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$32K in DEBT easy way OUT

Valued Member

$32K in DEBT easy way OUT

All,

long story short, i have about $32K in Credit card debt , i have not missed any payments EVER, i have been paying about $950 monthly to all cards just to pay the minimum payment. I have received may letters for debt consolidation companies and i decidaded to call one (InstaFinancial) i dont qualify for a loan because based on my income and amount of debt the monthly payment would be very close from what i am paying already. However he explained this payment plan option where i would call and close all my CC's and put money in an acct $524 every month and in 3 years they would pay all cards, all agreed in a contract.

I want to know if anyone have done something similar and most importantly how much damage will it cause to my credit history for me to close my cards and pay ona payment plan with a third party company.

 

Please give me real life advice not specualtion, i am looking to do it this month still.

 

Thanks

Dan R.



Message 1 of 22
21 REPLIES
Senior Contributor

Re: $32K in DEBT easy way OUT

Expect your credit to be trashed with accounts marked "settled for less" if you are luckly. I could give you advise and there is a lot of real life advice on MyFico but if you want only first hand info on using a third party to settle your debt for less, there is nothing I can offer other than it's not going to work out well for you. 

Message 2 of 22
Valued Contributor

Re: $32K in DEBT easy way OUT

Debt settlement companies Will Get you out of Debt eventually. But AT BEST your credit Will be trashed!!

If your seriously considering this avenue, Your better off filing for bk. 

 

Best credit wishes to you! 


Current Scores 3/2016 Equifax 676 Transunion 697 Experian 648 Goal Scores: 720's accross the board. Gardening Goal: 3/2017
Message 3 of 22
Community Leader
Super Contributor

Re: $32K in DEBT easy way OUT


WannaB850 wrote:

All,

long story short, i have about $32K in Credit card debt , i have not missed any payments EVER, i have been paying about $950 monthly to all cards just to pay the minimum payment. I have received may letters for debt consolidation companies and i decidaded to call one (InstaFinancial) i dont qualify for a loan because based on my income and amount of debt the monthly payment would be very close from what i am paying already. However he explained this payment plan option where i would call and close all my CC's and put money in an acct $524 every month and in 3 years they would pay all cards, all agreed in a contract.

I want to know if anyone have done something similar and most importantly how much damage will it cause to my credit history for me to close my cards and pay ona payment plan with a third party company.

 

Please give me real life advice not specualtion, i am looking to do it this month still.

 

Thanks

Dan R.


Give us the entire picture - credit scores, reports, net income, budget, each cards balances/limits, ect and folks may be able to offer useful advice.

Most Recent FICO 8 Scores EX616/TU587/EQ607 01/09/2018 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
SDFCU VISA Secured $250
Discover Secured $200
Message 4 of 22
Valued Member

Re: $32K in DEBT easy way OUT

 

pipeguy wrote:

Expect your credit to be trashed with accounts marked "settled for less" if you are luckly. I could give you advise and there is a lot of real life advice on MyFico but if you want only first hand info on using a third party to settle your debt for less, there is nothing I can offer other than it's not going to work out well for you. 


what options are there?



Message 5 of 22
Valued Member

Re: $32K in DEBT easy way OUT

Is debt settling worst then BK? holy cow.... BK in my understanding youre signing away having any credit ever again in your life


Message 6 of 22
Valued Member

Re: $32K in DEBT easy way OUT


WannaB850 wrote:
Is debt settling worst then BK? holy cow.... BK in my understanding youre signing away having any credit ever again in your life

I've seen countless members on here file BK and 3-4 years later have +$100k in credit cards.. 

 

I also know millionairs who claim BK... 

 

its not as serious

Gardening Till 1/1/17...
.... Actually still gardening ( Today : 1/1/18 )
Message 7 of 22
Highlighted
Established Contributor

Re: $32K in DEBT easy way OUT

You can look into a debt management plan. You don't settle your debts but instead they will close all your accounts at your request and the debt management company will negotiate really low rates for you. They take a withdrawal from you every month and disperse to the credit cards you on owe on. It usually takes around 5 years to complete. 

Scores 01/04/2017: EQ 719, TU 750, EX 716
Goal scores: 740 across the board
Message 8 of 22
Frequent Contributor

Re: $32K in DEBT easy way OUT

I was in your position about 9 years ago. I was young as dumb - in about 30-40k credit card debt. I did what you're thinking of doing now - only one payment each month for certain years (don't remember the term). I did that for about 2 months and figured it wasn't going to work out. I filed for BK, not proud of it but I did it. I didn't mess with credit for a few years after I filed. I found this site and then start rebuilding. Now, 7 years after BK, all my scores are 700+ and holding Discover 20.5k, Barclays 10k, CapOne 16k, PenFed 18k, local CU 10k, Fidelity 5k and a 28k car loan. There is life after BK! So instead of wasting money paying (if you're tight on money), you might as well file for BK.
Message 9 of 22
Senior Contributor

Re: $32K in DEBT easy way OUT

In my opinion, filing bankruptcy should not be done as a matter of "convenience". As you stated, you are cashflow stressed, but you have not missed any payments and other than high utility, your credit is not trashed. You need to examine why you are maxed out, be it needed spending vs optional spending. Get a second job, sell online on eBay, cut out eating out, buying toys (things you don't need but want) and then go after one card at a time with a bit extra to pay it off. Look to make a lifestyle change, meaning look where you can save a bit here and there and take that money to reduce your debt. Banks, not fly by night online debt consolidation companies, will issue debt consolidation loans try banks and credit unions - expect to get rejected, but you only need one to say yes.

 

Expect to spend a year or two "suffering" to tackle your situation, but that timeframe is less than what you'll go through with a bankruptcy on your record. I know a lot of folks on here go through bankruptcy for a multitude of reasons, and they recover in 2-3-5 years, but IMO maxing out your credit cards and having a hard time making payments is not reason enough to file bankruptcy just because its hard to pay for your spending. One thing you must do is get past the minimum payment routine, you'll never get out of debt making minimum payments.

 

You have options, bankruptcy is one of those options, but IMO at this point it would be a bankruptcy of convenience not one of necessity (and yes the easy way out).

Message 10 of 22