debt consolidation

[JonBenetRamsey]

has anyone done this? and what is the best way? i'm about 6grand in credit card debt with is awful for me and i hate paying a shitload of bills. it seems easier to just have one bill and take big chunks out of it rather than pay a little of a bunch.

[D.H. Jenkins]

Here's how it works:

The consolidation company gets all your debtors and negotiates lower payments and interest. You send the company a check every month and they make payments on your behalf to said creditors.

This is a great idea, but the execution of it usually leaves alot to be desired. I've known 2 people that tried this and both got burned. Why? Because the consolidation company kept paying the creditors late which put their credit score even lower.

Your cheapest/best bet is to consolidate it yourself, buy taking advantage of 0% no-fee balance transfers. Simply transfer the outstanding balances from your other cards and make decent payments. If you can't do that, just call the credit card company and tell them to lower your rate so at least more of your payment goes to principal.

[Kid Brock]

Here's how it works:

The consolidation company gets all your debtors and negotiates lower payments and interest. You send the company a check every month and they make payments on your behalf to said creditors.

This is a great idea, but the execution of it usually leaves alot to be desired. I've known 2 people that tried this and both got burned. Why? Because the consolidation company kept paying the creditors late which put their credit score even lower.

Your cheapest/best bet is to consolidate it yourself, buy taking advantage of 0% no-fee balance transfers. Simply transfer the outstanding balances from your other cards and make decent payments. If you can't do that, just call the credit card company and tell them to lower your rate so at least more of your payment goes to principal.


I agree and well stated sir. Some of those companies are scams and the ones who aren't take forever to setup and put you another 2-3 months behind in your payments.

[saigon]

prosper.com

[Three Hole Puncher]

The Dave Ramsey show... XM 165 12PM-3PM ET

He's a liitle heavy on the bible shit for me, but he gives good financial advice... esp. when it comes to getting out of debt, managing credit, setting a budget, etc...

Good luck, bro.

[Myhairygrundle]

IMO, going to a debt consolidation for 6k is not necessary.

Some places consider that a bankruptcy and it's worse on your credit than a few lates.

My wife did that before we got married and it almost prevented us from getting the mortgage we wanted.

[novalia]

dude just go do it..
paying all that interest on 3 or 4 credits cards probably isnt leaving you enough left to chip away at the balances.. bite the bullet... maybe you'll do well and wont get screwed and then in a couple of years it will be behind you.. life is so much better once you get past debt.. it probably couldnt get much worse than it is now.. a little research will go a long way =)

[Exanimate]

I agree with the get a new credit card with 0% transfers, and consolidate them into one. If you have kinda shit credit, go to Beneficial or Citifinancial, or somewhere like that, and take out a loan for around 8500 or so. You will probably get hit with a high interest rate, but it least it will be on a set payment schedule, and you know that it will be paid off in a set amount of time.

If you own your home, do a home equity loan.

After you get it all into one, don't go out and rack up your credit cards again.

[novalia]

I agree with the get a new credit card with 0% transfers,

the problem with this is the interest rate changes to cash advance status after the introductory period ends.. which could be over 20%...

i agree with the second part of what you said.. a loan wouldnt be a bad idea.

i dont even think declaring bankruptcy is a terrible idea..

[Bill]

What's the rest of your financial situation?

Do you own a home? If so, get a home equity loan/line of credit and pay your credit cards off using that. Then pay off the home equity loan. Interest will be lower and it will be tax deductible.

Do you own a relatively new car? If so, sell it, pay off your credit cards and buy an inexpensive used car.

Be careful if you go looking for a credit card with 0% on transfers. Most of them are only 0% on transfers for a limited time and, if you can't pay those balances off in that period, they tend to have a very high interest rate once the introductory period expires. You might be better off getting a credit card that has a low interest rate on transfers that never expires.

[Trainable J]

I'm gonna agree with the knitter, Dave Ramsey is really helpful. My wife and I are doing his plan right now. It's tough, but, it'll be worth it when I own my house free and clear in a few years.

[D.H. Jenkins]

Just do what my sister does - she bounces everything from 0% card to 0% card every 6 months or so. She's paid off 2 cars virtually interest free doing that, as well as a year of college. If she can do it, fucking ANYONE can do it - she's no "rocket surgeon".

If you pay off all small creditors at once, (and learn to live within your means) then you'll only have the one payment and one card to switch around.

[AJellyDonut]

My advice to you is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, JBR? The bums will always lose! :action-sm

[JonBenetRamsey]

What's the rest of your financial situation?

Do you own a home? If so, get a home equity loan/line of credit and pay your credit cards off using that. Then pay off the home equity loan. Interest will be lower and it will be tax deductible.

