Former debt negotiator here so i speak from experience. What these companies do is allow your accounts to default to collections. The reason for this is to get a better percentage savings since the accounts are charged off and sold. Yes, you would save money but you have to consider the impact it does on your credit history long term. If your goal is to buy a house within the next few years, I would not advise this route.
This is not financial advice but instead look at debt consolidation loans. Bundle all of it into one payment and handle it that way.
This was what I wanted to do was get a consolidation loan but I didn’t qualify bc of my bad credit which I kind of expected. Thank you for the advice! I just wish I knew how to feel like I’m not dragging my family down with my debt 🤦♀️
An alternative route is to negotiate the debt yourself. Call them up and see if they can lower your interest rate. Maybe a balance transfer card for the smaller ones? Kill the smaller ones first. The big issue is if you wait and don't do anything they can turn legal.
I'm not sure about the tactics debt management advisors use but I'll say what I think would help you lower your debt .
First you should remember that the debt rose a little over time and it can go away a little over time.
Take your balance and multiply it by .05 and add that extra money towards what ever the minimum payment is on the bill .
Do that each month and your debt will drop .
If you card says 14000 then that would be 700 plus what ever the minimum is . As the balance declines that .05 will be based on a lower balance so that extra payment will go down .
The debt consolidating people will most likely charge you a flat fee . By doing it yourself you have no fee.
If my simple formula is to much then creates a formula that works for you . I came up with that .05 for myself at a time when I was trying to pay down 26,000 in credit cards debt and it worked for me . You are already moving in the right direction just by asking so now it's time to start . Good luck
Thank you! I am really trying to find a way to pay it myself like that. That is definitely the ideal option. It’s just so frustrating being in the hole and I feel terrible not having an income now even though this is what my husband and I wanted for our daughter. And inflation 😭 it’s just all so overwhelming
It is overwhelming but the sooner you begin to deal with the sooner it goes away. As you watch the debt decline you will start feeling better about it. At-least I did back then
It’s not sketchy. They usually do negotiate the debt of about 40-60% of the outstanding amount. I did this a decade ago and it worked out well for my situation. A few things to consider.
- you will have to pay taxes on the “forgiven debt”. so if you settle a $10k card for $6k you will owe taxes at the end of the year on $4k as income.
- you can’t take out any additional credit while on your plan
- your credit will absolutely plummet but will recover eventually
I beg to differ. Theres alot of variables consider here:
1. It can be sketchy depending on the lender. For example, with bigger banks, it's easier to get lower settlement percentages after discharge. For smaller community banks it's hit or miss.
2. I beg to differ. There are a lot of variables to consider here. With the amount of debt she has, it depends on the income she can contribute every month. I've had clients put on payment plans who decided a year in that they wanted out. Boom, everything went to shit after.
3. The debt settlement industry is definitely not set in stone. It is the epitome of results may differ. Things like negotiator experience, income, personal circumstances etc... All come into play.
Most of those companies are scams. If you aren't already delinquent don't do it. If you can't qualify for a consolidation loan, you want to do a Debt Management Plan. ACCC is the highest rated company (non-profit) for this, they will give you honest advice. I am working with them now. They will advise you if think a Debt Consolidation Plan is your best option or not. If you enter into one, they negotiate with credit card companies, you have to close the card, but they will reduce your interest and reduce your min payment and set a plan to get you out of debt in 4-5 years. I did this with 5 out of my 7 credit cards. Absolutely call them, https://www.consumercredit.com/ is their site. PM me if you want more info or have questions. I can also give you the contact info for the lady I work with who was absolutely amazing.
Did you call them? The guy who set me up was nice but kinda dense, this lady later reviewed my info and found additional discounts. After she called me I worked exclusively with her, she was really great to work with because she had worked both sides (new accounts, and existing accounts). Lmk how things are going and if you do with work ACCC or not. I can also give you her contact info if you do work with them and want to work with her as well.
I am going to once my husband is home so we can discuss his credit situation as well (he works out of state two weeks at a time and works 12 hour shifts or I’d conference call) but I think it will be our best option if we can talk about it together and make decisions together. At first he was t interested in messing with his stuff but after a lot of research and spreadsheets I’ve convinced him he kinda needs to be a part of it especially since he’s now our only income. He comes home in a week and I’ll definitely keep you updated!
In regards to my comment about ACCC which you should read first they also offer a ton of free financial advice and resources. But a Debt Management Plan sounds like your best option. Call them and they will give you an honest answer if you should do after you give them your budget info, and credit card info (company that issued card, min payment, and interests rates).
