Credit Card Debt question?

Question

4-5 months behind in cc payments (total due 7,000)which is better, using non-profit debt agency or trying to deal w/cc companies even though I can't make all the min payments.I'm hearing pros/cons from each of them about the other and am totally confused as to what to do. What about refinance on house?

Answer 1

Get rid of all the credit cards.
And stop spending money on stuff you can't afford.

And buy cheap food and things...
and pay pay pay pay pay pay cc payments as possible.

And don't buy anymore Birthday presents, Christmas presents,
and stuff... people do understand that you're broke.

Answer 2

The minimum payment is 2% of the bill which is $140. To save this, brown bag your lunch ($3 a day) which is $60. You can get a second job on the weekends to increase your income. Stop using the cc because you will be charged interest on every purchase you make from day 1. If you refinance, you'll pay a higher interest rate on the house (mortgage companies look at your credit score and cc payments) and you'll have a higher monthly payment that will not offset the cc bill.

Answer 3

Don't put your house on the line for credit card debt! Bad idea. Cut up all the cards now. Start a written budget so you can see exactly where your money is going. Then you can see where you can cut unnecessary expenses. Pay the smallest credit card bill first. Then work on the next smallest and so on til they're all paid off. The reason you start with the smallest first is so that you feel you are getting somewhere. Call the credit card company with the smallest bill and ask them to make you a settlement offer. Do this after you have at least half to 3/4ths of the amount owed saved. They will usually offer 15% off the total. Then when that is paid off do the same with the others. Best of luck to you!

Answer 4

You have some options, not good ones but some.
I am going to assume there are several CC companies involved.
Negotiations with several will not produce very good results.
A non-profit usually works with $ 10K or more..
You credit is pretty much in the toilet if you are 4 or 5 months behind.
Contact the companies and ask for 50% forgiveness. Or you will have to file bankrupcy.
If they agree and present you with a new contract stating the terms, take it to you mortgage holder and borrow against you home.
Most important cut all credit cards in 1/2.
Good luck my friend.

Answer 5

For starters, I would not do anything that would jeapordize your house. There is no need to go further into negative equity on your house just to pay off the scumbucket credit card collectors. (I call them that because of their tactics to try to collect). You certainly owe the money, but there isn't anything that the nonprofit debt agency can do that you can't do for yourself. Write a letter to each credit card company, tell them why you got behind, and how much you can pay each month. Ask them to lower the interest rate temporarily and start a debt snowball to get rid of your debt. DO NOT touch the equity in your home.

I would strongly urge you to get involved in Financial Peace University. Dave Ramsey has some great ideas on how to get out of where you are now. And it works. I've been where you are now...and I'm not there anymore. Check it out, you have nothing to lose by checking it out. The link is provided below.

Answer 6

Many people have the impression that all credit card companies are scumbags and are trying to get the money out of you any way they can, what people fail to realise is that when a cc company is expecting payment from you and they don't get it, they're going to attempt to get it back. Wouldn't you do the same thing if your job stopped paying you all of a sudden or started shortchanging your checks without any warning? Lots of people that fall into debt want to try to avoid the calls until they feel like they have money but lots of the time, by then it's too late and you're receiving calls from lawyers who are trying to sell your house to pay back these debts. To avoid all of that, credit card companies are willing to work something out as long as they know that they're getting some kind of money from you. First of all you need to contact all your companies find out what your balance is, the bill date, and how many months past due you are. The cutoff dates for your account before it is sent to lawyers is 6 months, so whatever account is closest to that you need to call and explain the situation, if they are doing their jobs they should be willing to offer you a payment plan. If you have a lot of debt you need to try to lowball the offer and get the monthly payments as low as possible so that you can get the 0% on all your cards. Once you do this on all your accounts, you have to remember that these programs are usually designed to last about 12 months to give u time to get back on your feet. So you can take some advice from some of these other people and double up on some of your payments so that one gets paid off and then you can apply the money you were spending on that account to another account also and get paid off and if you keep going like that just focusing on making extra payments on one accout at a time you should be able to apply extra payments to an account as another one gets paid off. It's very important that you make these extra payments because if you don't, at 0% and in 12 months you end up in almost the exact same situation because the payments you have been making are so small that they didn't significantly lower your debt. If you can follow this program you should be able to handle your debt without refinacing your house because it's never safe to involve your house in your debt. As far as non profit companies go, they pretty much offer the exact same payment programs that you could get from your company if you called them, the only advantage that you could possibly get from them is maybe consolidating your debt into one payment and then paying extra payments to your accounts individually as I outlined earlier but I'm not positive if that would work, you would need to speak to both the non profit company and each credit company to make sure that they would allow extra payments.

Answer 7

I would try to deal with the CC minimums.

Non-profit debt agencies REQUIRE you to pay their monthly balance even more so than the credit card payments. Plus, consolidating your debt will knock your credit score way down.

Answer 8

It would be better to work with the cc companies on your own. Working with debt agencies really hurts your credit score.

I refied my house to get rid of debt and it was truly the best thing I have ever done. This might be the best way to go

Answer 9

Ouch! Depends on how your credit is.because you might be able to get a personal loan. Explain what is happening and you would want to get out of dept. " IF" they should give it to you give them your credit cards right there on the spot when signing the paper work. I would try not to refinance the house not for $7,000.00 ask your creditors the amount you owe on the payoff for the end of the next month. It might help. Oh and by the way don't get anymore credit cards because you'll be back to square 1.

Answer 10

A lot of people are in debt and in trouble through no fault of their own. They've lost their jobs or their businesses have failed and to survive they resort to credit cards expecting them to provide short term relief until they get a job. For others, major unexpected medical or other emergency expenses can knock the stuffing out them financially speaking. If they don't have the cash, most people fall back on credit cards. If you haven't figured it out already, credit cards are the biggest causes of debt related stress. Combined with other loans, credit cards with their often high interest rates and sometimes draconian late payment penalties can cripple you with high monthly repayments.