Debt consolidation?

Question

Hi,

My partner owes around 20k to misc creditors as unsecured debt with some overdue etc. He has a steady job and has his budget under control now since his family situation changed and could provide a $200 monthly payment. His credit rating needs improvement but turns around 533 which isn't too bad.

Avoiding the bankruptcy path, what other solutions could you guys recommend for him to consolidate and renegotiate his debts into a single monthly payment or something without going into sky-high interest rates institutions?

I may be interested by pro offers too but please I am mainly looking for real people advice.

Thanks you all!!!

Andie

Comment for iceman: OMG thanks for the 'terrible' part, that sure helps dude :P

To the others, thank you so much and I look forward to more suggestions :)

Please Angela D

Could you let me know more about your experience with creditsolutions.com??

You may also contact me directly through my profile.

Thank you so much!

Answer 1

I'm going to let you know something that Consolidation groups probaly don't tell you. I used to be a bill collector and I basically called people all day and bugged them to pay their debt, with that I dealt with people who would tell me they were consolidating their debt, and it was my job to talk to the consolidation group and find out what they were going to send on the debt on behalf of the consumer, a lot of these companies get about $300.00/month from a consumer and the Consolidation group will pocket $150.00 and pay off the creditors with about $30.00/month to each creditor the consumers owes a debt to, at that rate you'll never get out of debt....what a rip off! These consolidation groups just do what consumers can do themselves. That is order your credit report from the 3 major credit report agencies and then call the collection agency that now owns your debt, once you find the collection agency (on each debt) it is now time to negotiate, this is where you want to be very nice to the bill collector that assist you (even if they are very rude, they are trained to be like that to get payment), and I say this because that bill collector will be the one who makes the decision on what type of settlement offer they can give you which can be an amount that is up to 60% off the current balance of the debt. Most collection agencies will accept that in 3 payments within a 3 month period with a payment on the account every 30 days. Keep in mind that settling your account will get you a lower credit score than paying the current balance in full. The other thing to keep in mind is that these collectors work off a goal structure, no matter what they say!!!, so obviously they are not going to let you settle for the lowest amount off the back. (And watch for these collection tactics they use just remeber they have to meet a goal each month and their job depends on it) Another option you can go with is just contact the collection agency and set up a payment plan that is good for you .First thing you want to do is find out how much the interest is on the account and the current balance, figure what you can afford and make payments every month, bi weekly, or weekly. also keep in mind that a bill collector tactic when you are not willing to accept a settlement offer, is for the collector to tell you they require something like 10%-30% as a down payment on a monthly payment plan and then you can pay like $200.00/ month on the account until it is paid in full, this is a lie, check your collection laws(Fair Debt Collection Practices Act) for your state and more than likely you will find that if a consumers owes a debt and wants to make a payment on the account than the creditor by law cannot deny that payment even if it is just $1.00, Hence, do what you can afford and if interest is still occurring make sure that your monthly payment covers the interest occurring on the account every month. I know this is a lot of info, but I know a lot of people wonder the same question and if you don't use this info someone else probaly will, Hope it helps you and your boyfriend. Good Luck!

Answer 2

Bad credit is one of the worst problems to have... however there exists a solution.

I will hereby talk from my personal experience.

I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is a straight to the point ebook with question and answer I found :

http://umgarticles.atspace.com/debt-consolidation.htm

if it helps kindly remember me in your voting!.. cheers!

Answer 3

Based on that debt amount, he would likely be looking at $500 a month to be debt free within 5 years.

A 533 credit score will not earn him loans with reasonable interest rates. He may wish to meet with a credit counselor to find out what options he might have.

Answer 4

the problem with consolidation is that it hinders your credit more than helping....AT FIRST. I'm currently working with a program called credit solutions (www.creditsolutions.com), wherein they settle the credit card accounts. You pay a small fee each month and you basically put money aside until you have enough to pay off each settlement. Go to that website and it will explain it much better. Dont consolidate if you can help it.

Answer 5

500$ month...

A debt consolidation loan or debt loan is a method to repay all debts incurred by overuse of credit cards, overdrafts, personal loans, store cards, or any other unpaid bill and allows you to make a single monthly payment. It is a viable alternative to bankruptcy and is an excellent method of bettering your payment history, leading you to a debt free future. The reason to choose the debt consolidation loan is pay lower rate of interest. Paying only one creditor is much more convenient. You can pay your creditors on time and prevent them from threatening you.

Answer 6

I think the only thing that you partner can do is to call the creditors and make arrangements to pay off the debt. As long as you make an attempt to pay something they will work with you. If you have an additional $200.00 to use to pay these debts, just divide it among each creditor. It will take a long time, but you will soon see the debt go down.
I hope this will help you out. Good luck.

Answer 7

First off all-- -533 is TERRIBLE.

Second, debt consolidation is not the answer. It will lower your credit score for quite some time. Continue to chip away the best you can. As long as you can make your min payments your score will go up over time.

Answer 8

He would be better off getting rid of the cards or at least putting them away, and working diligently on the debt. If the amount due is $20, he should pay $40 per month. He should work on one at a time if he has to, starting with the lowest amount on an account. That way, he would build his credit back up by example.

Answer 9

Payday loans often have an particularly severe activity value, and is only sensible in case you % it desperately for an particularly short volume of time, and are helpful which you will pay the activity value on the mortgage

Answer 10

Consumer Credit Counseling Services are free and will work with your partners creditors to lower both his monthly payments and interest rate. I used them several years ago and was debt free in 36-months.

Answer 11

Although $20,000 is a lot of money, it's not a huge amount and not enough to go bankrupt for. I recommend that you explore all other options and the best way might be to seek help from a credit counseler.

There's some very useful information on this website on this topic and this may help you research all your options.

I hope this helps. Good luck!