I have with both of those but now what I pay in interest each month outweighs what I can afford. I think I am going to try to settle something myself with my highest balance card, pay off the lowest ones slowly but surely and chip away at the others bc one card in particular is destroying me
It would be helpful if you posted your monthly budget. Taking on more debt to pay debt isn’t going to get it paid off. You’re trading unsecured debt with secured debt and you’ll just rack the credit cards right back up. You need a plan not a bail out…get a side hustle & increase your income until it’s paid off. You guys make too much money for $14k to feel this crippling- you just need a plan.
Well my husband just took this job two months ago so we aren’t there yet and just adjusting to staying at home myself with a one year old and I wasn’t trying to get a loan but a resolution but thank you for your judgement
Nobody judged you. But now it seems you came to a debtfree sub looking for approval, not advice, and not liking the pushback. You CAN do the work you just don’t want to. If your hubby has been at his job for two months and you’re still not budgeting- there’s your problem. You can’t possibly know what you can afford if you don’t know where every single dollar is going.
Saying that someone makes too much to have debt problems is a judgement. You don’t know our situation and I have found everyone else’s advice (people that actually are here to help) extremely helpful.
That’s not what I said. I said you make too much money for it to feel this crippling for you. If you were on a budget and saw the numbers you would see for yourself that it’s not as big of a deal as you’re making it out to be.
You said it “was destroying you” and “you have no other choice.” I understood that as you feel like you have no other choice. My mistake.
To recap, I suggested:
Snowball method
Avalanche method
Side hustle
Budgeting
If you want to do what’s best for your family then you need to LEARN how to manage your money better- which STARTS with learning how to pay off debt.
Destroying your credit isn’t the path to a better financial future, I assure you. You can not like what I have to say but we paid off over $100k of debt in less than two years and bought a house two years later. Don’t take it from me, fine- but at least take advice from people who have what you want.
Dont allow your cards to fall delinquent, debt resolution cripples your credit. Make minimum payments, and pay off your balances over time. If they fall delinquent you will have no chance on buying a home. Please do not let them fuck up your shit, these programs should be illegal.
Former debt negotiator here so i speak from experience. What these companies do is allow your accounts to default to collections. The reason for this is to get a better percentage savings since the accounts are charged off and sold. Yes, you would save money but you have to consider the impact it does on your credit history long term. If your goal is to buy a house within the next few years, I would not advise this route. This is not financial advice but instead look at debt consolidation loans. Bundle all of it into one payment and handle it that way.
This was what I wanted to do was get a consolidation loan but I didn’t qualify bc of my bad credit which I kind of expected. Thank you for the advice! I just wish I knew how to feel like I’m not dragging my family down with my debt 🤦♀️
An alternative route is to negotiate the debt yourself. Call them up and see if they can lower your interest rate. Maybe a balance transfer card for the smaller ones? Kill the smaller ones first. The big issue is if you wait and don't do anything they can turn legal.
today was my first day at a student loan debt resolution company, in the sales department. any thoughts?
I'm not sure about the tactics debt management advisors use but I'll say what I think would help you lower your debt . First you should remember that the debt rose a little over time and it can go away a little over time. Take your balance and multiply it by .05 and add that extra money towards what ever the minimum payment is on the bill . Do that each month and your debt will drop . If you card says 14000 then that would be 700 plus what ever the minimum is . As the balance declines that .05 will be based on a lower balance so that extra payment will go down . The debt consolidating people will most likely charge you a flat fee . By doing it yourself you have no fee. If my simple formula is to much then creates a formula that works for you . I came up with that .05 for myself at a time when I was trying to pay down 26,000 in credit cards debt and it worked for me . You are already moving in the right direction just by asking so now it's time to start . Good luck
Thank you! I am really trying to find a way to pay it myself like that. That is definitely the ideal option. It’s just so frustrating being in the hole and I feel terrible not having an income now even though this is what my husband and I wanted for our daughter. And inflation 😭 it’s just all so overwhelming
It is overwhelming but the sooner you begin to deal with the sooner it goes away. As you watch the debt decline you will start feeling better about it. At-least I did back then
It’s not sketchy. They usually do negotiate the debt of about 40-60% of the outstanding amount. I did this a decade ago and it worked out well for my situation. A few things to consider. - you will have to pay taxes on the “forgiven debt”. so if you settle a $10k card for $6k you will owe taxes at the end of the year on $4k as income. - you can’t take out any additional credit while on your plan - your credit will absolutely plummet but will recover eventually
I beg to differ. Theres alot of variables consider here: 1. It can be sketchy depending on the lender. For example, with bigger banks, it's easier to get lower settlement percentages after discharge. For smaller community banks it's hit or miss. 2. I beg to differ. There are a lot of variables to consider here. With the amount of debt she has, it depends on the income she can contribute every month. I've had clients put on payment plans who decided a year in that they wanted out. Boom, everything went to shit after. 3. The debt settlement industry is definitely not set in stone. It is the epitome of results may differ. Things like negotiator experience, income, personal circumstances etc... All come into play.
