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Debt Consolidation

lokiju

lokiju

Lifer
I've been thinking about doing debt consolidation, I was in a wreck 3 months ago and have been out of work since then on workman's comp. but the money just isn't near what it was when I was working full time and I'm starting to get in over my head in debt and bills pilling up.


Until my spinal injury heals fully and I'm able to go back to working full time, I really don't have any other way of bringing in extra money.


So my question is has anyone ever done debt consolidation and what were your experiences?

I've seen some many damn commercials and there are so many web sites out there that I'm just not sure which to go with either.

Any help would be greatly appreciated.

:beer:
 
most debt consolidators are scams, i really wouldn't put my financial future into someone elses hands. Just call up your debtors and see what kind of arrangements they can make with you. You'd be surprised how much they can help you, since they'd rather you pay off the debt that to go into default.
 
Originally posted by: lokiju
I've been thinking about doing debt consolidation, I was in a wreck 3 months ago and have been out of work since then on workman's comp. but the money just isn't near what it was when I was working full time and I'm starting to get in over my head in debt and bills pilling up.


Until my spinal injury heals fully and I'm able to go back to working full time, I really don't have any other way of bringing in extra money.


So my question is has anyone ever done debt consolidation and what were your experiences?

I've seen some many damn commercials and there are so many web sites out there that I'm just not sure which to go with either.

Any help would be greatly appreciated.

:beer:
Click to expand...

Dude, I can TOTALLY help you out here.

First, stay away from debt consolidators. They are backed by the credit card companies and so are biased towards helping the creditors more so than they are in helping you. You will still have the same principal balance to pay, you might have an interest rate reduction, but the only real benefit is you write one check instead of many, usually for a more manageable sum. But you will still be mired in debt for many years (depending on the balance).

If you are serious about not only managing this debt but also getting rid of it, you'll want to consider debt MANAGEMENT. I have to caution you that this will hit your credit rating... but depending on what your current debt situation is, the hit may be mild, relatively speaking.

I used a company I HIGHLY RECOMMEND for managing my debt. They are Price Law Group, at http://www.pricelawgroup.com. They essentially negotiate with your creditors and attempt to settle what you owe at far less than you owe. You make monthly payments into a trust account, and stop paying your creditors. When you've accrued enough money that Price Law Group feels they can negotiate with, they'll move in and make a settlement offer of something like .30 on the dollar. They retain 25% of your savings as fees. So ultimately, you still make out like a bandit in savings. In my situation, I owed $32,000 to 3 different credit cards, and they settled all three accounts over two years for a grand total of ~$11,000 plus about $7,000 in fees. So all told, I shaved off $14K.

I also need to caution that, while this is my experience and it worked for me, I am in no way an advisor speaking on behalf of this company. I highly recommend them, but you should speak with them about your situation and they can better say if they're right for you than I can. A guy named Jack Warner is the best guy to talk to. He's been with me through the whole deal and he's very friendly, very honest, a complete straight-shooter.

Hope this helps... if you need any more info just PM me.
 
Getting your credit worked down to say $0.30 on the dollar like most of these consolidation places do is a VERY bad thing for your credit. I did it in Jan of 2000, and promptly quit it in Feb of 2000 when I saw what it was doing to my credit. Needless to say, I went a different direction and got a regular bank loan (using my car and whatever else I could as collateral) to pay off my credit.

I've been busting my ass for 6 years now, trying to get my credit back into decent shape. It's been a long, hard road but my credit scores are now all over 700 (up from a low of 535 in Feb of 2000).

Moral of the story - DON'T use debt consolidation, unless you absolutely have no other option. It will be worse for you in the long run. Ironcrotch is right...give your creditors a call and explain your situation. See what they can do for you.
 
Originally posted by: ironcrotch
most debt consolidators are scams, i really wouldn't put my financial future into someone elses hands. Just call up your debtors and see what kind of arrangements they can make with you. You'd be surprised how much they can help you, since they'd rather you pay off the debt that to go into default.
Click to expand...


I agree, my mom went through a company and it only made things worse for her. Finally she claimed bankrupcy.
 
Originally posted by: Poulsonator
Getting your credit worked down to say $0.30 on the dollar like most of these consolidation places do is a VERY bad thing for your credit. I did it in Jan of 2000, and promptly quit it in Feb of 2000 when I saw what it was doing to my credit. Needless to say, I went a different direction and got a regular bank loan (using my car and whatever else I could as collateral) to pay off my credit.

I've been busting my ass for 6 years now, trying to get my credit back into decent shape. It's been a long, hard road but my credit scores are now all over 700 (up from a low of 535 in Feb of 2000).

Moral of the story - DON'T use debt consolidation, unless you absolutely have no other option. It will be worse for you in the long run. Ironcrotch is right...give your creditors a call and explain your situation. See what they can do for you.
Click to expand...

That would be my first recommendation; get a personal loan and pay off your credit cards.
 
Don't do debt consolidation. You can get ripped off so many ways - many times you pay the debt consolidation co., they take your $$ for "fees" but don't tell you, or it's in the fine print - they don't pay your credit bills - you're in even deeper, and now you have another creditor giving you crap (you signed a long term contract with the debt consolidator . . .)

I have a credit lawyer (long and complicated story) and he calls them names that are worse than I've ever heard.

My advice is to rob a bank or convenience store or whatever and use the $$ to pay off the bills. This sounds harsh, but believe me, you'll be out of jail (with paid-up credit bills) sooner than you would have been able to get your credit straightened out otherwise.

I joke, but there's a lot of truth in that. Seriously, go to extremes to keep your bills current, and call your credit co's and ask for lower payments for a while.

Good luck :beer:
 
Originally posted by: Poulsonator
Getting your credit worked down to say $0.30 on the dollar like most of these consolidation places do is a VERY bad thing for your credit. I did it in Jan of 2000, and promptly quit it in Feb of 2000 when I saw what it was doing to my credit. Needless to say, I went a different direction and got a regular bank loan (using my car and whatever else I could as collateral) to pay off my credit.
Click to expand...

Yes, that's very true. It will hammer your credit. But what you need to realize is, people who generally will benefit from this option ALREADY have crappy credit and would never be able to get a bank loan. I don't know the OP's position in detail so I don't know if this applies to him or not. In my case, my score was crap to begin with so while I credit got hammered, it only went from like 550 to 520 or something. I mean... who cares... 550 aint gonna do anything for you anyway so who cares if it's 550 or 520.

DO try other options first... but when they don't work, this does.

 
Proceed with caution.

Caution 1. Many debt consolidation companies do 90% of the damage that a bankruptcy does without all the "benefits", and they routinely do not tell you that.

Caution 2. Debt consolidation in it's best form does not reduce debt, it just moves it around. If you can, sell some of the things the debt is for (?car), which will eliminate the debt.

Caution 3. As things get tight, you may have to decide who not to pay until you get on your feet again. Don't let the collectors make that decision for you, you decide what's best for you.

It sounds like you're going to have to lower your life style for awhile. Weiners and beans for food; walks in the park (or sit on park bench) for entertainment.

While you're deciding "what next", there's a money Talk Show on radio called Dave Ramsey that address issues like this for about 1/4 of the show. If you're interested, you can go to http://www.daveramsey.com and see what station he's on in your area.

Good luck


Jim
 
Check if any of your payments can be suspended while you are injured. Many things like life insurance and many loans have this feature. CC do also but only if you have the paid coverage usually. Good luck
 
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