Do you own a relatively new car? If so, sell it, pay off your credit cards and buy an inexpensive used car.

Be careful if you go looking for a credit card with 0% on transfers. Most of them are only 0% on transfers for a limited time and, if you can't pay those balances off in that period, they tend to have a very high interest rate once the introductory period expires. You might be better off getting a credit card that has a low interest rate on transfers that never expires.
well, i make around $290 a week, do not own a home and make 0 car payments. the reason i want to do this is the fact that i can move out of my mom's basement for $250 a month plus utilities and if i can get shit onto one bill, it would be much better for me. i dont care about paying more in the long run because i'm an asshole and deserve it and for the 0% balance transfer, that would be a bitch for me to get approved on. my mom did suggest going to my bank to get a loan for this.

[novalia]

declare bankruptcy.

[D.H. Jenkins]

If you're living at home rent free, then stay there and pay off your fucking debts, you silly goose!

[JonBenetRamsey]

If you're living at home rent free, then stay there and pay off your fucking debts, you silly goose!
i give my mom almost 200 a month. a lil bit more and no more yappin. if i was living rent free, i would gladly spend that money on a woman to feed my grapes in the nude montly.

[Budyzir]

well, i make around $290 a week, do not own a home and make 0 car payments. the reason i want to do this is the fact that i can move out of my mom's basement for $250 a month plus utilities and if i can get shit onto one bill, it would be much better for me. i dont care about paying more in the long run because i'm an asshole and deserve it and for the 0% balance transfer, that would be a bitch for me to get approved on. my mom did suggest going to my bank to get a loan for this.

Dude, I’m not trying to be disrespectful here but, how old are you? The reason I ask is If you are young, it that it may be in your best interest to stay at home, pay off your bills and then look to move out. If your living rent free, it would be much easier to pay off the $6K instead of consolidating, paying one bill, along with rent, food, utilities, so on and so forth.

Also, I wouldn't consolidate or take on another loan. Destroy your card and make the biggest payment you can till its gone. If your in a bad spot, see a credit counselor. They work with you and the creditors to help you pay it off.

Again, no disrespect intended, just trying to offer some advice.

Edit: just saw your last post. 200 is still less than 290.

[D.H. Jenkins]

i give my mom almost 200 a month. a lil bit more and no more yappin. if i was living rent free, i would gladly spend that money on a woman to feed my grapes in the nude montly.

Dude, no offense, but if you racked up $6k of debt while only having to pay $200/month, you will NOT do any better on your own; you'll be living on top ramen and ultra-cheap beer in no time, and will probably run up more debt and wind up back at your parents'.

[JonBenetRamsey]

Dude, no offense, but if you racked up $6k of debt while only having to pay $200/month, you will NOT do any better on your own; you'll be living on top ramen and ultra-cheap beer in no time, and will probably run up more debt and wind up back at your parents'.
oh i stopped using the credit cards. they're a thing of the past. plus i now have all the shit i need so no need to worry about blowing money on stuff.

and to answer another's question, i'm 23 and i do not live rent free. the mom demands rent. another reason i need out, she's too god damned controlling. i don't listen to her shit but it'll drive someone to murder.

[Bill]

declare bankruptcy.

He can't. The bankruptcy laws were changed last year to make it much much more difficult for people to declare banruptcy.


it seems easier to just have one bill and take big chunks out of it rather than pay a little of a bunch.



JonBenetRamsey,
I completely disagree with your above statement.

I'm going to suggest that you don't consolidate your debt (or just consolidate it to 4 credit cards). I think that you should attempt to pay your debt off every time that you get paid rather than making monthly payments. If the payments for your cards are due very close to one another, call a couple of your credit card companies and ask that they change your due date.

Optimally, you want your payments due around the 1st, 8th, 15th & 22nd of every month.

Figure out how much money you need to live and put that aside every week. So, for example, for the rent that you pay your mother, put aside $50 per week even though you may pay her monthly (your better off paying her weekly if you can). Use the rest of that money to pay into one of your bills. If you get paid on Friday, don't wait until Monday to see how much money you have left. Pay your debt before you piss it away. Include some money in your budget for "entertainment", but that shouldn't be a lot. Your goal should be to eliminate your debt as fast as possible.

In months with 5 paychecks, take advantage of that and pay an extra $50 into one of your cards.

Saving money for the month in order to make a single payment will take much more self control than it will to make a payment every week, on payday.

[NortonsGravyLeg]

Also if you're only making 290 a week after taxes you might consider either working OT prgetting another part time job or doing some side work. You'll have no social life but at least you can pay the shit off faster. I did it for a little over a year and managed to pull myself out...Im back in it a little for other reasons but Im already starting to pay it all back. Trust me bro dont let it get any worse it makes life really difficult once you realize you're an adult and you want to start taking care of shit in your life. I fucked myself up for a while and even after it was all said and done it takes forever for your score to go back up.