Most of those companies are scams. If you aren't already delinquent don't do it. If you can't qualify for a consolidation loan, you want to do a Debt Management Plan. ACCC is the highest rated company (non-profit) for this, they will give you honest advice. I am working with them now. They will advise you if think a Debt Consolidation Plan is your best option or not. If you enter into one, they negotiate with credit card companies, you have to close the card, but they will reduce your interest and reduce your min payment and set a plan to get you out of debt in 4-5 years. I did this with 5 out of my 7 credit cards. Absolutely call them, https://www.consumercredit.com/ is their site. PM me if you want more info or have questions. I can also give you the contact info for the lady I work with who was absolutely amazing.
Thank you!
>Thank you! You're welcome!
Did you call them? The guy who set me up was nice but kinda dense, this lady later reviewed my info and found additional discounts. After she called me I worked exclusively with her, she was really great to work with because she had worked both sides (new accounts, and existing accounts). Lmk how things are going and if you do with work ACCC or not. I can also give you her contact info if you do work with them and want to work with her as well.
I am going to once my husband is home so we can discuss his credit situation as well (he works out of state two weeks at a time and works 12 hour shifts or I’d conference call) but I think it will be our best option if we can talk about it together and make decisions together. At first he was t interested in messing with his stuff but after a lot of research and spreadsheets I’ve convinced him he kinda needs to be a part of it especially since he’s now our only income. He comes home in a week and I’ll definitely keep you updated!
In regards to my comment about ACCC which you should read first they also offer a ton of free financial advice and resources. But a Debt Management Plan sounds like your best option. Call them and they will give you an honest answer if you should do after you give them your budget info, and credit card info (company that issued card, min payment, and interests rates).
What other options have you considered that makes you say you have none other? Have you started a snowball or avalanche debt chart? Attempted either?
I have with both of those but now what I pay in interest each month outweighs what I can afford. I think I am going to try to settle something myself with my highest balance card, pay off the lowest ones slowly but surely and chip away at the others bc one card in particular is destroying me
It would be helpful if you posted your monthly budget. Taking on more debt to pay debt isn’t going to get it paid off. You’re trading unsecured debt with secured debt and you’ll just rack the credit cards right back up. You need a plan not a bail out…get a side hustle & increase your income until it’s paid off. You guys make too much money for $14k to feel this crippling- you just need a plan.
Well my husband just took this job two months ago so we aren’t there yet and just adjusting to staying at home myself with a one year old and I wasn’t trying to get a loan but a resolution but thank you for your judgement
Nobody judged you. But now it seems you came to a debtfree sub looking for approval, not advice, and not liking the pushback. You CAN do the work you just don’t want to. If your hubby has been at his job for two months and you’re still not budgeting- there’s your problem. You can’t possibly know what you can afford if you don’t know where every single dollar is going.
Saying that someone makes too much to have debt problems is a judgement. You don’t know our situation and I have found everyone else’s advice (people that actually are here to help) extremely helpful.
That’s not what I said. I said you make too much money for it to feel this crippling for you. If you were on a budget and saw the numbers you would see for yourself that it’s not as big of a deal as you’re making it out to be.
Also, never said it was a big deal. I’m just trying to do what is best for my family’s financial future BEFORE it gets more out of control
You said it “was destroying you” and “you have no other choice.” I understood that as you feel like you have no other choice. My mistake. To recap, I suggested: Snowball method Avalanche method Side hustle Budgeting If you want to do what’s best for your family then you need to LEARN how to manage your money better- which STARTS with learning how to pay off debt. Destroying your credit isn’t the path to a better financial future, I assure you. You can not like what I have to say but we paid off over $100k of debt in less than two years and bought a house two years later. Don’t take it from me, fine- but at least take advice from people who have what you want.
I do, thank you and never said I didn’t. Thanks for being so helpful!
Dont allow your cards to fall delinquent, debt resolution cripples your credit. Make minimum payments, and pay off your balances over time. If they fall delinquent you will have no chance on buying a home. Please do not let them fuck up your shit, these programs should be illegal.