How do you I settle my own debts

I have 3 credit cards that I have been paying for over4 years. One is extremely high charges and I want to try and settle with them can anyone tell me how this can be done. Thank You.

The thing about settling debts for less than you actually owe on them is most creditors will require that you be considerably delinquent in making payments; and even then some just won’t settle … they will sue you instead.

So if the debts are delinquent, contact the creditors.

If they aren’t delinquent, and in particular if you are in good standing with the creditor and have a decent credit score, you may be able to negotiate a reduction in the interest charged on the credit cards …this can allow you to have more of your monthly payments go toward principal vs. interest and can help you in paying down the debt faster.

You won’t know until you try either way, you could get lucky 🙂 The first thing to do is to have a plan for each debt and contact the creditors by phone to initiate the negotiation; then follow up all contacts via mail to confirm your agreements.

Will paying even a little each month prolong the attempt to sue?

Do you think that by paying even a little each month will prolong the attempt to sue?

On an average, when do they sue and what should be done then? Do you need a lawyer? I’ve been sending in the pro rata payments and although my creditors have not been thrilled with that, they’ve not talked about suing.

I was in a very similar situation about 7 years ago except my debt was over $100,000. I can only tell you what worked for me. I was given the book Total Money Makeover by Dave Ramsey, Now, I know that some folks consider Dave’s advice “old-hat” but it worked for me and for everyone I passed the book on to when I got out of debt. You don’t even need to buy it. Go to the library and check it out. His plan is simple and straight forward, and goes into a great deal of detail as to exactly what steps you need to take and in what order. The TMM worked for me because I was overwhelmed by my situation and couldn’t get my head around my problem in order to see a solution.

No matter what solution you end up with, it’s important to remain calm and be patient throughout the process. It took you 7 years to get into the situation you find yourself in; it will take several years to get out of that situation. Don’t become desperate for a solution that you compound the problem.

I keep hearing about Dave Ramsey and I am wondering if his program would be able to be used in Canada? I read all of the posts here but most of them don’t apply here in the great white north!

Absolutely. Common sense works everywhere (Except France…but I digress 😉

New member, but probably an old question

I have been reading your posts and would like to give my scenerio. Put simply, changed jobs about 7 years ago………income was cut in half for the first year at the new job………used credit cards to supplement the missed income that year…….have been able to pay the minimum required for the next 5 1/2 years, but have not been able to make any payments for the last 6 months.

There are about 8 credit cards with a beginning balance of $63,000.00. Now with all the fees that balance is closer to $$68,000.00. 2 accounts with BoA, 2 accounts with Discover, Wells Fargo, Chase, Citibank, and a couple of dept store cards. I had kept in verbal contact with all accounts (the calls were initiated by me), but have avoided all calls for the last 2 months as I have no answers to give them as to how and when I could pay. There is just not enough income to cover. I made a 12 month arrangement with Discover and have maintained that so far, but the others are behind.

My year to date will be over 6 figures, but the last 5 months have been way short of that average. My current take home is a struggle to cover our living expenses. My wife also works to help cover those living expenses. We have refinanced all the equity out of our home to lower the payment, but were not able to cash out for elimination of other debt.

Where do I go from here? I have no real assets to sell to generate cash, no family members to ask for a loan, I am sure my credit score is dinged with the last 6 months being not paid so a consolidation loan is not possible. Do I start writing them letters asking for a solution? Are there archived letters that I could use as an example? Your insight and guidance will be greatly appreciated! I have kept a great attitude under the circumstances, but I really need some solutions for closure to our problem. Thanks

Welcome to the community.

Unfortunately, you looked for help a little too late.

I know the reason was because you were trying to do the right thing and being optimistic…and that is okay.

You have another hit coming with this months bill, because if you did try to make minimums you would find that they have doubled.

At this point you only three general options:

1) Make more money.

Do anything that you can to make money. Start an online business or do eBay. Sell used stuff animals on the side of the street or at flea markets. Sell your own baked goods — go door to door if you h ave to. Deliver newspapers in the morning…

Do whatever it takes to bring in more cash.

2) Cut and slash your budget.

If you have cable “git” rid of it. And I don’t want to hear that is they only way to have TV. Right now you don’t need TV–it’ll take away from our making more money.

Get rid of the cell phones. Get dial up on the computer instead of DSL.

Change you W2 form at work so you bring in more cash.

Start couponing.

Whatever it takes to cut the budget.

It won’t be forever…only as long as it takes to get you out of this mess.

3) Settle your debts, either by doing it yourself or with a company.

At this point there is no other option. CCCs will not work, and snowballing is just out of the question do the lateness of your accounts, etc.

Your credit cards are a bitch (sorry if that offends anyone).

Most of your credit cards are the most difficult to deal with. Boy you know how to pick them :-s

Citibank, MBNA (now owned by BoA), BoA, Discover, and the retail cards are goina be a bear to settle with.

MBNA actually will be your best card if they have NO idea that you are working with a third party debt settlement company. With MBNA you can get as low as 20 cebts on the dollar more often than not if you know how to deal with them. But if they know you are with a company the gloves come off.

Citibank, MBNA, BoA and Discover will more than likely sue you ar attempt to. You’ve gone too long for that not to happen. The only thing that you can do is to challenge it and prolong it as longs as you can.

