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OT-Debt consolidation
Looking for someone who's had experience with it, good or bad.Wife lost her job 1.5 years ago(she's the bread winner) took 2 months to find a new one at 50% less money. We just payed the mortgage,utilities,food and stoped paying the credit cards. She just started a new job making the same amount as her original job.Were now so far behind on the CC we've been turned over to collection agency.We owe about 40k in CC debt(don't ask) so were looking at debt consolidation.We have equity but can't qualify now with our bad credit. THANKS
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#2
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It won't help your credit rating right away but I think you can probably negotiate with the collection agency to reduce to amount owed. They bought the paper from the original creditor at a significant discount. Could you borrow $20,000 from family to make the agency a "bird in hand" deal?
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#3
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Only know this from reading others' stories about it. Ask for a "Debt Verification Letter', which they are legally obligated to send you within a specified time frame.
This shows whether they have proof that you owe the money. It sounds like the debt is legit, but I might still go through this step. After that, yes, try to negotiate for a settlement to pay it off.
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And we have just one world, But we live in different ones |
#4
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I don't have anything to add, but just want to say I'm glad you rounded a corner and things are looking up.
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#5
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Another vote for negotiating a settlement if you can. I did this for my parents with some medical bills they had, and the difference between amount owed vs. the settled amount was huge.
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#6
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And separately, if you haven't already, cut your discretionary spending to the bone. No gym memberships, race entries, magazine subscriptions, etc. Money trickles out in so many directions...it won't feel like much individually, but it will add up.
Sucks to have to let some of these things go, but every little bit does help, and when you're back on stable ground, you'll be less likely to continue that discretionary spending. Instead, you can put more money into debt reduction and eventually savings...
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#7
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Thennnyou negotiate once you know their starting point |
#8
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I suppose if you get to negotiation it may be a good idea to let them think you are weighing a settlement vs. filing bankruptcy because if you go that way they get nothing.
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#9
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That"s what i had planed on doing if we got a home equity loan. Call each CC and tell them i was going to file BK if they wouldn't settle on a lower amount and try to get the total amount to around 20k.
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#10
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#11
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This is not legal advice
Caveat: This is not legal advice.
But in general -- creditors *might* be willing to negotiate, but there's nothing that says they *have* to. And just because they are willing to negotiate doesn't necessarily mean it's the best option. Second -- most of the "we'll negotiate with the creditors on your behalf if you send us monthly payments" outfits are straight up scams, but at best disingenuous. Again, they don't have any legal power to force creditors to do anything they don't want to. (Hint: Discover Card and Ford Motor Credit are pretty notorious for being hardasses.) Third - Don't discount bankruptcy. It's not the "end of the world" most people seem to think it is, and if most of your debts are unsecured (i.e., credit card) that's pretty much exactly the type of situation bankruptcy is for. But again, this is not legal advice and you should talk to an attorney who specializes in bankruptcy about your options. |
#12
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Congrats on being on the up. That must be a huge relief. Not sure if this is great advice but seeing as you are on the up, why not get a final pay off on what you owe and take out a loan for that amount and have it paid off with monthly payments that you can afford safely? This will raise your credit score back up also, I would think. But $40k seems like a good chunk of change so I probably wouldn't do much without speaking with a lawyer 1st.
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#13
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#14
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'Stuff' happens. Then when you NEED that equity, you can't get it. Even if you can get a loan with a heinous interest rate big enough to pay off 1 card, take it. Use it to pay off the highest interest rate card 1st, then put the $ you were paying on the 1st card onto the payment you were sending the 2nd, then when that's paid off, use the 1st 2 payments on the 3rd, etc till you've got all the payments paying off the loan. As you're doing this, pay the minimums on all the rest of the cards and concentrate ALL your 'extra' $ onto the 1st then the next, then the next card down the line. Think snowball gathering more snow as it rolls downhill. It ain't easy, but that's the best way I know how to deal with that. M |
#15
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Talk to a bankruptcy attorney. You may be able to dump all your debt with little downside.
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