Credit Card Counseling Service

We have 3 credit cards, all maxed to and over the limit. I am consulting a credit counseling service but my husband doesn't want it to ruin our credit. I personally think it will get us out of debt A LOT quicker and we're not filing bankruptcy. It may give us a blemish on our credit. But I think it's worth it.

Be careful with so-called credit repair businesses. Many are a rip-off and charge you to virtually nothing. You can do better contacting the credit card company yourself and work out payment terms.

2006-05-23 19:49:17 by animalover

Consolidate credit card debt by taking out a personal loan or doing a credit card balance transfer. Consolidate credit card debt with tips from a ...

I am thinking about consolidating a lot of unsecured debt using a debt/credit card counseling service. How will use of that sort of service affect my credit rating long-term?

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. There is a better way.

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

2009-04-17 09:08:06 by jimthephilosopher

Price: $1.99

Are there better routes to go when in credit card debt rather than debt services?

"Debt negotiators," posing as non-profit organizations, can ruin your credit even further, advising you not to pay your credit card bills at all. They also charge upfront fees, maintenance fees, and monthly fees, all of which are supposed to be placed in a "trust" account. Then, after many months have passed, debt negotiators finally convince creditors to settle for less money than was owed, making yours an "uncollectible account."

That tactic not only ruins your credit, due to the many "over 90 days late" remarks and collections notations, but all the money you supposedly saved -- which was actually money you owed -- will be considered as income by the IRS! In other words, if you owed $20,000 and settled for $12,000, you'd be required to list the $8,000 difference as income!

Credit repair companies promise to help clear up your credit problems. They write letters to credit bureaus, stating that various listed information is false, so the agencies will remove that information while they investigate your account. During that time, the credit repair company sends you a clean credit report, thereby giving you the false impression that you now have good credit. But after you've paid off the credit repair company, you'll discover that all the negative items will soon reappear on your report. get more information from: http://www.card-gallery.com/

2007-02-06 11:59:56 by Linda Lee

Price: $1.99

I paid off my debts through, Superior Debt, about 1.5 yrs ago, I am now being sued by a lawyer for one of my credit cards! What do I do?

I've heard that a lawyer can buy the paper and sue you for the money, which goes into their own pockets! Is that true? My credit card on my credit report shows that it is charged off.

What do I need to have prepared for court. How much will it cost? Any advice is appreciated! thanks.

Charged off does NOT mean forgiven, it means it has gone to collections as delinquent and is still due. Do you really know what Superior Debt did with the money you paid them?

You can request to have the debt verified if not sure it is yours. You should also do a web search for "credit statute of limitations" for the state (from when you last made a payment, assuming you did not leave the state). You should either be prepared to pay the debt, work out a settlement, or if you do nothing they may get a default judgement.

2008-07-15 09:34:41 by Tara

This question is related to my Mom who has a very large balance $7000, and because her income is limited, the interest is eating her up! She lives with me now, is nearly 70 and never plans to buy a house again or car. I've recommended CCCS because they will at least stop the interest so she can finally make a dent in the balance when she pays her $200 a month (all she can afford). Her brother told her to file bankruptcy, but I didn't want her too.

Talk to a Bankruptcy attorney, as every case is different.

2007-05-15 12:13:43 by nancy s