Books On Credit Card Debt

Over the past years and due to certain circumstances, we have a lot of credit card debt - approx. 50,000. I have never looked into a second mortage but in researching debt reduction I have seen it as an option. Should we get a second mortgage to pay off these debts? What type of interest can I expect on a 2nd mortgage with average but not great credit. I am drowning here and and clueless as to what to do - I am beginning to read Dave Ramsey's book as well as Scott Bilkers in hopes of finding answers. Thanks!
Sorry - just looked at the title and realized that I can no longer type!
I should add that a home equity loan isn't an option as we refinanced a couple years ago to put an addition on the house and increase its value.

Absolutely not! Don't do it. Your big problem isn't financial, it's behavioral. Most of the answers you've gotten are from financial types that have logics about least amount of interest, etc, but they're missing the issue that refinancing won't fix your habits, and you'll probably fall under the false perception that your cards are now free for more charging once their balances are transfered.
Been there, done that, so believe me, it will happen.

Finish reading Ramsey, he's your answer.

Once of the respondants did suggest the debt snowball which is one step on the right track.

We're doing them now and they're working for us. So far we've paid $11,000+ in debt over the last 5 months, and put aside an emergency fund (and we're far from making big bucks)

Here are the steps:
Pre-steps
-get current on your debts - at least be paying minimums up to current month
-cut up all your credit cards (yes, all of them.)
-sit down with your family and explain that you don't want to live like this any more and that you want a better future for them. You guys are sinking and it will take a family effort to surface and eventually swim out of this mess. Once you've got their buy-in ...
-stop paying extra on any of debts, including extra mortgage payments (we were doing this one)
-do a simple budget to spend less and save more - we found we were spending Hundreds a month on going out to eat and see movies. Stop all that. Cook in. DVR movies on cable or get them from your library for free.
-stop contributing to retirement temporarily or any other savings or investment accounts. Yes, even if your companies match - it's just temporary, you'll get back to investing later.
-adjust your Withholdings through your employer to get more now and less tax return later. It's your money, may as well have it now.
-have a rummage sale, sell any extra cars, and get out of leases if at all possible - they're a scam.
Now - the real steps:
1. Put $1,000 into a savings or MM account as an emergency fund (EF).
2. Sort all your debts from smallest to largest. Pay minimum on all except the smallest. Attack that one with all the money you've scraped up (except for the EF) and your necessities (food, shelter, trasportation). Once you've paid the smallest, use what your were paying on the first plus the seconds minimum to attack that one. This is known as the debt snowball as it keeps increasing as you go. Keep it going until their all paid. Living frugally is key, during this period.
3. Now beef up your $1000 EF to 3-6 months of expenses (not income)
4. Resinstate future and retirement investing to at least 15% (match your companies IRA contribution, and put the rest of the 15% into Roth IRAs.)
5. Invest in college funds for the kids if you have them
6. Pay off the home early
7. Build more investment and retirement wealth and start giving what you can.

Hope this helped! Again, don't fall into the trap of using debt vehicles to get out of debt. Pay what you owe. Live on less than you make and you'll get out of this.

pbaez

If you need more ongoing support, join our yahoo group Dave Ramsey http://finance.groups.yahoo.com/group/Da ve_Ramsey_Debt_Beaters/

2006-04-07 12:28:00 by ajwhite

With universities charging upwards of $50000 for a year of tuition—without taking into consideration room, board, books and more—is it worth the ...

I've had a full-time job since I was 15 and I have been the support system for my ENTIRE family since (no joke). Ok so i've leaned on my credit cards for everything: rent, groceries, books, tution, lunch, metrocard... everything for the past 2 years. Now the lousy job my mom had laid her off, she was helping me but now I do not know what to do... Every bit of me is stressed and I am almost tearing confessing this to the public. I honestly cannot sleep at night anymore and have anxiety attacks that results in over eating... I've gained 15 pounds over the summer alone... I cannot believe I am saying all of this but I desperately need advise. I am in my senior year at college and was hoping to go to law school but I just can't cope with anything anymore. Please help

Do not stress over it. It is only money. There is very little they can do to at this point. I assume that you have very few assets.
You credit may be ruined for awhile, so what?
Learn to get by on what you earn. Stay in school. In a few years all this will be in your past.
I wish you the best..

