Financial Advice

L.,
This economy is tough for everyone. Whatever you do, do not go with a debt consolidation company who promises to save you money and work w/ your credit card companies. This is worse on your credit rating than a bankruptcy. You should contact your credit card companies and advise them of your situation, they can do things like lower your interest rate or change your due date to help accommodate you, you won't know until you ask. I work in the Bankruptcy legal field and you are not alone by any means. You really need to try to destress, maybe you can have your husband sit down with you and ask him to help you handle some of the bill paying, even if just means him taking the check book for a while, you need to take care of yourself for your kids and your family. Hang in there.

I have not ever been in that situation, but from watching a number of different things on tv, magazines etc. You should definitely look at your debt and lay it out if the charges are on more than one card. the tv experts suggest paying the higher interest rate card first and get it paid off. then down the line. They have also shown people calling the card, and requesting a lower interest rate. also, the possiblity of transferring all of the debt to a new card with a zero interest for a certain amount of time. If possible, try not to use the cards to charge food. from what i have read, they suggest that you do not use your credit card for something that will be gone before you get the bill for it!

Hello, I hear you there. Though I must say, your debt is not bad and very manageable. I would not close out accounts or take out any more loans. If you do get an offer from one of the credit cards you already have with something like 1-4.9% in consolidating your credit cards for the life of the balance, I would do that. There is a 3%transaction fee usually for this consolidation, but you can lump them all together under one card for usually a low monthly payment than having them all spread around. Would you ever considering doing any sales on the side to create extra income? It seems that marketing might help you in this area. I also have a friend who is a financial broker and she has helped me save money while paying off my debt too. You should always pay yourself first. Our stories are opposite, I am basically out of work and my husband is the sole supporter. Our debt is out of control right now, but we are still managing to save into our retirement too. Let me know if you need more help with this.

I filed bankruptcy but your $10,000 in debt is more manageable. You should put together a budget listing all of your monthly payments so you know where your money is going first. This will tell you what you could pay and they probably will ask for it. I would contact the credit card company that you have your debts with and suggest they readjust your payments. Many credit card companies would rather have you pay them something than get nothing. If you have a mortgage, I would contact them also to adjust your payments. You will have to pay them back eventually but it is better than getting all those nasty phone calls and having your credit go bad. Usually they won't hike up the percentage either. If your credit is good, you might try getting a credit card with a lower interest and transfer your debt to it. Either way, ask them what they can do to help you with your payments. It helps that you have at least once source of income. They may ask you what your income is to tailor a payment you can meet. Debt consolidation companies do just about that anyway but they also get some of your money.

Good luck. L.

We started with a debt consolidation company almost 2 years ago. The one we went with came highly recommended by a mortgage broker. we started with almost $9900 in debt and only have $5000 to go. It is tough at first, we pay $307 a month to them and they take care of paying them. Yes, we had to close all of the accounts that we gave them (which got closed anyway due to no payments)and we cannot open any new credit cards until we are done with the program, you can however apply for a car loan or a home and any kind of emergency situation (dental/medical). My score has gone up almost 75 points in 2 years and we most likely will get approved for a home this year due to this.

This isn't one of those companies that promises to cut your bill down by 60-80%, this one just works with your creditors and lowers your interests. Now our broker said that yes, some people will look at it on our credit as a bankrupsy, but not as bad because it shows payments being made every month and that you are not paying your debts. We just have to show the paperwork that we are in a program and where we stand. Good luck to you. I was in the same position almost 3 years ago. I developed high blood pressure, depression, thoughts of suicide just due to the amount of phone calls and harassing letters. I was afraid to answer the phone, or get the mail. If you would like the name and number of the place we used please let me know.

You're right about closing your accounts that will effect your credit score which is now what is driving the credit market regardless if you want to buy a house or something as simple as applying for a credit card. What I highly recommend that you do is call your creditors and speak with a manager let them know that you are in a boarder line bankruptcy situation (and you want to avoid) and your husband just had gotten laid off and ask them to temporarily reduce your interest rate for 12 months. If you have any auto loans you might be able to refinance them into a longer term to reduce your payment. As far as your mortgage goes you will not be able to refinance with your husband being unemployed unless you qualify on your income alone and the lender will not cooperate with you regarding renogotiating the terms of your mortgage loan unless your behind in your payments which of course you want to avoid however you could always try miracles do happen but don't hold your breath. I hope this little bit of advise helps and please remember this too shall pass. Best of Luck!!