What can you do if you are falling behind on all your bills, is debt consolidation a good way to go , ?

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7 Responses to “What can you do if you are falling behind on all your bills, is debt consolidation a good way to go , ?”

1. Jeanne R on: 18 November 2009 at 7:01 am

   Debt consolidation is not free. You will owe more debt than you started with if you use one. Your debt will alsos last longer because they lower your payments each month by adding more months (years) of payments. Here is a plot that eill help you. If you work the plot, the plot will work for you.
   1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Place everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.

   2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

   3.Pay the minimum due on all of your debts and then place your extra money towards paying off the highest interest one first. After you get that one paid off, you place the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off quicker. When that is paid off, you place all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

   To start :
   Debt #1 (highest interest): minimum payment+ extra payment
   Debt #2 (middle interest): minimum payment
   Debt #3(lowest interest): minimum payment

   Debt #1: paid off
   Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
   Debt #3: minimum payment

   Debt #1: paid off
   Debt #2: paid off
   Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

   That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

   4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Place that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

   5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a huge screen, or dinners out, whatever goal you want. Remember to delight in your life.

   5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plot at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

   5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
2. Eric Cartman on: 18 November 2009 at 7:01 am

   I use AFS. American Financial Services. I pay them a $35 fee on top of what I have to pay my creditors, total $440 a month for $15K debt. Ouch! Before you join any debt consolidation, you should know that it’ll JACK your credit up. You will not be able to buy a car while in the program, it’s as close to bankruptcy as you can get. But for many of us, it’s the only thing left to do.

   I don’t reckon I’ll ever be out of debt, that’s just how it goes I guess.
3. Carmencita U on: 18 November 2009 at 7:01 am

   No! You will just add troubles and problems into your life. You should live within your means.And try to have extra job so you can have extra income to pay your bills. You should spent your money wisely.
4. sweet harri-et on: 18 November 2009 at 7:01 am

   file for bankruptcy.
5. John S on: 18 November 2009 at 7:01 am

   Hi, I’m the father of two young children… I know how it hard to bring happiness at home when you are drowning into dept … I’ve spent hours online searching for ways to settle my dept… Thank god, I’ve came across this site http://shrunklink.com/awtc … Me too I was falling behind all my bills… Now, I no more feel the stress of unpaid bills and creditors harassment…
   
   Excellent Luck
   God Bless
6. Jane Y on: 18 November 2009 at 7:01 am

   Try using: http://DebtAnswersNow.com

   I used their service a couple months back and they consolidated all my debt and lowered my total debt 40%.
7. cloutmaster on: 18 November 2009 at 7:01 am

   Try a service that is with the BBB. That way you know they have excellent service to their customers and do what they say. The company in the link below will give you a free consultation, they can help cut unsecured debtup to 70% always weigh your options.