dealing with debt?

Question

im only 22 years old, im not in bad debt, but enough to keep my digging for money...i guess im about $4,000 in, some of you may say thats nothing to worry about, but i cant afford to pay $300 a month on each to lower it...back last year i enrolled with a bill consolidation company, at the time i thought i found the answer! but to my dismay they screwed me over more than anything, i was paying them about $290 a month to make my payments for me, then all of a sudden i was getting calls from creditors saying my payments were over 2 months late and never on time which i was paying late charges instead of the intial payments. Recently i thought about inrolling with another, trying to find one that was possibly approved by the government or state. My question is how can i compromise with the creditors myself, instead of putting my money on the line? Do they have like "hardship" departments? please help!

i cant get rid of my car, its paid off, i have a 45 min drive to work everyday, and we have no public transportation

Answer 1

Debt consolidation is not the way to go. You pretty much get hosed no matter what. Here is the best way to handle your current situation...
You CAN afford it, but it will take some sacrifice. You need to look into getting a second job so that you can start to pay off your debt. You also need to start thinking about what bills you have that you can do without. Most people don't really NEED a cell phone, and especially don't need the plan that they are on, and don't need to talk as much as they do. You don't NEED to pay for cable or satellite TV, if you can't get good reception you can get BASIC cable for about $15/month. You don't NEED Netflicks. You don't NEED an expensive, brand new car, etc., etc. While you may not have all of these, most of us have several bills that fall into the "frivolous" category. You cannot afford these bills as long as you have debt that you cannot afford. If possible try to find MORE than what you need for your minimum payments coming in each month, but if that is all you can find, you will be fine.

Once you figure out how to get some extra money coming in and /or less money going out, you need to list all of your debts, from smallest to largest amounts owed. Perhaps your smallest debt is a gas card with $300 on it, for example. This should not just be credit card debt, either, but also your car, school loans, mortgage, etc. In addition to writing down how much you owe against these, also write down how much your monthly payment is.

Now, if you have not already done so, cut up every credit card. If you want to keep one for emergencies, do so, but make sure it REALLY is for emergencies, and we will talk about how to get to a point where you won't need it later. The way I recommend making sure it is really for emergencies is to actually freeze the credit card in a bowl of ice. Then, you really have to think about it before using it.

Back to your list of debts... Do whatever it will take to pay off your smallest debt as quickly as possible. Perhaps you can have a garage sale, or you can work some extra hours, or you may have decreased spending and increased income enough that this will be easy. If that card had $40/month payment, for example, do not think that you have another $40/month. Instead, take that $40/month and pay extra on your next smallest debt. So, if your next smallest debt was $800 and had a $70/month payment, you would be making $110 payments on that debt until it is paid off. Then, on you next debt, you would be paying an extra $110 on your payment. Keep doing this until all your debts except your mortgage (if you have one) is paid off.

The last thing you want to do is get rid of that frozen credit card. Since this is your "emergency" card. We replace this card with an emergency fund. $1500 will cover most emergencies. You want to get $1500 in a saving account for emergencies only (car repairs, traffic tickets, etc.). After all this is done, you will want to continue to save money, both for your emergency fund, and to buy the things you want so you don't rely on debt again.

Answer 2

I can't help you regarding your question on "hardship" departments with your creditors, but I can tell you this. The trick is NOT to amass any more debt. Get rid of those credit cards and learn to live on your current income without getting into any more debt, no matter the sacrifices you must make. And then invest in your debt! I took the Invest in Your Debt seminar and it changed my life. Line up your debts from smallest to largest, determine how much you can pay per month toward those debts. Say you have $200 extra per month to pay toward debts. Pay off your smallest debt (let's say a Macy's account at $54) and the extra toward the next-smallest debt. Keep going, making only minimum payments on the other accounts, until it's all paid off. Once the credit card and car payments are paid off, and you continue not to get into any more debt, you can even pay off a mortgage in like 10 years! It's incredible, but you must stick to it for it to work. You can retire at 55 a millionaire, it's that incredible.

Answer 3

You can call you creditors and tell them how much you can afford to pay. They will listen, because they'd rather be paid slowly than to not be paid at all. First though, you have to create a personal budget. It has to be realistic! You have to get rid of all your unnecessary expenses, i.e. cable TV, extras on your phone service, mobile phones, car!, etc. There may be a life coach at your local YMCA/YWCA that can help you create a budget for yourself, and help you to consolidate your debts. Your bank may also be able to help you with this.
Essentially, you have to live frugally until you can really make your ends meet. It's not easy, but once you learn how to do without the basic luxuries, you'd be amazed at how much $ you can put aside.

Answer 4

You can contact your credit card company directly and tell them you want to pay your credit card off. Most have plans where they make an automatic withdrawl from your bank every month and they will not allow you to make new charges. If they balk you can tell them that you will get a new credit card and transfer the balance. Credit card companies make money off the interest they charge you, so they would rather work with you to keep your business then lose out to one of their competitors. There's also a good chance that if you enroll in the automatic payment plan that they will lower your interest rate. Good luck!

Answer 5

I think you are wise to pay down your debt or eliminate it entirely and unfortunately it sounded like you may have been scammed. Contact the companies with whom you are indebted. Sometimes they'll work with you, accepting lower payments per month. If they will, make sure you keep your word.
I don't know if you're able to, but can you get a part time job? It may be only temporary but it's one way to do it.
Good luck and watch what you spend. There's an OLD saying: If you can't afford to pay cash for it, don't buy it..

Answer 6

Call them up and ask. Once you make the effort, they are usually remarkably easier to deal with. Also, I recommend getting a low rate balance transfer if you qualify. I know you can trasfer to almost any citibank card (www.citicard.com) for 0% for 1 year with no fee. But that's IF you qualify. Anyway, call the CC companies yourself and try to negotiate with them for lower interest rates (that's where they kill you!). You can do that all yourself and you dont have to pay a debt consolidation company to do it for you.

Answer 7

All I can tell you is pay it back and after that you will be 10 times stronger..... I only got in debt once, when it was paid, after all the difficulties; I've *never* gone there again.

Answer 8

Call the nonprofit organisation to help they will reduce you monthly payments and help you saty off debt once you paid them off.
RIPP UP YOU CREDIT CARDS