How can I resolve my $40,000 credit card debt.?
I have about $40,000 debt from 3 different credit cards and would like to know my options on getting rid of this debt, considering my credit scord is already down the drain. At this moment, I’m not concern about saving my credit score anymore. I can deal with the bad credit for 7yrs. Should I work with a debt consolidation company or stop payments and deal with the creditors directly? Hoping that they will reduce my balance. Any advice would be greatly appreciated.
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STAY AWAY from “debt consolidation” company that promises to cut your debt in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
None of these “debt consolidation” firms have the power to force your creditors to accept settlements. Your creditors have the right to refuse these terms and take you to court.
Stopping payments and trying to settle involves the same risks…You can always make your own settlement offers.
Another option is entering a Debt Management Plan (DMP) with a non-profit credit counselor like CCCS (Consumer Credit Counseling Services). Contact your local Red Cross for a referral. They can negotiate lower payments and interest rates. They do not negotiate settlements.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to “enrolled in debt management.” This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you’re enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt.
Catdad is correct.
Also, any reduction in debt would likely result in some sort of charge off anyway, and will hurt your credit shore for years.
You may want to consult with an attorney who practices or specializes specifically in your situation.
Chapter 7
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html
Disclaimer: I am not an attorney. This is not legal advice.
FYI:
In case another poster is not deleted:
Beware of fraud or phishing posts:
Another poster uses a UK Yahoo account making people believe it is Barclays PLC (Bank). He requests contact stating Barclays has great rates, then posts a yahoo email address.
Barclays PLC may be a decent bank, but it does not use “@yahoo.co.uk” as their domain email address.
http://group.barclays.com/About-us
i work for a legit debt settlement company and id like to help you out and give you info about the company. shoot me an email at kailynncarrano@yahoo.com
thanks
nowadays countless Americans are in debt and have bad credit. what i suggest doing is to take action right away. the first step is to check your credit report&score at http://creditpalace.notlong.com best of luck.
A professional debt consolidation program could be right for you – in some cases, you’re able to get completely debt free in 4 to 7 years. I would consider working with a third-party credit card company directly to consolidate the debt onto one credit card that is lower interest. In some cases, they’ll even pay you for transferring your balance (between 2% and 5%.)
my best suggestion to you is to go to your nearest library or bookstore and get the book the total money makeover by dave ramsey he will teach you how to payoff your debt in a way that you can attack it in two to three years and start creating wealth. he touches on debt consolidation in the book, the book is completely about getting out of debt.
good luck.