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New Member
andymawson
Posts: 2
Registered: ‎01-01-2011
0

Best way to reduce debt?

I just got divorced. Marital home was just sold. I got nothing from the proceeds in the agreement. No delinquencies, no dings on my credit but rather high debt to earnings ratio -- carrying around 30K in revolving debt. I assume once my discharged mortgage hits my credit report my score should significantly improve as that and a home equity loan which was also paid off with the proceeds from the sale will be cleared. So what's my best strategy moving forward to clear my remaining debt? I'm hoping my score will mprove enough to get a good 0% transfer to another card for 12-18 months, a time frrame I believe I can discharge my remaining debt in? If I don't qualify should I take a loan against my 401K or try and get a lower % rate personal loan (I am renting so am no longer a home owner)?

Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Best way to reduce debt?

 


andymawson wrote:

I just got divorced. Marital home was just sold. I got nothing from the proceeds in the agreement. No delinquencies, no dings on my credit but rather high debt to earnings ratio -- carrying around 30K in revolving debt. I assume once my discharged mortgage hits my credit report my score should significantly improve as that and a home equity loan which was also paid off with the proceeds from the sale will be cleared. So what's my best strategy moving forward to clear my remaining debt? I'm hoping my score will mprove enough to get a good 0% transfer to another card for 12-18 months, a time frrame I believe I can discharge my remaining debt in? If I don't qualify should I take a loan against my 401K or try and get a lower % rate personal loan (I am renting so am no longer a home owner)?


 

The first thing to do is make sure you do not have any accounts with your ex. If you do make sure you close them immediately.

 

For suggestions on what may be best to clean up your debt you would need to offer more information.

 

What type of accounts? (car loan, student loan, credit cards, personal loan, etc etc)

 

What are the interest rates?

 

What are the balances?

 

What are the credit limits on credit cards?

 

Do you have any negative reporting? (lates, charge-offs, collections, judgements, liens, etc etc)

 

Good Luck
May all your dreams and wishes become a reality!
New Member
andymawson
Posts: 2
Registered: ‎01-01-2011
0

Re: Best way to reduce debt?

thanks for the quick reply! I've already taken care of getting my ex's name off of my accounts. I have two active credit cards -- one with a 20K balance (22K limit) at 15.24% APR and one with $8,640 owing at 9.24% APR with a $9,300 limit  (both with Chase). No negative reporting at all on my credit report.

Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Best way to reduce debt?

 


andymawson wrote:

thanks for the quick reply! I've already taken care of getting my ex's name off of my accounts. I have two active credit cards -- one with a 20K balance (22K limit) at 15.24% APR and one with $8,640 owing at 9.24% APR with a $9,300 limit  (both with Chase). No negative reporting at all on my credit report.


 

If these are the only 2 debts presently which are fairly high how you would go about paying them off depends on other factors such as how much you can afford to pay towards them,.

 

Since the interest rate is much less on the lower balance I would pay the minimum due and all the extra money going towards the higher balance with the higher interest rate.

 

Cut back on all the things you really do not need by lowering bills and expenses (cable, cell phone, house phone, going out, electricity, heat, etc etc)

 

Depending on your income and how much you can cut back and lower other expenses will determine how fast you become debt free.

 

You can do it many of us have.

 

 

Good Luck
May all your dreams and wishes become a reality!
Super Contributor
marty56
Posts: 5,696
Registered: ‎10-06-2007
0

Re: Best way to reduce debt?

[ Edited ]

I would check out a DMP program to see if they can reduce your interest rates.  You can take up to 5 years to pay off and it is FICO score friendly.  The only down size is that you must be able to afford the monthly payments.  A FICO score friendly way to get out of debt is to start with the account with the smallest balance.

11/28/2014 FICO: EQ: 796 EX:788 TU:803
Established Member
0errant
Posts: 30
Registered: ‎03-01-2011
0

Re: Best way to reduce debt?

What's a DMP program?


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Moderator
MarineVietVet
Posts: 14,914
Registered: ‎07-14-2009
0

Re: Best way to reduce debt?


0errant wrote:

What's a DMP program?


It's a Debt Management Program and is completely different that a Debt Settlement Program.

 

Marty56 has used a DMP successfully and here are some older posts talking about DMP's.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Regular Contributor
LYNNY47
Posts: 133
Registered: ‎03-28-2008
0

Re: Best way to reduce debt?

It is true that some people like using the Debt Management Program but I am not one of them.  They all make money off of you.  Yes true they are able to help you to pay less back but I have found that doing it myself has been the best for me.  I just keep going month after month.  Whenever I am able to lower some of my home expenses I take that money for that month and put it towards the card with the highest interest but then I usually pay the minimums and then take whatever I have been able to save during the month and apply it to one card at a time which has the lowest balance and pay that off.  I started with 8 cards and now I am down to one with a large balance so now as of May I will be taking all the money I was putting on the other 7 credit cards and apply it onto this one remaining card.  It has worked for me and I have not had to pay for anyone to do it for me.  Sometimes you need help otherwise you get deeper and deeper in so not a bad idea but if you are able to do it yourself the outcome is always better.  I have been working on my cards for about 13 months now and it does work but you have to stay on top of it.  All I know is in October when I should be done with having any credit card debt I will then take that money and apply it towards my car loan.  I have about three years more of getting out of debt but I think it is worth it in the end.  The last couple of months as I became very serious about it I was able to cut down so many things I did not think I could do but each month I have been able to save at least 30-40.00 on my electric bill, I cut the cable down to basic, I changed my cell phone plane so it would free up some money, use coupons at the grocery store and go where it is the cheapest.  It works but you have to have a good budget in place to get where you want to be.  We are all able to get these things accomplished but it ends up coming down to what we are able to live without.  If you have no credit issues then I definitely would try to get another credit card for 0% for 18 months on balance transfer and that could help you with your largest interest rate.  I think it was CitiBank that offered this butnot sure if they are still offering it.  Good Luck with what you are doing and I know what a struggle it is but just know that one day this will all be behind you.


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New Visitor
DebtFreeLiving
Posts: 1
Registered: ‎03-09-2011
0

Re: Best way to reduce debt?

[ Edited ]

I recently spoke with a guy named Dave [Edited] about the DMP his company offers and after I asked him a ton of questions, I decided to work with him to get myself to debt free living as quickly as possible. He is a very patient and knowledgeable guy, and I learned a lot just from talking with him. I suggest you look him up on Google or go here to see his site: [Edited]

 

Good luck!


Welcome to the forums.

 

Unfortunately I had to edit your post to remove personal information and a link to a site that is prohibited by our Credit Repair Discussion Guidelines.

 

Thanks for your understanding/

 

-Marinevietvet, myFICO moderator

 

 

 

Established Member
raleighmortgagegals
Posts: 20
Registered: ‎01-26-2011
0

Re: Best way to reduce debt?

What is your goal?  To be debt free or to get approved for a mortgage?  The 0% credit card may help you become debt free more quickly.  It won't help your credit score.  Underwriters are concerned when they see recent new credit.


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