Does anyone know the best method for illiminationg all my debt that has acrued. Should I work it out with the creditors individually or should I choose to go through a consolidation company?
2007-02-06 17:21:47 · 5 answers · asked by shelly s 1 in Business & Finance ➔ Credit
A consolidation company may not approve your consolidation loan based on your bad credit history. You should explore all of your options and see what's the cheapest way to get out of debt. Shop around. There is no harm in getting a quote from the creditors and also the consolidation company.
2007-02-06 17:31:09 · answer #1 · answered by Sax M 6 · 0⤊ 0⤋
If your credit rating is ok then applying for a consolidation loan would be a good move, just make sure the loan interest rate is lower than the credit card's. Because credit cards are a risky debt, banks will be demanding when it comes to repayment arrangements. When dealing with collectors on credit card accounts play hard ball, don't commit more that your comfortable paying and be willing to stand your ground until they give in and accept your situation and agree to repayments on YOUR terms.
An alternative to a consolidation loan would be moving the credit card balance to a new credit card provider who will give you a low interest term on the transfered balance. (generally 0 - 3%)
If you have a mortgage I wouldn't advise re-drawing to pay off the debt for 2 reasons:
1 - The mortgage is secured with your home, and while the credit card remains unsecured you will have more flexibility with the bank and if you become unemployed again in the future unsecured debt wont get you in as much trouble.
2 - You will pay more in interest over the term of the mortgage, despite a lower annual interest rate. 7% a year for 25 years is more than 18% a year for 5 years.
I'd suggest talking to your banking, if they're helpful then setup a payment plan that suits you, if they are not then take your business elsewhere.
2007-02-07 03:03:09 · answer #2 · answered by bennyp 1 · 0⤊ 0⤋
You seem to think that the credit card companies will "wait" for you to get your life together.
The most appropriate thing to have done was to COMMUNICATE WITH THEM when you weren't able to make the payments as you recently lost your job. You could tell them that you are looking for EMPLOYMENT . That way, they could've easily set you up for a "workout" plan as you go through your "season" of tragedy.
Who knows? Your cards may have been charged off by now, which will leave you with a moth-eaten FICO score?
This is an unnecessary form of self-sabotage. You can try to "make good" now with the creditors, but you have compromised your integrity by being incognito and tight-lipped for far too long.
You can try to win their affections, but you are fighting an uphill battle, so prepare yourself accordingly.
2007-02-07 08:01:12 · answer #3 · answered by DaMan 5 · 0⤊ 0⤋
If you are a homeowner, fill out the free evaluation form at
www.totaldebtsolutionsllc.com
They are a settlement company, not a consolidation company that most likely would rip you off.
2007-02-07 13:25:21 · answer #4 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
U should do it individually because they will screw u over.
2007-02-07 01:29:22 · answer #5 · answered by LaLa 4 · 0⤊ 0⤋