiser i realize that they were threating me illegally and i could have sued. learned that a little too late. but i was told to call the settlement co when this happened and i did, and it seemed to stop when i started reporting what they were doing.

2. of course my credit tanked, which is to be expected and the 1 card i kept for emergencies only interest rate sky rocketed.(universal thing)

3.i did get sued by my smallest account citibank. they absolutely would not settle at all not even with me. it was a 1,000 account they would not budge not even a little. but this is pretty highly unlikely. and frankly the judge was furious that i was willing to work out of court and they insisted on suing. it was not as bad as i thought it was going to be and it was a little after the 2 year mark. at the time the settlement co i used said that they were the worst to deal with. but know i hear they are settling now. Although i hear the smallest accounts are the hardest because they consider that its a small amount why cant it just be paid.

other than that, it went rather smoothly. i did run into problems were i could not make my payment amount for about 2 months and they helped me work that out by only making smaller payments for those 2 months, but this did take my program a little longer than 2 years. but at the time i just could not do that large of a payment.

its been 5 1/2 years scince i signed on with the program, 3 years out, and i dont regret what i did. trust me i wish i would never have gotten there but i did, it was not easy making those payments, or my family and myself getting harrassed, it was rather imbarressing, but i learned my lesson and will never get myself there again.

As for my credit, im still working on it, but its better than it ever was. even though i was making my payments on time before i was extended and made heavy use of my available credit (that was on my credit score report.) right now my credit is good enough to get loans and credit cards with a decent % but not were i would like it to be yet, i would like to be in the 700's, but right now the only thing that can help is time and good behavior. i have a judgement on my report that will be there for 7 years and that hurts, but im reading up on the score thing, and another year or so of being good i think i will be were i want to be. frankly i have never had a score of 700, even before settlement, so i would say that it was the best thing that i could have done at the time.

our score was good enough that 2 years ago, my husband and i purchased a bran new harley, a 22,000 motorcycle. so it really does not take much to get back on track.

Regarding your comment that the Debt Settlement contract stated you still might get sued is correct and universal in all DS agreements. It is certainly a possiblity and must be disclosed, however unlikely based on the debt amounts you have spread over five cards. It really would not be cost effective for the creditor to sue for a debt amount of 5-6K, I average the five cards. Just think what a lawyer would charge to go to court. The account will be sold to a Collection Agency who pays for the right to collect the debt, usually around .20C to the dollar. The creditor also gets insurance reibursement on your accounts, believe me they are not hurting that bad. Maybe the insurance company is (AIG). Using a debt Settlement Company will result in a settlement ranging from 40-60%. The collection Agaency at minimum doubled their investment, not bad. Based on a 48 month plan of $350.00 per month you could be debt free in 4 years. Of course you must research the company you plan on using and make sure they are members of (tasc) The Association of Settlement Companies. I have been doing this for five years and have a tremondous number of success stories. Turning over your accounts to a reputable and competent company will reduce the stress and pressure, allowing you to move on with your life and allow you to enjoy the things that are truly important, like your new baby. Congratulations!

Is there a way you can just focus on paying off the cards with the highest interest? That would be my first plan since the higher the interest, the more extra money you'll have to shell out.

I just addressed this on another post. If this is the way you want to proceed start paying off the cards with the lowest debt first. It wil give you a psychological boost seeing those debts disappear first and motivate you to keep going.

I appreciate all the advice..
I am still thinking about what to do but will make my decesion this upcoming month. I have a credit score of 715 right now. I didnt know it would stay on your credit report for 7 years. You can't get that removed? the only thing i really plan to do in the future is buy another house, but with a fha loan after i sell mine in like 5 years. I guess i can live without the 700's, i used to have 785

I appreciate all the advice..
I am still thinking about what to do but will make my decesion this upcoming month. I have a credit score of 715 right now. I didnt know it would stay on your credit report for 7 years. You can't get that removed? the only thing i really plan to do in the future is buy another house, but with a fha loan after i sell mine in like 5 years. I guess i can live without the 700's, i used to have 785