Debt consolidation

[getbent]

We were thinking of doing debt consolidation for our credit cards or taking out a personal loan. Any one do this? Any advice, tips, warnings, etc.? Or would it be better to use the snowball effect and not take out a loan? I don't want anything to mess up our credit. Someone mentioned to me that a debt consolidation loan looks bad. Thanks for any help/advice.

 

[racingal]

We took out a personal loan to do our own debt consolidation instead of taking a debt consolidation loan.

 

[getbent]

We took out a personal loan to do our own debt consolidation instead of taking a debt consolidation loan.

I was wondering about that too. Did you have to use something for collateral? We do not have anything to match what we need to borrow.

 

[KDENISE977]

We were thinking of doing debt consolidation for our credit cards or taking out a personal loan. Any one do this? Any advice, tips, warnings, etc.? Or would it be better to use the snowball effect and not take out a loan? I don't want anything to mess up our credit. Someone mentioned to me that a debt consolidation loan looks bad. Thanks for any help/advice.

creditors frown upon any type of debt consolidation and in some cases actually will send the account to an attorney's office immediately after receiving any notification that the debtor is working with one.

 

[Agee]

If you own a home and have a decent amount of equity, you might want to consider a hone equity line of credit?

 

[getbent]

creditors frown upon any type of debt consolidation and in some cases actually will send the account to an attorney's office immediately after receiving any notification that the debtor is working with one.

Even if you're not behind on payments? We were just trying to see if getting a loan to pay them off would be better ( & cheaper) than continuing to make the individual payments. Our income was reduced significantly and paying the minimum is going to take forever plus cost a lot more.

 

[Chasey_Lane]

Call your credit card(s) company and see if they will work with you to reduce your interest rate. If you are able to do this, you might gain some leverage trying to pay off balances.

If you have a 401(k), IRA, etc., take out a distribution/ hardship/ loan.

Get a PT job to make extra $$$ to pay off debts.

 

[getbent]

If you own a home and have a decent amount of equity, you might want to consider a hone equity line of credit?

I thought about that. I'd have to call and talk to them. We've only been in the house for 5 years this December and we have a deferred govt loan that shows up as a 2nd mortgage. It was to help us as first time buyers. Not sure they'd go for it.

 

[KDENISE977]

Even if you're not behind on payments? We were just trying to see if getting a loan to pay them off would be better ( & cheaper) than continuing to make the individual payments. Our income was reduced significantly and paying the minimum is going to take forever plus cost a lot more.

The first thing debt consolidation companies do is have you send a cease and desist (meaning the lender cannot contact you) and a letter of authorization (you authorizing them to negotiate on your behalf). Once a creditor receives a cease and desist you're saying they cannot contact you for any reason/ ie. collections departments can't call/write/etc. That's when it goes to legal/collections department (attorney's office). They see it as you are not willing to repay or don't have the ability to repay the debt so they look to secure a judgment before other creditors jump in line. PM me if you have specific questions

To answer your question, no, you don't have to be delinquent for this process to start.

 

[getbent]

The first thing debt consolidation companies do is have you send a cease and desist (meaning the lender cannot contact you) and a letter of authorization (you authorizing them to negotiate on your behalf). Once a creditor receives a cease and desist you're saying they cannot contact you for any reason/ ie. collections departments can't call/write/etc. That's when it goes to legal/collections department (attorney's office). They see it as you are not willing to repay or don't have the ability to repay the debt so they look to secure a judgment before other creditors jump in line. PM me if you have specific questions

To answer your question, no, you don't have to be delinquent for this process to start.

Thank you. Like I said I'm not trying to ruin our credit or anything, just looking to cut back on outgoing funds. We have already cut Dtv out and the home phone. Just looking to get these paid down as quickly as possible.

 

[Christy]

We were thinking of doing debt consolidation for our credit cards or taking out a personal loan. Any one do this? Any advice, tips, warnings, etc.? Or would it be better to use the snowball effect and not take out a loan? I don't want anything to mess up our credit. Someone mentioned to me that a debt consolidation loan looks bad. Thanks for any help/advice.

I used this place many moons ago. http://www.greenpath.com/ I would highly recommend it. They work directly with your creditors to get your interest rates dropped to a reasonable percentage rate. You make one payment to greenpath every month. You won't be able to get any other loans or credit cards while using this, but it is actually good for your credit when you finish up with them.

 

[PeoplesElbow]

First you have to make sure that the company isn't having you default on your debts to buy them for pennies on the dollar (many do that). This will not only ruin your credit but down the road you may get the bills anyway. The best way is to take care of it on your own if you can.

 

[getbent]

Thank you.

 

[Admin]

My advice would be to get on the track to living debt free.

http://www.daveramsey.com/home/

Few better feelings in the world...

 

[getbent]

My advice would be to get on the track to living debt free.

http://www.daveramsey.com/home/

Few better feelings in the world...

I came across his site while looking things up about paying debt off. That's where I learned about the snowball effect.

 

[GURPS]

We were thinking of doing debt consolidation for our credit cards or taking out a personal loan. Any one do this? Any advice, tips, warnings, etc.? Or would it be better to use the snowball effect and not take out a loan? I don't want anything to mess up our credit. Someone mentioned to me that a debt consolidation loan looks bad. Thanks for any help/advice.

go talk to your bank about a debt consolidation loan ... the interest on the loan can be cheaper than on multiple CC's

the bank will usually require you to close any CC's to be paid off by this method, to keep you from running them back up.

 

[DEEKAYPEE8569]

go talk to your bank about a debt consolidation loan ... the interest on the loan can be cheaper than on multiple CC's

the bank will usually require you to close any CC's to be paid off by this method, to keep you from running them back up.

A few years ago, I had two CC's and was stupidly in over my head. Dad co-signed a loan for me that paid them off and told me, 'Now, you're messing with MY credit; if you miss ONE payment.....' well, you get it. Didn't miss a one.

 

[ProfMoneyWise]

I came across his site while looking things up about paying debt off. That's where I learned about the snowball effect.

I completely agree with this. Read The Total Money Makeover by Dave and look for a Financial Peace University Class (use the Class Finder button found on his site). I know of one going on at Saint Johns in Hollywood and Mitzi would be glad to have you join I bet.

The best way out is one dollar at a time. Do a budget. Name every dollar. Stop all unnecessary spending and cut, cut, cut. Sacrifices made today will get you to the end quicker and once you start snowballing that thing called an interest rate becomes less and less significant.

It works, believe me.

 

[getbent]

Thanks for all the input. Sorry I haven't been keeping up with the thread as much as I should. My classes started up this month and that's about the only internet time I get.