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$32K in DEBT easy way OUT

Community Leader
Super Contributor

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

With a BK you can recover to a reasonable level (700-725 FICO scores) in about two years. The drawback is that will be your score ceiling until ten years after the BK. Some lenders will not touch you until the BK is gone. Some lenders will hold a grudge forever if you have a BK discharged debt with them. But there are ALWAYS other lenders to go with. They may not have the "name prestige" as those other guys, but their money spends exactly the same.

 

A Settlement, OTOH, will result in a lot of intial derogs, but they will only stay on your reports for 7 years, and not ten. You will see a steady rise in scores (as long as you rebuild) and can hit 800+ once the last derog comes off.

 

IMHO, a BK should only be considered if you are defaulting on debts and they are suing you and trying to take your wages and property.

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 11 of 22
Valued 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.


Dont go to a Debt Consolidation Company! Go to a non-profit consumer credit counseling service. They are much better, your credit wont be as damaged as much, and in many cases they can get credit card companies to positively re-age your accounts. 

 

 

Message 12 of 22
Highlighted
Valued Contributor

Re: $32K in DEBT easy way OUT

Another thing. Read the fine print. The Debt Settlement Company will take their money before your credit card company receives a penny. So if your totle credit card debt is $32,000, the Debt Settlement Company will charge you 20% which is $6400. That means the first 12 months of payments will go to the company and not the credit card companies. The credit card companies could still sue you for non-payment.

Message 13 of 22
Established Contributor

Re: $32K in DEBT easy way OUT

I own 30 k in credit card but 20k are interedted free for 18 moths . i just need to pay cash everythigs i buy and make payment on time .. Let see how it goes
Amex ED (2000) Amex BCE (2000) Amex macys (5000) Amex Gold , VENTURE (5000) MC PLATINUM (600) CAP QUICKSILVERONE (1250) CAP QUICKSILVER (4500) CAP QUICKSILVER (3500) PENFED AMEX (5000) PENFED CASH REWARDS (25,000) PENDFED REWARDS VISA SIGNATURE (20,000) UPROMISE (1000) NFL (4000) OVERSTOCK (2800) HSN (3200) DISCOVER IT(8500) AMAZON PRIME (10000) MARVEL(7000) BOF VISA(2000) BEST BUY VISA CITI (9000) BLISPAY (9000)Amex Magnet (10,000) Uber (3100)

WELCOME TO 100K CLUB . LAST APP 08/29/18 Credit Score 8 TU 720 EQ 705 EX 724

Starting Score: 640
Current Score: 720
Goal Score: 850


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CARD I want .
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Now back to the garden until 2020
Message 14 of 22
Frequent Contributor

Re: $32K in DEBT easy way OUT

Please DO NOT use a debt settlement company, you'll pay THEM more in fees for settling your debt, and monthly service fees than it's worth for them to settle your debt. That money could go to your debt, not in their pocket. PLUS what they'll do is wait for your accounts to go 6 months past due, then offer nothing to the original creditor. The creditor will reject their offer, or ask them to supply a hardship packet to them (such as your incoming/outgoing espences, financial info) and they will refuse, talk smack, and then wait for it to go to collections. By this time your credit will have all these lates, and a charge off. They will then low ball a collection agency, who will then sue you and then garnish you.

I've done 3rd/1st party collections for 12 years. IF a company is willing to SIF a debt, they would rather talk with YOU than a debt settlement company. They will give you both the same "deal" or answer.

 

I personally when I was younger went through Debt Reduction Services which is non profit, most debt management companies such as Money Management are horrible, or others are only concerned about what they'll get in their pocket. I had about 20k in debt when I started using Debt Reduction Services, they were able to get a few cards down to 0% apr, and lower my monthly payments, others were able to lower the APR some, others not at all. I was able to talk with them as to which cards I wanted to include and which ones I didn't since it wouldn't make any financial sense to do so. It will mark your accounts as you're working with a debt management company, however that's better than a SIF or Charge off. I was able to purchase a home and have all my old debt paid off in about 3 years since I was dilligent at it. However, if  it won't work out for you I would honestly say do BK rather than hiring a debt settlement company. A BK would actualy be better for you. If you've never missed any payments, and file you will look better than most coming out of BK. I unfortunetly/fortunetly had to file BK this year due to life events and MY scores actually went up and I'm sitting at EQ 624/ TU 544 (dealing with a dispute currently is reason for low score)/ EX601 and I was DC from CH7 BK on 10/12/16. My fresh out of BK scores are way better than most, since I never missed a payment prior.