2007-09-11 08:46:14 by Deprived of Sleep

Price: $19.95

I was just served by the sheriff a paper showing the credit card lawyers are taking me to court due to a bad debt it is about 2000 with fees, etc. The sheriff advised I had 30 days to respond to them. I do not have money to pay, no job, assets etc. I do not want the judge to file in their favor and be on my credit report. How can I get out of this. Or at least put a hold and try to negotiate the debt down by proving I do not have the money to pay. I read the debt book by Kevin Trudeau but it does not go into judgements... Please help!!!!!

You should appear in court anyways and plead your case to the judge. If you don't show, you get a default judgment against you, they can attach leins to any assets, garnishments to your work once you start working, they will find you, and/or any bank account with your name on it, and it can be up to 100% of what is in the bank. Show up at the court date and plead to the judge, and show at this time you have no income. Good Luck!!

2009-01-16 08:33:48 by msoctober

Price: $24.95

I am a student with about 3 years left of school before I start making money and I have some serious credit card debt! I owe about $12,000 to Visa and about $7,000 to AMEX. Most of that money has gone to tuition, books, & fees not covered by aid and loans.
I have been reading other post about this matter and am kind of confused. Should I contact the creditors before they go to a collection agency and try to work out some kind of deal (like litterally pennies on th dollar)? How long before they sell the account to collections? I want to call them tomorrow- I've been avoiding their calls like the plague! How do I clear this up? Can I?

I have no income but my parents offered to help as much as they can. If they take me to court what can happen (supposedly I already have a case number) since I have nothing and no income? I've heard some people say that when I call them I should say something like, "I'll pay you *** if you agree to take this off of my credit report." Can I really do that?

Call them right away and make some kind of arrangements for payment. Most likely, they won't accept pennies on the dollar. Have you been served with a law suit? If so, make sure you show up in court and show that you've been making minimum payments. But, make sure you've been making them. The case number thing might be a ploy. If you haven't been served, now's the time to start to settle with them, before they go to collection. This will ruin your credit for approximately 7 to 10 years. Take care of it.

2006-12-28 21:51:06 by macboy987654321

While in college, I built up about $16,000 in student loan debt and about $10,000 in credit card debt to pay for classes and books. Considering it was about $75,000 total for my degree, I'm not too upset but the interest is killing me on the credit card. I need to get it transferred to a lower rate. I thought about a credit card balance transfer but I would prefer something a little more permanent. I'm figuring on paying about $600 a month at least, but hopefully more like $750 a month. If anyone has any advice, I'd really appreciate it. Thanks in advance.

Ok here is how I see it. Consolidating the credit cards is simply a way of extending the misery. The student loan payments are not big - because the lender hopes to be getting paid by you until your kids are going to college - quite literally.

If you can possible increase your income even by working one weekend day or night a week, even doing something menial, you can make about enough to make the student loan payment.

Then if you could apply the entire 750 to the credit cards they would be paid in full in just 15 months. This would free up all those funds for student loans and in just another year or so you could have all your school debt gone! Plain fact is that consolidation is just a way of extending your debt. You can't get out of debt by borrowing. The best thing to do is to buckle down and pay it off fast and high interest rates provide lots of motivation!

To be being free in two years beats any consolidation as far as I am concerned and over 15 months the savings are so minimal on unsecured debt even if you could get it from 18% to say 9% you would look back and save perhaps 500 dollars but the odds of you staying motivated to pay it off with a reduced payment and interest rate are not very good and it is likely that you will extend the life of the loan longer and that will cost you far more than any savings. It is just human nature that we work to get out of that which is painful.

2009-03-30 19:22:08 by Mike R