Debt Consolidation?

[Goldeneagle]

Has anyone had any experience with debt consolidation? With the rising costs of just about everything, me and my wife have been kind of kicking this around. If you have, what all is involved in the process, who did you go through, etc.. I don't know if we would be any better off or not, just something that popped into my feable mind.

[Stins]

I dont know the process but in the long run you will have the debt longer and will pay way more interest. However you will have a smaller monthly payment.

[TXJon]

Good advice I was given was not to use your house to pay off credit cards. Unsecured debt is safer for you, even if it's a little more expensive.

Other than that just be careful doing the math and consider all the costs involved. Lower payments plans usually add up to more money out the door in the long run.

[Bowtech32]

Ask Dave Ramsey, He will tell you not to do it....

[2050z]

Many years ago I did that and all the credit card companies lowered their interest rates. It was very helpful at the time. You can call each creditor and work out a payment plan with them if you are having problems.

[Mister Bubba's bulletman]

Whatever you do, don't pay anybody money for something you can do yourself.

Make a chart of your daily, weekly and monthly expenses.

Decide which ones you can change till you get down to at least the point where you not losing money every month.

If you have credit card debt look for new cards that offer low interest rates on transfers.

Move as much debt as possible on the cheaper cards.

Cancel the old cards.

Change your "buy no buy" decision making process.

Ask yourself, "do I have to have this or that?" before you buy.

Nothings wrong with a garage sale.

I had a some friends who went around and bought cloths by the bag for a buck or two at garage sales, then took them out of the bags and washed and ironed the good stuff, and would get a couple of bucks for each item that came out of the bag at their own garage sale.

They made thousands of dollars and got themselves out of debt off bags of cloths!

True story.

There are lots of ways to make quick cash.

You just have to change your habits.

That's the hard but the rewards are fantastic.

You can do it.

[Goldeneagle]

Thanks guy's! We have a couple of ideas we are thinking on. We are also going to talk with our bank to see what kind of help we can get with our budget. We're just kind of out of whack right now and checking our options. Nothing too serious, but enough I'm getting tired of it.

[2050z]

Well you are heading in the right direction. Getting your debt under control will do a lot for you. I know it helped me sleep better at night know I was no longer working for Sears, Mastercard, Visa, Discover, and the other plastic cards of death.

The one thing I did wrong was I closed all of my accounts and did not have a credit card for about 8 years. That hurt my credit score. I had to open two small accounts just to show some credit. We only have two credit cards and both have zero balance. I live off cash and if I cannot afford it I do not buy it.

[HUNTNETIME]

I personally think debt consolidation should be a LAST resort. Basically, you are paying someone else(and the debt consolidation companies ARE NOT doing this for free) to negotiate with the creditors to forgive some of your debt. I think writing letters and talking with your creditors one on one is the best way to go.

[cosmiccowboy]

I personally think debt consolidation should be a LAST resort. Basically, you are paying someone else(and the debt consolidation companies ARE NOT doing this for free) to negotiate with the creditors to forgive some of your debt. I think writing letters and talking with your creditors one on one is the best way to go.

So, has anyone here ever actually gotten a credit card company to dramatically lower their interest rate doing it themselves? I'm pretty sure there is an institutional bias to deal better with the consolidation companies because they know that all the other creditors are doing it too...I had an employee come to me once that was considering one of those consolidations...he had balances on a bunch of high interest cards...I was impressed...yeah, he was paying them $20 a month, but they got all his cards knocked down to 6-8% from 18-22% and the interest he saved EASILY paid their fee...

[Tommyh]

I just got through doing this myself with a company out of Las Vegas and here is how it works.

You contact them and they are liasons for you to creditors. They will discuss, with you, how much you make, how much you can pay, and if it comes down to it, run interference when you get tired of taking the phone calls from the collection agencies who call you. They're a crutch, really, and not necessary. You pay them for their services, and they do exactly what you can do by just finding the same letters on the internet and they charge a %age of what you owe the creditors. It affects your credit for 7 years after each one is completed. Citibank, and other agencies as well, does NOT work with these companies, and your interest will continue accruing until it is settled or paid off correctly.

If you get debt forgiven by creditors, you MAY be responsible to pay taxes on the forgiven debt, seen as earned income by the IRS, and they have the right to send you a 1099 for that debt if they decide to write it off for tax pruposes.

The best way to do it is by the snowball effect. Pay off the smallest cards first, then roll that payment into the next smallest, and work your way up the debt ladder. As long as you are paying something into your accounts, even if less than the minimum, most of the cards will not harrass you because they are receiving money and getting interest on it. If they start harrassing you, tell them that mail correspondense will be the only way you will discuss with them and stick to your decision.

[innergel]

1. Stop buying on credit. That means everything. Budgeted cash only.
2. Bring your lunch to work. No more restaurants. No more new clothes. No new hunting stuff. Nothing. Necessities only.
3. Google "debt snowball" like TommyH suggests.
4. Garage sales.

Getting out of debt is about setting your mind to it and changing your buying habits. If you pay off your debt but keep using cards, then you'll be right back where you started before you can blink. This has to be a whole life change and both you and your wife have to be fully on board and engaged for it to work. It hurts but it's the best thing you can do for your life and the long term security of your family.

As someone else posted, www.daveramsey.com is a good place to start. There are others but Dave has a LOT of devoted followers, including me and many other TBH'ers.

[whysixb]

I think the best type of debt consolidation is divorce. Give the Sears and Dillards credit cards back to her and make her pay off the rest of the Chevy Tahoe and the furniture she wanted. Then you take your bean bag chair and old pickup to a cheap house and live debt free.

[Live2Hunt]

Dave Ramsey

Dave Ramsey

Dave Ramsey

nuff said...

[Goldeneagle]

Thanks for the help there why6b!