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Currently, my FICO score is 630. I wonder how using someone like debt free associates
to reduce my debt works. I could pull monies from 401k also. Any ideas?
From everything I've read, you can usually take care of all accounts yourself. Of course, every situation is different.
How many accts does this debt cover?
Are they current?
Are they all in your name / your responsibility?
@Anonymous wrote:Currently, my FICO score is 630. I wonder how using someone like debt free associates
to reduce my debt works. I could pull monies from 401k also. Any ideas?
Ouch!
@Anonymous wrote:Currently, my FICO score is 630. I wonder how using someone like debt free associates
to reduce my debt works. I could pull monies from 401k also. Any ideas?
Welcome to the forums, mjbtx! (and ouch!)
I don't know how much you earn, but you have to explore BK. Removing money from a 401k to pay these debts is not a good idea - 401k money is protected in a BK.
@BungalowMo wrote:From everything I've read, you can usually take care of all accounts yourself. Of course, every situation is different.
How many accts does this debt cover?
Are they current?
Are they all in your name / your responsibility?
+1.
Sometimes the stress is worth paying someone to help you get things under control, but there's a lot of companies out there that are not working in your best interest. I'm not familiar with the people you mention, Try a non-profit debt counseling service, or D.R. program. I disagree with those that recommend BK rather than pulling 401K. I would pull funds from the 401K, keep (or build) your good credit, and rebuild the 401K. I know how to run the numbers, but that's only part of the process. If you have access to money to pay debts - get them paid and rebuild. DIvorce is enough stress without adding the significant stress of a BK. Never file BK if you can pay your debts. Never never never. MHO.
@creditwherecreditisdue wrote:
OP needs professional legal assistance including the exploration of BK before pulling money from a 401k to pay this debt. Period!
I completely agree.
I wholeheartedly agree.
I jump on top of a building shouting out with a bull horn agree.
In this case and situation we know not even remotely enough about the OP and his circumstance to give any cut and dry advice in that or any direction, other then to say:
You need to get a professional financial planner/attorney to help you decide what works for you in your situation.
I am assuming that 59K is your responsibility as set by the court?
Any way, BK maybe a solution, or heck getting a cheap apartment and eating Top Ramen for a year might do it.
BK is allowed by law, there is nothing Illegal about it, but you need someone looking at your financials to tell you your options.
Not nearly enough info OP but while some here might say it is immoral to stick your creditors and file BK only you can make that call. Let's forget the 60K in debts for a moment. Sit down and work up a budget without any debt aside from a car loan you might have. How many years would it take you to save what you currently have in your 401K savings?
Lots of people go BK there is no shame and your credit will eventually recover. A clean credit report and high FICO score will not put money in the bank. It's nice but in your circumstance totally meaningless. The stress of a BK is nothing compared to the divorce. Keep your money.
@Anonymous wrote:Currently, my FICO score is 630. I wonder how using someone like debt free associates
to reduce my debt works. I could pull monies from 401k also. Any ideas?
This thread is the classic example of why so many good threads with legitimate questions get locked!
OP simply asked how using "Debt Free Associates" could reduce his/her debt works, merely mentioning the possibility of pulling monies from his/her 401k. Not once did OP suggest filing for BK, nor did OP state that he/she simply could NOT pay his/her debts. As a matter of fact, OP hasn't even been back to give more details about his/her credit situation. So, before we jump the gun and give OP bad advice, let's wait to get more information.
Again, OP is asking for ideas as to how using a debt management company will help reduce their debt works. Since I have never used a debt management company, I can only give you information that I received from others who have in fact used one of these companies. From what I gather, most of these companies charge a monthly fee. They can do a great job negotiating with your creditors to reduce your monthly payments. However, since this debt management plan will be reported to the CRBs, your creditors (or potential creditors) may take adverse action against you by closing your CC accounts while you're in the plan and/or denying you credit should you seek credit during the plan. Will it have a negative affect on your credit score? Possibly. But, if you are already late in your payments, your score may already be affected. Your score will bounce back in due time as long as you are making timely payments. No one knows except you what your debt situation is and what is best for YOU. I, personally, would consider a debt management program before even entertaining the possibility of BK. Pulling monies from your 401k (as a loan) is a good idea, as long as it works for YOU. Remember, you are paying yourself back with interest. That doesn't go on your CRs and has no bearing on your credit situation. Again, only you know what is best for YOU.
All the best!