Archive for March, 2010
Is it good to tell the judge that I’m in the debt settlement program?
What you need to know about debt settlement firms:
Your credit card companies are not going to offer you settlements like 50%, for example, if you are current (not behind) on your payments. If credit card companies offered settlements to people who are current on their payments, then everyone would be calling them up and asking for 50% settlements. Basically, the only way you can get into a position to negotiate settlements is to deliberately let your accounts go into default. This is exactly what debt settlement firms do….They take a monthly amount from you and use that to build a “settlement” account, which will go towards paying the “settlement” at a later date. Whatever monthly payments you make will go directly to the debt settlement firm for their fees and your settlement account. All of your accounts will go unpaid for several months and will default. This is not an accident. It’s a deliberate default as an incentive for the credit card companies to accept settlements.
If you are current on your accounts, this process will ruin your credit rating as your accounts will all go into default. Your creditors are under no obligation whatsoever to accept settlements from any debt settlement firm you hire. Their response might be to serve you papers and take you to court.
As your accounts all go into default…you will get increasingly aggressive collection calls from debt collectors. It is "typical" that creditors offer settlements for defaulted credit card debt….They often do this in lieu of loosing everything if you file for BK. HOWEVER, you can never predict how any one creditor will respond to defaulted debt. They might decide to take you to court and get a judgment against you. If they win, your wages may be garnished. Debt settlement firms have no power whatsoever to stop creditors from taking this action and they have no power to force creditors to accept settlements.
****If you have already defaulted on your cards….make your own settlement offers…you can do this on your own and it puts you in control. If you do…get all settlement terms IN WRITING PRIOR to paying them.
Don’t give me a "debt management" of "consolidation" solution as I will report you as a SPAMMER.
I have already begun the paperwork for Chapter 7 bankruptcy and know it will be a long hard road to fix my credit.
This is for those who have already or are in the process of filing for BK or those who know the process well, ONLY.
Fed law requires pre-filing counseling and a "certificate". I can do the counseling class online which I prefer. What companies have people who filed BK used for pre-filing counseling and and post-discharge counseling?
AND if you think I can get around the BK with the amazing "debt consolidation company" you are about to mention, don’t… it just shows you haven’t read my question and have no idea what the process is all about. I have no other options but to file BK right now.
And please don’t preach to me about the evils of credit or bankruptcy or how great your loan co or debt consolidation co is. I’m experiencing the evils and just want my life back
I just finished my bk chapter 7 and used Greenpath Debt solutions for my pre bk counseling. They were very good, and let me have the counseling without paying a fee due to my lack of funds. If you want, you can view my q&a page for details of my experience with this. Or feel free to email me with any questions at hansjill228@optonline.net. Good Luck.
I’m going through a credit management company to help me lower my debt. I am about $15K in the hole with various credit cards and department store credit cards. I mailed out cease and desist letters to each of them to quit calling me, because I get calls every day at home, and even a few times at my job. Let me know your experience(s) with this.
Years and years ago, I went through something like this….I went through a debt management program and a man called all my creditors that I listed and tried to get them to lower their rates of interest….most did as they wanted their money…..I then had to cut all my cards and put them in a large glass bowl he had there with others that were cut up….he did all the work really…..I then just paid the debt management agency one payment a month and it went toward my credit cards/loans…..they do all the sorting as to where and who it went to…..I liked it as it was in town and well known and reliable…..It also helped as no creditor ever called as I was paying off just in a different way. Can they call you at work? Sorry about that….I’d go nutty…..I’m not sure how it all worked, but I just did my part and they did theirs……instead of paying 6 different payments, it was just 1……took years to pay off, but have great credit now……just stay local and not over TV or buy into any of that…..this was a Catholic Charity place, but they take anyone and hold meetings on debt management and debt consolidation…..good luck and hope something I said helped…it’s heck to be in debt………
I signed up with a debt management company due to a large amount of credit card debt I accumulated.This was after I read that this can be equivalent to filing for bankruptcy? Is it really that bad? Now that I have focused on paying off debt (on time) and budgeting, I am hoping my credit score can greatly improve in spite of the debt mgmt program? I have since canceled the program and I’m paying the debt myself.Thanks.
Please, no sarcastic "told you so" comments, I’m kicking myself enough as it is!
Signing up with a debt management company is not the same as filing for bankruptcy,
This is a step that people take to avoid bankruptcy and all the other negative effects this has on your credit score and on your personal life.
Debt management is just a structured way of dealing with large debts: the company only takes the pain and stress out of dealing with the people you owe directly.
HOWEVER: there are a lot of fraudulent debt management companies out there, that cost you more then they are worth.
The monies that you pay to them can easily be used to cut of some Months! of your repayments.
The best way is to work out a reasonable payment plan your self or contact your local citizens’ advice bureau for assistance.
They don’t charge for their services and they can even provide legal advice for free or a marginal fee, depending on your situation.
Your credit score will improve but it will take time.
Good luck,
Choose an agency that is accredited by the National Foundation for Credit Counseling. They are all legitimate agencies.
To find an accredited consumer credit counseling firm, contact the NFCC at 1-800-388-2227 or visit their website at www.nfcc.org. They can counsel you, educate you, set up a debt management plan for you so that you can make one payment instead of several, and possibly negotiate lower interest rates with some or all of your creditors.
Watch out for the for-profit debt consolidation firms. They often charge huge fees and then they don’t pay your creditors.
I heard going through one of those debt consolidation companies is just as bad as declaring bankruptcy. Is that true? If not which one is the best to deal with?
Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score, which is almost as bad as bankruptcy. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.
A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another.
Here is a plan that can help you. If you work the plan, the plan 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. Put 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 put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put 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:Minimum 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. Put 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 big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan 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.
You can do it and it isn’t as hard as you think. Just follow the plan.
What happens to credit card debt when one’s parents pass away in the event that they do not have an estate, BUT the children do have an estate (real estate, etc)?
Morbid, but just wondering.
The other posters are correct. As long as your parents had nothing to probate, then the debt will cease with their death.
However, as an aside, I found something the other day that was rather disturbing. It seems that there are these "niche" collection agencies that actually specialize in probate collections. I guess this is where people get the idea that collectors are ghouls. 
http://www.probate-services.com
Youngsters wanting to make blizzards of money got valuable advice from financier Warren Buffett who was visiting his local Dairy Queen for the launch of the new Girl Scouts Thin Mint Blizzard.
Surrounded by a group of Girl Scouts in his hometown of Omaha, Buffett offered this tip for college students: “The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, I’d be broke. . . . So if I had one piece of advice for young people generally it would be to just avoid credit cards,” he said.
And what advice does Buffett have for a new investor? “I would do a lot of reading before I invested,” he replied. “In other words I would prepare for it. I wouldn’t jump in the water until I know how to swim. . . .I read every book the Omaha Public Library had about investing by the time I was 11.”
On qualities Buffett looks for in employees? “The biggest thing I look for is if they have a passion for whatever they are going to do,” he said.
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I am looking into debt settlement and want to know who produces the best results?
Credit counseling hurts you more than it helps and takes years to pay off… because you are stuck with monthly payments for 2 to 5 years. And there is a company that offers debt reduction that not only can be done in 12 to 18 months but also no monthly payments and little to no tax liability. I have had many family members use one company so let me know if you want the name.
I realize to go through with this I will be required to obtain credit counseling. I’m already on a debt management plan with Consumer Credit Counseling and can go through them. However, they (and other resources) don’t give a very direct answer for this question. Will I be able to get the loans or not? How bad will the interest be? And finally, if I have an active credit card with a zero balance, will I be able to keep that account open?
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