i have 5+ yrs of credit card debt and the bills are in collections. will consolidation help me?
Written By: admin on December 12, 2009
8 Comments
I have 5+ yrs of credit card debt and also had a repo about 2 1/2 yrs ago. I am able to start getting my bills paid. Will credit consolidaton help or should I contact my creditors and set up payment arrangements. I have a least 5 credit cards, hospital bills, and a student loan. What is my best option?
Related Posts
Tags: credit card debt, credit cards, creditors, hospital bills, payment arrangements, repo, student loan
In the long run, consolidation will not help you. Mostly because consolidation fixes the symptom and not the problem. The root problem is most likely the fact that you can’t control your spending.
Instead, get out of debt on your own. In doing so, you’ll train yourself not to impulse.
Here’s what I’d recommend:
1) Get on a written budget and use cash where you typically overspend.
2) Get $1,000 in the bank ASAP to deal with emergencies
3) Pay off your debt smallest to largest balance. Focus on that small debt and pay it off ASAP. Pay only minimum payments on the rest.
You can contact the companies and see if they’ll settle, BUT they only will if you’re behind on payments. Plus, this will have a negative effect on your credit report.
My wife and I teach a class on personal finance and have been able to help many singles/couples get out of debt quickly following the process I described above.
In this 13 week course the average family pays off $5,700 in debt and saves $2,300. So, I know this stuff works.
Contact me directly if you have any specific questions.
I hope this helps.
Scott………
no but a 5th of jack daniels might
place your options, on paper, call and make the offers, is accepted, keep to your offer.
if not
credit counselor will help, and they do charge.
LARGE DEBTS????? may want to check out bankruptcy
Look at the interest rate on your largest bill and find out if consolidation or a single loan to pay off the others would give you a better rate overall. For example if your student loan is the largest debt, it is probably at only 5-7% hopefully; you might not get a better rate if consolidating. On the other hand if your largest debt is the credit card, you are probably paying from 10-20% APR and could probably get a better rate than that. Make sure you get a reputable consolidation or loan with no secret surprises like interest rate that increases after a certain amount of time.
Here’s what I did. I had several credit cards. I finally got one that had a percentage rate that was "until paid off" like at 9%…..transfered all I could to that one. Paid it’s minimum and tried to pay off the next one with the lowest balance. Then was able to transfer to just two cards, then had enough limit at the 9% one that i could place all on one and just did what it took to pay it off.
I would go to every credit website and dispute EVERYTHING on your credit.
Go to experian, transunion, and equifax, and question to see a copy of your credit report.
After that, click on "dispute". Deny ever knowing what in the hell those charges were.
What’s going to happen after that is that the credit unions are going to write letters to the creditors (the credit card companies), asking for them to verify the account. If the credit unions don’t receive a answer within thirty days, it legally has to be taken off of your credit report.
After five years, I really don’t reckon that your outstanding balances are going to be on the top of anyone’s stack. I don’t reckon that they will write back soon enough. Also, if you want to wait it out, most states have a statute of limitations for five to seven years, meaning that in two more years, that terrible stuff should be taken off your credit.
Look into this.
Plenty of excellent advice here.
Hi, I reckon you should read these articles first:
What is credit-counseling service?
http://www.askaquery.com/Answers/qn492.html
Debt Consolidation – Get Out Of Debt
http://www.askaquery.com/Answers/qn1643.html
How to Hire a Debt Counselor?
http://www.askaquery.com/Answers/qn1584.html
What is Debt Relief?
http://www.askaquery.com/Answers/qn1583.html
Debt Management and Building Wealth
http://www.askaquery.com/Answers/qn1581