topic Re: decreasing debt in Rebuilding Your Credit

decreasing debt

Anonymous — Wed, 15 Jul 2009 19:48:01 GMT

I curently have cc debt of $85,000. About $25k of that (which currently does not show up on my personal credit report) is from credit cards from a business that no longer exists. Most of my income is used for payments which consist mostly of interest(some ccc are charging 20-30%). I am finding it more diffifcult to pay my monthly expenses and have considered bankruptcy. I have had calls from debt settlement companys offering to put money in an attorneys trust fund and they would negotiate a pay off amount of approximately 50%. They have told me that I would have to stop paying for a few months before they start negotiating with the ccc.

My questions are:

1) How badly and for how long will this affect my credit score? I may want to borrow money to start a new business at some time.

2) Are these debt settlement companys legitimate? I know that some of them have had a bad rep. in the past, but they claim it is under the direction of an attorney and that there is federal money available to help the banks settle some of their uncollectible cc debt.

3) Is this something I should attempt to do my self?

Thankyou for any input or advice you may have.

Re: decreasing debt

Anonymous — Thu, 16 Jul 2009 14:04:16 GMT

Hi eyeball! Welcome aboard.

Debt settlement companies are so unethical and detrimental to your financial health, that we don't even discuss them here (TOS). Settling your debt for less than the principal owed will result in your credit being trashed for many years to come, your being hounded by CAs who were sold the difference, and/or tax implications that you will not even want to begin to wrap your head around. Don't do it.

You may want to a consider a reputable DMP (debt management program). There are members here who have successfully completed DMPs, and paid off their debt within 5 years, without ruining their credit. Another option is to talk to an attorney about bankruptcy if you can't afford the payments required for a DMP.

In the mean time, if you've not done so already, cut out all unncessary expenses. When you've done that, look again at what else can be cut. Return items that can be returned. Sell items that you don't need to help pay down your debt. Consider talking to a credit union about a debt consolidation loan.

Most importantly, know that you're not alone, and you're not powerless.

Re: decreasing debt

Anonymous — Thu, 16 Jul 2009 14:45:56 GMT

Please read this recent article in the ny times. Are the ccc policies changing? Why don't you discuss it on this forum? Isn't this a better alternative to bankruptcy??

http://finance.yahoo.com/banking-budgeting/article/107200/credit-bailout-issuers-slashing-card-balances?mod=bb-creditcards