In debt, Are Credit Consolidators a good idea?

Question

My husband and I both graduated college, and are currently over $10,000 in debt. I am so depressed because I dont know how two people with full time jobs are so poor. It just seems like we can never get ahead. I keep calling VISA (which I maxed out yesterday) to try to get them to lower my interest rate, so I can get a bit of a break and pay a little more off (like Oprah said they will do if you call) but all I get is middle easterners who say no.

What exactly do the Credit Consolidators do? Is it worth what they charge? What do they require. I am starting to make sacrifices because I am SERIOUS about paying this debt off. Its just so depressing I feel like its never going to happen. I want to pay it off, and get rid of Credit cards for good, and save for my future children and what not.
Any ideas on what to do?

Considerate answers only please*

Answer 1

don't stress over $10K in debt. Instead use the tools you learned in college.

FIrst things first. Is the $10K all of your debt? you mentioned maxing out your VISA, is that additional debt? Do you have other bills? rent and that stuff?

sit down and list all of the "things" you make payments on. Seperate them into two lists. Recurring debt, ie rent, food, utilities. the stuff that you'll never be done with. then list all of your revolving debt. Now list all of your income.

look at your Credit Cards and see which one has the lowest interest rate. If none of them are less than 11% do a CC search and find one with a fixed rate below 10%. Transfer all of your CC debt to that card. Take all BUT ONE of your credit cards and shred them. Don't cancel them unless they have an annual fee, it looks bad on your credit rating. Take ALL OF THE MONEY YOU PAID ON THE OTHER credit cards and pay it on THIS ONE credit card that now carries all of your debt. DON'T CHARGE ANOTHER THING until the entire amount is paid off.

Shred your debit card. Everything from now until you're debt free is cash. If you don't have the money in your pocket DON"T BUY IT no matter HOW good it will make you feel.

There are other similiar strategies, but credit consolidators will want money from you. YOU KNOW HOW TO DO THIS. You're a college graduate damnit!!!!!!!!

Do a little research (like you've done for the last 4 years). But the key is to get rid of the things that got you into trouble (credit cards), do without for the next year or 2, and if you don't have the $$$$$ in your hand DONT BUY IT.

I own my house, a 4plex building, a commercial lot, both of my cars, and I pay my bills off every month. I charge an average of $4000 a month on my MC, and pay it off before the 10th of the month. I did it, and so can you, you just have to tighten your belt and do without you double mocha caffe machiado, or whatever it's called!!!

Answer 2

You say you are serious about getting out of debt. But you also say that you maxed out your VISA yesterday. Think about that a little - does that tell you anything?

The way to get out of this isn't by borrowing more money. You need to take a real serious look at your spending, and quit buying things you don't need for awhile until you get the debt under control. Meals out or delivered? Cook at home instead - there are some very tasty, easy items you can get at the grocery store that don't take long, or take cooking ability, to prepare. Don't buy anything you don't absolutely need for awhile. For a week, write down every cent you spend - you might be very surprised when you review the list.

Good luck. For two employed people without children, you should be able to work your way out of the $10K debt fairly quickly, like in a year or so, maybe even less.

Answer 3

1. Credit consolidators get you another loan that rolls all your credit card debt into one loan with a lower (but longer) payment.

2. If you want to get out of debt, find a second job for each of you and put all the income from those jobs toward the debt.

3. Use your debit card instead of a credit card to buy things. Track the expenditures in your checkbook just like a check. That is, after all, what you are doing. Taking money directly from your checkign account.

Answer 4

If a person has accumulated a large amount of credit card debt due to multiple credit cards, the need for a proper counseling for credit card debt consolidation can't be understated. Credit card debt consolidation counseling helps a person get vital insights into the facts that can help him get control over the credit card debt.

Credit card debt consolidation counselors are experts with a good knowledge of debt management, budgeting and behavioral patterns of credit card holders. These services are vital for those struggling to manage their credit card debts. Also called credit counseling or debt counseling the credit card debt consolidation counseling brings immediate relief to a credit card holder.

A person seeking credit counseling can get it from two types of organizations. The professional or commercial organizations, and the non-profit organizations. As depicted by its name or categorization, the commercial organizations charge money for their credit counseling sessions and consolidation help on the other hand the non-profit organizations offer free of charge services. Just because the non-profit organizations are free, it doesn't undermine their quality of service. The persons associated with such organizations are thorough experts and have lived the trauma of being under credit card debt themselves and hence bring their vital experience to the credit card holder.

When a person approaches a credit counseling agency, the first thing it will do is to take stock of the situation and get various facts about the credit card debt. The credit counseling agency collects data about the income, expenditure and spending habits. It will guide the credit card holder about budgeting benefits and try to inculcate good financial habits. Read more from: http://www.credit-card-gallery.com/article/353,Credit_card_debt_consolidation_and_credit_counseling_great_tools_to_get_rid_of_credit_card_debt

Answer 5

Stay away from any company that you have to pay. What they will do is not pay your creditors for months and then try and settle for less.No special skills. They just dont pay. Something you can do yourself and save the fees they charge.

You need to start with a written budget. Live on less than you make.

check out daveramsey.com and listen to his radio show. Lots of good advice on money and getting out of debt.

Also, if you go with some company to pay your debt and they dont pay. You, and you alone are still responsible for the debt. Your creditors will sue you and not the company you hired.

I wouldnt do a home equity loan either. You put all that money on your house and something happens where you cant make the payments then you can lose your home.

Answer 6

Yes it is. You must be careful which debt consolidation program you use. Some will harm credit and others won't. I would also choose one that has a flat fee up front vs. a monthly charge.

Answer 7

You can handle the 'consolidation' all by yourself. And it will cost you nothing: take a look at this series of articles: http://www.usaindebt.com/2007/10/02/getting-out-of-the-debt-hole-part-one/