[Wrecktum]

Here's how it works:

The consolidation company gets all your debtors and negotiates lower payments and interest. You send the company a check every month and they make payments on your behalf to said creditors.

This is a great idea, but the execution of it usually leaves alot to be desired. I've known 2 people that tried this and both got burned. Why? Because the consolidation company kept paying the creditors late which put their credit score even lower.

Your cheapest/best bet is to consolidate it yourself, buy taking advantage of 0% no-fee balance transfers. Simply transfer the outstanding balances from your other cards and make decent payments. If you can't do that, just call the credit card company and tell them to lower your rate so at least more of your payment goes to principal.
i didnt read any more into the post but they acctually buy up ur debt and u pay one bill but you pay higher intrest rate to them so insted of having to pay 3 100 dollor payments at like 17% u pay a 150 at like 30%

[Budyzir]

oh i stopped using the credit cards. they're a thing of the past. plus i now have all the shit i need so no need to worry about blowing money on stuff.

and to answer another's question, i'm 23 and i do not live rent free. the mom demands rent. another reason i need out, she's too god damned controlling. i don't listen to her shit but it'll drive someone to murder.

Dude, nothing for nothing .... and I’m serious here, you need to find a better job. Look, at 290 a week, your making what, $18K a year, maybe $20K? Dude, I don’t know where you live but in NYC, your just about the poverty level.

Look, you got two choices, live a simple life or increase your income. Joke all you want about being crazy or what ever, in about ten years you’re going to be in financial pain. And, I’m not even considering a wife and kids here.

Financial security is not a joke, [serious tone OFF]

[Three Hole Puncher]

Two words... male prostitute.

No homo.

[JonBenetRamsey]

all jokes aside, i really need to get out of this house and the apartment i can get is dirt fucking cheap for north jersey. and other than my pay i do have a shitload of stuff i can sell and make a pretty penny off which should knock a third off my debt. i maybe should have said that sooner but i'm desperate here. i need out of my house and my debt.

[Bill]

i need out of my house and my debt.

That's why I think you should pay down your debt as soon as you get paid every week. That way, you can't be tempted into spending your paycheck on something else while you are waiting on the next bill.

[D.H. Jenkins]

Just remember - you'll only have "...all the shit i need..." until it breaks down, gets stolen, lost, damaged, etc...

$290 a week may be plenty to sustain you and even pay a little towards your debt if you live like Mr. Pench Penny, but one apartment break-in or a bad transmission and there goes 2 months pay.

That being said, I left at 18 making $180/week and paying $400 + utils. I was back home a year and a half later, of course, but I did finally learn how to manage money...

[Haeder]

http://ray.met.fsu.edu/~bret/amortize.html

The link above is to an amortization calculator. If you borrowed $6,000 at 8% interest for one year your monthly payment would be $521.93. $6,000 in credit card debt wiped out in one year.

You might need your mom to co-sign for the loan. Banks aren't too wild about refinancing unsecured debt without security of some sort.

If you do this, you'll probably have to live at home for another year. I know that stinks and you don't like it but you don't have a lot of options. $290/month plus utilities will probably be $400-$500/month or more.

Good luck bro.

[Warfarer]

IMO, going to a debt consolidation for 6k is not necessary.

Some places consider that a bankruptcy and it's worse on your credit than a few lates.

My wife did that before we got married and it almost prevented us from getting the mortgage we wanted.

I was going to say that I have read that the consolidations are sometimes considered a bankruptcy and sometimes it weighs really heavy on your credit score. Be broke for a year and pay it back or take out a loan to pay it.

If you own your home, take out a small home equity loan and pay it since non-collateral loans tend to be high interest also. But it is something worth looking into.

[Cunt Hair]

earlier on, someone mentioned prosper.com. It really is a fantastic website... people lend to other people with APR based on severity of credit history. All loans are 3 year terms, and funded partially by many different people. If you default, it has the same consequenses, but it is a great way to consolidate debt if you can beat the rate a bank/agency can give you. It really is worth checking out.

[CreativeName]

I am currently ~18k in CC debt, 26 years old, bachelors degree, and make under $50k/yr. I have balance transfered them all from CC to CC currently paying on 5 of them which have all of my balances. I have learned my lesson and no longer rack up balances on my CC's.

As far as balance transfers go, they *can* go back to a very high 20+ APR after the 0% (or other percentage) grace period. I have had offers which only go to 7.9% for the rest of the payments. I always watch for this though.