When selecting a debt settlement company, you look at a performance-based company first like Provanta or www.edebtfree.org first. If they can’t help then you’ll need a front-fee based company like Credit Solutions out of Dallas, TX.

If you live in TN, NY, Il, WA or any of the nine other states where debt settlement is illegal then you need to do-it-yourself or get an actual attorney. Of course www.edebtfree.org can help you as well. As what they do is teach you how to do the settlements yourself with one-on-one coaching and handholding.

www.edebtfree.org will charge the most for the first settlement and then the fees go down from there as you settle each one. You can quit at anytime in between settlements so you are not bound to any contract and you are doing the settlements yourself so they can operate in anystate.

When trying to settle with the creditors, try to settle the Citibank and the store cards first (the store cards are owned by Citibank) as they will be the most difficult, then MBNA/BoA and then Discover.

Because you are so late and have no funds you need to start to protect your assets from the creditors.

You will also need to know your rights so read the Fair Debt Collections Practices Act.

Finally, if you just want to try and do it all yourself without any company. Know that you’ll need to have some backbone and be able to deal with stress, because the creditors and CAs will try to put you through hell.

I recommend http://zipdebt.com/ if you want the education to do settlements for yourself. It is a very good program and gives all the information that you need to get yourself out of this situation.

It is lacking in the finer knowledge that will give the great deals, and is a bit general. You will not not get the inside knowledge that a company has and it doesn’t go in to how to establish those contacts that you will need to get 20 and 30 cents on the dollar deals.

It is GREAT though, if you are looking to do the settlements yourself. I can recommend the course highly enough for this.

And it is very affordable. For only $99 bux you get everything you need to settle your debts and for another $100 you can actually get one on one coaching as part of the deal. You simply will not find another deal like this.

When you compare the cost of the program to the amount your will save and lessened stress I would say it is the BEST deal around. I would gladly pay $200 bux to get rid of the debt monkey. That alone is well worth the cost.

I hope that this helps you out.

Feel free to ask any other questions you may have. I would love to help and I know there are many great, knowledgable people on this forum that will help as well.

The truth in credit repair

We have been trying to get a mortgage at least an 80/20 but our scores are low 500s. If talking to different lenders they offered advice on how to get our credit up. (which I have been working on getting things corrected on our history – lowered our score some more from mid 500s).

One says not to do anything that will pull our credit for at least a few months. Another advised to get a couple new credit cards and just use it like for $20 or so and pay that off every time. He claims that these couple cards (not carrying any balance on them) will raise our score. Is there truth in that?

I just got a raise so should be able to start no longer having any late payments.

The sad reality is that you are a poor credit risk right now. Think about it from the bank’s perspective…they make money by lending money. If they thought they were going to get paid back promptly and make some interest from you then they would give you the loan you’re seeking. They are selling a product (debt) and you are a buyer…if they thought you could afford it, they would sell you the product.

If a “raise” is the only thing keeping you from making late payments then you are a couple of YEARS away from buying a new house. Don’t buy into the culture that says if you want something bad enough you should able to go into hock deep enough to buy it. It’s a bad direction for your family. I promise…I’ve been there. Take some time to pay your debt OFF before buying a house.

Rent for 2 years, pay early or on time each month and you’ll have no trouble getting a mortgage that you can afford and you won’t be worried about making the payments in 3 months. Foreclosure is gonna suck and that’s where you’re headed.

This is the truth, it may not be what you wanted to hear, but it’s the truth. I wish you the best in your decision and your future.

More of the shocking truth about credit repair on this video:

P.S. Don’t fall for the “get a credit card” crap….it’s crap. Just pay off your existing debt and spend time getting your financial “house” back in shape. Mortgage companies will come beating down your door if you do that.

I would like to try to get our family on a budget

We have about $300 weekly to spend on food, gas and all other incidentals. We are also a debit card user. I don’t like the bother of having to get cash to pay for things and using cash makes tracking where my money goes much more difficult. I called my bank and they said I can set up a 2nd checking account. I’m thinking that I should have 1 checking account for the monthly bills, direct deposits, no debit access and then I have the other checking account with debit access where I put the $300 a week. The problem is I’ve always ‘borrowed’ from savings if there is not enough money in my current 1 checking account.

What happens if it’s the end of the week and I need to buy milk or gasoline and I’ve used my $300? How do I not buy milk for my toddlers because I don’t have money when I actually have money but it’s just in savings? Sometimes it works out that some weeks we’re going to spend more than $300 and some weeks we’re going to spend less? Maybe after a couple of weeks you’d have a cushion that you could use for those heavy weeks or I’d be more regular about shopping and getting gas? Sometimes I put these purchases on the credit card. I always pay off our credit card but I might take from savings. I automatically put money from my paycheck directly into savings so somehow things seem to work out. The savings seem to grow slowly even though I am regularly dipping into the savings.

We are not in debt yet but our total monthly expenses equal our bills and my husband is on full commission. It could be a major problem if his income should ever go down. He’s a mortgage broker and the economy is certainly slowing so it’s not unrealistic to expect things to be a little more difficult for him. Fortunately, my husband has some ventures which pay us a quarterly income which helps cover the tight times.

Take 200 from savings and use it to be your cushion in your grocery, etc. account; if you have more than 200 left at the end of each quarter, transfer the overage back to savings.

And, yes, I think 2 accounts would be good since you are so good about tracking and separating the items.