Bryce asked:
I don’t have a lot of debt, but I am almost two years behind on a single credit card, have two other credit cards, medical bills, school loans, and currently my wife is pregnant and her medical bills are beginning to pile up. It is somewhere in the range of $7,000-$10,000, we want to get a loan for our first house, but I don’t have good credit and she has mediocre credit.
I don’t have a lot of debt, but I am almost two years behind on a single credit card, have two other credit cards, medical bills, school loans, and currently my wife is pregnant and her medical bills are beginning to pile up. It is somewhere in the range of $7,000-$10,000, we want to get a loan for our first house, but I don’t have good credit and she has mediocre credit.
I was wondering if anyone knew of some good debt consolidation websites or counselors to help us out or anybody who knows really anything about debt consolidation at all.
Thank you.
If I declare bankruptcy now I can’t get any loans or credit for seven years and I live in an apartment and that will definitely hurt my chances of singing a new lease.
I also have car loans.
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In this credit market you don’t have a chance. You need to declare bankruptcy and wait a few years to try for a house.
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Most of those debt consolidation places are rip offs. They make promises, make you pay fees, and use your money to pay your bills. Often times, your credit gets ruined in the process.
Look up your local credit counciling agency run by the state. Find yours at. Also, look up Dave Ramsey. He has a talk show, and councils people on debt all the time on his show for free. Don’t pay someone to do what you can do yourself!
Consolidating debt isn’t going to make it go away or make your credit better, either.
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Debt consolidation websites do exactly what you can do yourself but they charge you lots of fees. The best advice I can give is visit daveramsey.com and read the 10 baby steps to financial peace. Your credit score is only an I LOVE DEBT SCORE!!!! hang in there and really visit dave ramsey’s website. It has helped me greatly.
God bless,
Matt
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Try Consumer Credit Counseling Services. you find find them online, or in your local yellow pages. . First you make an appointment, then they will you send you paperwork to fill out about all your debt, income and monthly expenses. At your appointment they will consider your situation and determine a monthly payment. They are a non- profit organization that will work you and your creditors. It will actually help your credit rating and they may be able to help you financing for a home loan.
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Pay your debts one at a time. Don’t consolidate. It is a rip-off, plus you will be taking low interest (student loans) and no interest (medical bills) and combining them into one higher interest longer term loan. This is how they make their money. You end up paying more in the long run. Try this method, it is motivational and effective:
1.Gather all debts
2.Arrange from smallest to largest; write each debt and amount in order on a sheet of paper. Include the minimum payment of each.
3.Pay the minimums on all EXCEPT the smallest debt. On this one put every extra penny towards until it is gone. Cross it off the list
4.Move on to the next smallest debt. Pay the minimum on it + the minimum from the debt you paid off + every extra penny you can come up with until it is paid off
5. Continue this pattern until you are debt-free
Rent for now. Buy when you are stable and debt-free. It is in your best interest not to jump into something you cannot handle and there are many expenses added when owning your own home, namely maintenance. Things like a leaky faucet can quickly turn to a flood and until you have an emergency fund built up, can be hard to deal with. If you rent all you have to do is call the landlord and be done with it.
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Nowadays, many people can get into a bad credit situation if they do not keep track of their income and expenditure. Many young executives suddenly find that they are being offered credit cards by various companies. Those who are sensible will find a credit card that suits their needs, sign up, keep track of their purchases pay off their credit card bills in full each month, and ignore offers from other companies. There are others who may be dazzled by all the credit on offer and will end up with credit cards from several companies. They may easily end up making lots of purchases on credit while making the minimum payments on their cards.
Then, one day they realize just how much debt they are in when they need a debt consolidation loan to get out of a bad credit situation. At the Debt Consolidation and Debt Reduction Service, we do not give you debt consolidation loans. We help you reduce your debts by 40 percent to 60 percent and your payments by 40 percent. We see to it that you pay no interest late fees, or penalties. We get you out of debt, and out of a bad credit situation, within three years. We ensure that you receive no more harassing phone calls from creditors by negotiating with them.
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The Wall Street Journal says that the entire Debt Collection industry is full of scammers and cheaters. They get you at a very vulnerable time in your life. So the answer is that there are no “good” consolidation websites..
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Please do not do “debt consolidation”. It is not free and it will take you longer to become debt free. You can do it faster and cheaper on your own. Here is a plan that can help you. If you work the plan, the plan will work for you.
A. Have a garage sale and sell whatever you don’t use or need and use that money to pay down your debt.
B. Consider getting a temporary part time job and use all of that salary to pay off your debt quicker. It is better to have a no fun year
than a no fun decade.
C. Consider selling the cars and paying off the difference. Buy cheap, reliable cars for cash. It is better to owe the $3,000 difference than to owe the $20,000 loan balance on a car.
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, if you are not already, and make no more late payments, if you have had any. 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.