Hello March--
I have a great deal of experience assisting people with this kind of
situation and have some options for you that can work for you.
First, I recommend that you become incredibly serious about reducing
your debt. If you don't make it a priority, it can get out of hand
quickly. This is especially important if you have significant debt, as
it appears you do.
The good news, as you mentioned, is that you have favorable credit. It
is important that we keep your credit rating as high as possible, so
you apply for credit down the road.
Next, stop making purchases on credit cards. As long as you're serious
about getting out of debt, tear up those credit cards and start
spending only with cash you have in hand. You may always return to
credit card use in a year or so when you have paid off your debt and
when your financial situation is more stable.
Whatever you do, do not pay money to someone who says they'll help fix
your credit. Advance-fee loans are illegal in your state. There are
many companies - and even "non-profit organizations" that say they can
fix your credit and will do so by consolidating your payments. These
companies take your first payment to them as their fee. So many
consumers complain about this process, as these companies are a dime a
dozen. The main complaint I hear is that these companies take your
money but they don't pay off your debt at all. They only find out this
fact when three or four months after they sign up with them, their
creditors are calling wanting their money. Then, typically, it's only
a matter of time before these companies go out of business.
There is one reputable non-profit group that I can recommend in your
area. The Consumer Credit Counseling Service of Northeast Ohio in
Cleveland and Beachwood.
Consumer Credit Counseling Service
7519 Mentor Ave
Cleveland, OH 44102 Phone: (216) 781-8624
Consumer Credit Counseling Services
21403 Chagrin Blvd
Beachwood, OH 44122-5322 Phone: (216) 295-9152
You may visit their website online. The link is http://www.cccservices.com
This is the one debt consolidation organization I can trust and have
recommended to many people. That's because this organization isn't one
of those groups that popped up within the past 10 years as part of the
latest debt-consolidation craze. This organization has been around for
about 50 years. I have never heard a complaint about them.
How it works is this: You go in, they analyze your debt. Because you
have student loans and credit card debt, I think they can drastically
help you. What they'll do is help you look realistically at your debt.
You'll create a plan to get out of debt with them, and they don't
charge you. They'll make agreements with each of your creditors to
lower the interest rates that you pay (some as low as 0%), as long as
you agree to pay off the debt. Everybody wins: your creditors get
their money (which not everybody pays off their debts- instead they
head toward bankruptcy), and you get lower interest rates to pay your
debt.
You will then make payments to the Consumer Credit Counseling Service
every week or every-other-week instead of paying your creditors
individually. They will then in turn pay your creditors. But the catch
is that you need to stay on track with your payments: Don't be late!
Or the whole deal can be ruined! Again, you have to be serious about
getting out of debt for this to work.
Two other realistic options for you without signing with the CCCS:
1) Seek a debt consolidation loan. This is a quick and easy way to put
all your debts: car, student loan, credit card, etc., into one place,
one bill, that you pay on each month. Yes, this will be a sizable
loan. But you likely can get a good interest rate. If you have good
enough credit, you may be able to obtain a line-of-credit account like
this without equity (i.e. a piece of property, which you indicated you
don't have anyway). You should contact some of the banks in your area
to discuss this possibility.
If you don't qualify for a line of credit without equity, you may wish
to ask your parents, grandparents, any siblings, or friends to co-sign
such a loan for you against property they own. Since you have good
credit, this likely wouldn't be a problem. Again, obtaining a debt
consolidation loan can give you a great interest rate (much lower than
your credit cards) and help you make a single, lower monthly payment
to pay off your debt.
2) Make cuts in your life. If paying off your debt is truly a priority
of yours, you will find a way to make it happen. Find a less expensive
place to live, sell your car and buy a less expensive car, lower your
entertainment and other areas in your budget.
3) Contact each of your creditors individually. Have a heart-to-heart
with them. Tell the you seriously want to pay off what you owe them
and ask if they could settle a lower amount than you owe and set up a
payment plan to have those amounts divvied up to be taken directly out
of your checking account each month. For example. Let's say you have a
credit card on which you owe $2,000. If you call that credit card
company and tell them you want to talk about reaching a settlement
agreement with them, they'll likely close your account, and may agree
to let you pay an amount as low as 60 or 70 % of what you owe. So on
that $2,000 credit card balance, you may be able to talk them into a
settlement of only $1,200. Then from this amount, you may be able to
break this up into 10 monthly payments of $120 each. So each month for
the next 10 months, they'd deduct $120 from your checking account
until the settlement amount is paid off. Just be sure none of the
payments bounce! If you don't have enough money in your account to
make these payments, your settlement may be voided completely. Also,
understand that when you make a settlement, the fact that you made a
settlement with the company will appear on your credit report for at
least 12 months.
I also conducted some research to find more information for you. You
may view the results of my search online. The link is
://www.google.com/search?hl=en&ie=UTF-8&oe=UTF-8&q=%22how+to%22+%22eliminate+debt%22&spell=1
http://www.stresstips.com/credit_card_debt/how_to_eliminate_credit_card_debt.htm
http://www.simplejoe.com/debteraser/index2.htm
http://www.planetloan.com/library/bankruptcy_avoiding.html
If you need any clarification, please don't hesitate to click the "clarify" button.
Thanks,
darrel-ga |
