Credit Card Debt Percent

me and my friend have this little bet going, he thinks i can't do it

1) Pay it
2) Engage in a risky tactic of deliberately defaulting on your cards and hoping the creditors settle at 50% without taking you to court
3) File for Chapter 7 bankruptcy

2009-08-01 19:12:07 by Brady

: "The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent ...

I am paying 32 per cent on my credit card.I contacted the co. and they will not reduce my rate.I have asked them twice.I have a balance of $6000.What can I do?This is an unsecured
credit card.

Go to CCCS. Check with the local United Way office. They may be able to get your rates lowered.

2007-10-21 18:07:12 by John W

What do you really pay with 25,000 in credit card debt at 25 percent and how many years does that take to pay off?

It depends on how many payments you make and the amount the payments are. Include this info and it's a cinch.

2008-05-08 19:37:42 by WM

My mother's friend owes $16,000 on a credit card and the bank has been charging her 30 percent interest. Eventually she just refused to pay.

After months of threats the bank relented and offered her a five-year plan to pay off the debt at six percent interest.

She says that will simply be paying back the bank its 30 percent (in the total accrued so far) over a longer time. Plus, she can hardly afford the $325 monthly payments.

Her debt is more than 10 years old and she's payed back so far more than twice what she borrowed on the card.

She offered the bank 10 percent to call the account settled but they scoffed. She wonders, given that they did finally quit threatening her and made her an offer, are they likely to soften further if she holds her ground and prepares for bankruptcy?

Would the bank be likely to accept a counter offer from her of their five-year-plan on a lesser total amount?

How much would the bank get if they wrote off the account and sold the debt?

The bank can't sell the debt. They eat it and claim it on their corporate IRS tax return as lost income from an uncollected debt. And your friend will receive a parallel filing notice in the mail from the IRS of this new "income" to her that she will have to pay taxes on in the year that occurs. And the IRS will not cut her a deal anywhere close to what the bank will-don't let that happen!

If she's "collectible" in the eyes of the bank (high income producer) they will not be easy to deal with. If she appears uncollectible for the whole amount the typical industry offer is about 40% of the total in a lump sum. Their monthly payback offer is generous and certainly better than what the IRS will do after she receives the 1099 lost debt income statement.

In summary, I suggest she work out a slow payment plan with the bank or maybe a relative or friend to help her come up with 30-40% of the debt total and make an offer in compromise.

Good luck! Tell her, in the future don't use credit cards to buy things you couldn't otherwise afford-ever.

2007-08-04 19:20:04 by king henry viii

I've got a lot of credit card debt in the 25 to 30 percent interest rate. I have to borrow from my retirement account to make my payments and pay my taxes. Recently I was called by a company that wanted me to fax my credit card statements to them. They said they would reduce my debt by negotiating with the banks. I would then start making payments to them and would be out of debt in two and a half years. How can I straighten out my debts?

Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.

A. Have a garage sale and sell anything that you no longer need or want.

B.Get a temporary part time job, if you have one, get another.


Here is a plan that can help you. If you work the plan, the plan will work for you:
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 and make no more late payments. 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.

You can do it and it isn't as hard as you think. Just follow the plan.

2009-08-18 10:21:09 by lionel