I know if I transfer $10k to a CC and it has a 6 month 0% APR, it won't be paid off in 6 months so if it goes up to 20% APR then that's a very bad idea.

So stick with the "% till paid" transfer offers if you get any. I have about $5k on a CitiBank card and it's 3.99% for the life of it. I pay ~$15/month in interest on it. I also have about $1200 on a Capital One card with a 1.99% APR for the life of it (I have a $1500 limit on this one for some odd reason even though I've had it for 8 years now and it's a Platinum).

My suggestion to the thread starter is to stay at home. $200/mo is much cheaper than $250/mo plus 1/5 of the utilities (assuming you live with 4 other people who actually pay their bills). I know parents can be a hastle, but it's you best bet.

[NortonsGravyLeg]

I am currently ~18k in CC debt, 26 years old, bachelors degree, and make under $50k/yr. I have balance transfered them all from CC to CC currently paying on 5 of them which have all of my balances. I have learned my lesson and no longer rack up balances on my CC's.

As far as balance transfers go, they *can* go back to a very high 20+ APR after the 0% (or other percentage) grace period. I have had offers which only go to 7.9% for the rest of the payments. I always watch for this though.

I know if I transfer $10k to a CC and it has a 6 month 0% APR, it won't be paid off in 6 months so if it goes up to 20% APR then that's a very bad idea.

So stick with the "% till paid" transfer offers if you get any. I have about $5k on a CitiBank card and it's 3.99% for the life of it. I pay ~$15/month in interest on it. I also have about $1200 on a Capital One card with a 1.99% APR for the life of it (I have a $1500 limit on this one for some odd reason even though I've had it for 8 years now and it's a Platinum).

My suggestion to the thread starter is to stay at home. $200/mo is much cheaper than $250/mo plus 1/5 of the utilities (assuming you live with 4 other people who actually pay their bills). I know parents can be a hastle, but it's you best bet.

That sucks bro, although reading that shit doesn't make me feel so bad about my debt.

To Jon Benet: I agree about staying at home as long as you can stand it. You will be better off in the end. Your credit score doesn't go up no matter how long you rent. If you can't stand your mom then work OT all the time or get a second job or just avoid her as much as humanly possible.

[Mesothelioma]

dude, my advice is to stay at home as long as possible...and get a new job or maybe a second part-time job. that way you can earn some extra cash to pay off the cc debt and it'll keep you away from your mother. $300/wk ( i rounded) = $1200/mo = 14,400/yr. So you probably clear $12,000. $1200 of which goes to your mom for rent. For argument's sake, let's say, after all that, you clear 10K. set youself a budget each month - insurance, food, clothes, spening cash, savings....then divide the remainder between the cards.

i'm only 25, but i don't think 6k is worth consolidating....keep paying them off individually. make more than the minimum and you'll be in good shape.

[Taso]

I didnt read through any of the previous posts, maybe what I did was repeated by someone else but eh, i dont care.

A few years back i was about 5grand in on my cards and such. I was only 20 and it was killing me. I did the debt consolidation program. It helps alot, but I think and feel that I overpaid for their services. The company I started with called Visual Credit, basically charged me $100 just to start up, then 25 a month to process my payments. I was giving them 100 a month for 3 cards.
In the beginning I basically just gave the 100 a month and saw my debt chipping away slowly, so slowly it actually bothered me. I took it upon myself to start sending extra money every month on the side, outside of the debt program. I was just mailing checks directly to the cc companies and it started to lower my debt quicker. Originally under the structure that my debt relief program set up, they planned it out for me in a 2 and a half year period. The way I did it, all my debt disappeared in under a year.

The thing the company did for me that I dont think i would have been able to do on my own was lower my APR from the 30% they jack it up to all delinquent accounts to a 14% rate, which helped alot.

But I dunno in the end i felt alot better not having to worry about paying off cards. It feels very good to not have to get that monthly bill.

[abudabit]

In the end, the only thing that will get you out of debt is putting as much money as you can as rapidly as you can to paying off your debt. You can consolidate and do all these other cute tricks, but unless you have equity or settlement money you aren't getting an improvement on your loans. And since you clearly don't have equity or settlement money, the only option you have is pay pay pay. The faster you pay the better. As soon as you get your paycheck send some of it off.

The only true silver bullet that exists is negotiating a settlement - something you can't do unless you are able to pay off like 60% of your debt in a couple months time. Impossible if you ask me. And even then all you are getting is like a 25-40% discount (which is a lot don't get me wrong).

Put $300 into your debt each month and you are done in 2 years. And when you are done paying it off, you will suddenly be making $300 more than you are used to spending, so there is the added benefit. You will become used to saving, something you might have had a problem with if you are $6000 under at such a young age.