Ch7 BK filed 7/5/16, DC 10/12/16
Message 15 of 22
Valued Contributor

Re: $32K in DEBT easy way OUT


NormanFH wrote:
 

IMHO, a BK should only be considered if you are defaulting on debts and they are suing you and trying to take your wages and property.


+1 While recovery from bankruptcy is doable in much, much less than the 10 years it stays on your reports, it really is the "nuclear" option. If you're not in danger of being sued/garnished it's time to buckle down and try to get your debt under control.

 

I think many of us (obviously not all) have extra room in our budget. It means realizing what is truly a need vs a want and making some sacrifice. While still married we were really struggling at one point. I took one month and counted where every dollar and cent with. My ex couldn't see an issue with him spending $3-4 at the gas station / convenience store a few times a week plus another $10-12 on lunch 2-3 times a week. He was averaging almost $200/mo on eating out!

 

Figure out if you have a hole you can plug and if you have the abilty to earn more (seasonal job??) and throw every spare dollar you can at your debt.

11/2017: EX 704 | TU 720 | EQ 672 -- Starting (2/2016): 630 | 620 | 580 -- INQs: 17 | 26 | 28 (last 6 months: 5 | 2 | 6)
AMEX Delta: $10k, Marvel: $8k, Discover IT: $7.2k, AMEX BCE: $6k, Target MC: $5k, PayPal 2%: $8k, CO QS: $2.6k, Merrick: $1.6k, Barclay's NFL Rewards: $1k, CO BuyPower: $500. And a mix of well-loved store cards.
Message 16 of 22
Frequent Contributor

Re: $32K in DEBT easy way OUT

Having suffered a number of years with marginal credit, I would do everything in my power to recover without taking any shortcuts.  Find some way to pay more than the minimums, cut the smallest debt out first, then tackle the next, then the next. It will take time, but I'm sure you can recover without such drastic measures as debt settlement or BK, as long as your situation is still good right now.  Believe me, it's worth it.  Everything is better with good credit.


Rebuilding since 9/29/2015: EQ 599 TU 582 EX 569 $5K avail
11/2018 EQ 704 TU 715 EX 719 ~$85K avail
Message 17 of 22
Community Leader
Super Contributor

Re: $32K in DEBT easy way OUT

my advice...file BK. Is this debt company even legit? It would look worse for all your acts to says settled for less than owed, than $0 ball/IIB. Seriously....if you are that far in debt, no one will finance you a loan to get out of it.

Once you are discharged, you'd have credit back within 1-3 months after discharge. I played that minimum payment game for 6 yrs...

Scores held down by umpteen INQ & New accounts, and a paid off loan and new loan reporting.
~~~BK7 d/c-08/2013......my rebuild worked for me, but won't necessarily work for you.~~~
Message 18 of 22
Frequent Contributor

Re: $32K in DEBT easy way OUT

I wouldn't deal with these people. Their going to charge you to pay your bills. You can do the same thing yourself for free. I almost got mixed up with one of these companies years ago and they were going to charge me over 2 grand just to send my money to my creditors.
Message 19 of 22
Valued Contributor

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

Really?   Look at my siggy below.

NFCU Visa 25k | Cap1 QS 11K | Cap1 QS 10.5K | Barclay Apple Rwds 9k | Amex AU 20k | Citi AU 10k | Delta Amex 2k | CFNA FS 2200 | VS 1200 | Car Loan 10/14 | Goal 740 by 9/17
Message 20 of 22