cancel
Showing results for 
Search instead for 
Did you mean: 

Debt Consolidation (Not loan)

Frequent Contributor

Debt Consolidation (Not loan)

Hey all,

I have recently had to really run up my credit cards in the last 14 months due ot an ill fated business venture. (Learned that lesson)  Long story short, I rang up about 100K in credit card debts. (payroll ,expenses)

 

Now I'm in a position where I'm waiting for the product to finally make some money - but under a mountain of high apr bills.

 

I got an offer from a company called Tweed Financial which dovetailed to a company called Finance Solutions.  They offered to consolidate all my debt to a singular payment, at 0% apr, and slowly pay off all the creditors over the next 42 months.  The caveats are that the accounts get closed - and the balances report (as they are paid down).  

I worry about how bad this hurts my credit (i still have close to a 700 even with 65% util)  And more importantly, how badly does it hurt my relationship with creditors?

I have some really great triple A cards and it hurts to close them, and hurts more to think i couldn't get an account with them again.  The company assures me I'd be in good standing with the creditor, but when i asked about keeping my Amex Plat and closing my BCE - he said they may actually close out the plat too, just because, which would be a huge shame.

Any advice would be most appreciated!



CK EQ: 730 / CK TU: 735 / EXP FICO: 721 / EX Vantage: 793 / Total Exposure: 112K
Message 1 of 7
6 REPLIES
Regular Contributor

Re: Debt Consolidation (Not loan)

I'm not sure what the answer is here, but if it was me. Depending on the product, I think I would look for an investor to get you back solvent. There is a lot of venture money around if you have the right product and right message even if you are pre-revenue which it sounds like you are.

Started Rebuild 4/2018: EX 616| EQ 621| TU 604

Current 6/21/18:


Goal Score: 750+
Message 2 of 7
Frequent Contributor

Re: Debt Consolidation (Not loan)

If you mean - what I spent the money on - its a video game.  We have it on steam (where it sells) but we ran out of money in march (and i mean credit!).

 

I don't know an investor alive that would give me 200K and let me use like 120 of it to pay off my own debt, so that seems like a bad choice.  The game could hit in a month and do great, or it could be slow and take a year to take off, or it could never sell. In hindsight it was an awful decision but "we should try it at least once" and "it's a bucket list item" were where my head was at Smiley Sad



CK EQ: 730 / CK TU: 735 / EXP FICO: 721 / EX Vantage: 793 / Total Exposure: 112K
Message 3 of 7
Regular Contributor

Re: Debt Consolidation (Not loan)

If you are selling equity in the company, then you may as long as they believed in the promise of the game. It may have to be a lot of equity, but software is an area where some angel may come along if you pitched it right and could show some promise in downloads and installs, the userbase is where the money is for investors in SW. 

 

If you are out of money unless its something that goes viral it's going to be tough to get traction without some advertising dollars.

 

Like I said I'm not sure of the answer here, but you do have this interest piling up every month and that's assuming there is enough revenue to make the minimums if not then it's a negative sum game where you will lose the cards anyway due to charge-offs. This company may be a method for you to stay afloat until hopefully, it starts to sell. But you are still going to be in debt regardless.

 

Not telling you anything you don't already know and I wish I had an answer, but I don't. I remember an old saying from my grandfather, you can't borrow your way out of debt. I wish you the best with coming up with something that works out in the end.

 

Started Rebuild 4/2018: EX 616| EQ 621| TU 604

Current 6/21/18:


Goal Score: 750+
Message 4 of 7
Super Contributor

Re: Debt Consolidation (Not loan)


@mccallb wrote:

Hey all,

I have recently had to really run up my credit cards in the last 14 months due ot an ill fated business venture. (Learned that lesson)  Long story short, I rang up about 100K in credit card debts. (payroll ,expenses)

 

Now I'm in a position where I'm waiting for the product to finally make some money - but under a mountain of high apr bills.

 

I got an offer from a company called Tweed Financial which dovetailed to a company called Finance Solutions.  They offered to consolidate all my debt to a singular payment, at 0% apr, and slowly pay off all the creditors over the next 42 months.  The caveats are that the accounts get closed - and the balances report (as they are paid down).  

I worry about how bad this hurts my credit (i still have close to a 700 even with 65% util)  And more importantly, how badly does it hurt my relationship with creditors?

I have some really great triple A cards and it hurts to close them, and hurts more to think i couldn't get an account with them again.  The company assures me I'd be in good standing with the creditor, but when i asked about keeping my Amex Plat and closing my BCE - he said they may actually close out the plat too, just because, which would be a huge shame.

Any advice would be most appreciated!


My advice would be to just pay things down out of the cash flow. And stop borrowing for a good long while.


FICO8 EQ 769 TU 791 EX 764 Total revolving limits 569900 (484900 reporting)
Message 5 of 7
Highlighted
Frequent Contributor

Re: Debt Consolidation (Not loan)

I'm at a net loss on a monthly basis with the bills due to the interest rates (around 18).

The consolidation place will be able to save me over $2000 a month which makes it a hell of a lot easier to pay down the debt, and use extra income to assist.

So while borrowing to get out of debt is of course a terrible solution, I have high income and earning potential, i just need breathing room.



CK EQ: 730 / CK TU: 735 / EXP FICO: 721 / EX Vantage: 793 / Total Exposure: 112K
Message 6 of 7
Super Contributor

Re: Debt Consolidation (Not loan)


@mccallb wrote:

I'm at a net loss on a monthly basis with the bills due to the interest rates (around 18).

The consolidation place will be able to save me over $2000 a month which makes it a hell of a lot easier to pay down the debt, and use extra income to assist.

So while borrowing to get out of debt is of course a terrible solution, I have high income and earning potential, i just need breathing room.


I'm not sure what the business model is of this company that is willing to pay off your debt for free, but I don't trust it.


FICO8 EQ 769 TU 791 EX 764 Total revolving limits 569900 (484900 reporting)
Message 7 of 7