question regarding settling

[danny44]

I have around 30,000 in credit card debt. a lot has come recently due to medical bills and the holidays. Made some bad decisions. What chance do I have of settling with credit card companies if I can get around 20,000 up front for a debt settlement company to work with. Or are debt settlement companies a rip off. I am married, 2 kid, wife stays home with kids. I am over my head with the new bills and want to get out of the mess without filing bankruptcy. What are my chances?
Thanks

[HRx]

I have around 30,000 in credit card debt. a lot has come recently due to medical bills and the holidays. Made some bad decisions. What chance do I have of settling with credit card companies if I can get around 20,000 up front for a debt settlement company to work with. Or are debt settlement companies a rip off. I am married, 2 kid, wife stays home with kids. I am over my head with the new bills and want to get out of the mess without filing bankruptcy. What are my chances?
Thanks

Hi,

Even after getting a favorable settlement agreement, can you see youself, making the sacrifices, and being disciplined enough to have the debt repaid in 5 years, without crippling your finances to make good on all your fixed monthly expenses? Repaying the your debts without filing for BK will undoubtedly look better on "paper" and will be more to your advantage in regards to obtaining future credit at more competitive rates, etc.

Is the debt settlement company charging you a fee for their services? If they are how much are they charging/what is their fee structure? I ask this, because you can actually do all your negotiating yourself. It's actually not that difficult! Just have everything done in writing.

Good Luck!

[HHM]

If you can get $20,000 and you only owr $30,000, why settle. First, what is the source of the $20K? My guess its some kind of insder loan...family member etc. Otherwise, you really wouldn't need to settle.

Settlement is a tricky business, but yeah, if you can settle at 2/3 of what you owe, you probably don't need a debt settlement company. I think first, you should work up a budget and see where you stand, see if you cannot budget yourself out of debt in 3-5 years.

Basically, add up all the minimum payments, rank your credit cards in order of interest rate [highest to lowest], if possible transfer the higher balances onto lower interest rate cards, then see where in your budget you can cut expenses and devote that payment to your plan. You pay as much as you can to your highest interest rate card and pay the minimum payment on all other cards. When the highest rate card is paid, you take ALL the money you were paying to that card, and devote to the next highest rate card etc etc.

Any basic home accounting software can work up this plan for you, i.e. Quicken, MS Money, etc.

[mark]

I am over my head with the new bills and want to get out of the mess without filing bankruptcy. What are my chances?
Thanks[/QUOTE]


Danny, are these new bills and the credit card bills one in the same? If not, is paying the credit cards going to solve your debt problems? I was in your situation a couple of years ago. I was determined not to file BK so I borrowed more money to pay credit cards off. It wasn't too long after that I needed money for some unexpected car repairs and some medical bills. I did not have much extra income so I used credit cards again. I was receiving new cards in the mail every day due to paying off the balances on the old ones. Well long story short I ended up depleting my savings borrowing against retirement fund and today I am completly broke, 90,000.00 in unsecured debt and my house is in foreclosure. If I had it to do over I would have keeped any cash or access to cash somewhere that was save from creditors. I would have payed my mortgage payments, utillities, medical insurance and then stocked my pantry with food. Any extra would have been for the kids. The unsecured loans would have never gotton a dime from me, ever. When they tried to sue me I would have filed a chapter 7 and been proud about it because I protected my family from the horrible situation that I am now in. I am one month from being homeless and I don't know how I am going to explain this to my children.

Whatever you decide to do, Don't put credit scores or creditors ahead of your family's basic needs. You will never forgive yourself for it. Having good credit is over rated anyway.

"Money is the root of all evil, and credit is the seed."

Mark

[shygal]

Mark,
nicely said .... "money is the root of all evil, and credit is the seed "