Budgeting tutorials | Paying off debt

I’ve never posted here before

Hi, I’ve never posted here before but have done some reading of others’ experiences….. and I need some help.

We had $50k in credit card debt. Several months ago I bagged all pride and asked family members for loans to pay it off. I am very lucky that my family had the means and the trust in me to loan us the money, and we paid off ALL credit cards. What a dream!!!! As I paid them off I SWORE that I would not use the cards any more except as necessary for travel overseas which other family members reimburse.

Since December we have gotten ourselves into a HUGE hole again. I still haven’t paid the February mortgage–$2k. We’ve got another $1k on a credit card–never mind how but I admit to serious irresponsibility by myself and my husband.

The trouble is that we don’t make enough money to support our expenses. We don’t see where we can trim. We have refinances our cars to the point where our car payments total $700/month, and we owe more than they’re worth. We don’t have much equity in the house and it would need repairs before we sell, and frankly in our area we probably wouldn’t reduce our monthly payments by much. We owe $1600 to a private religious school which my husband insists upon for our three kids–and that’s after financial aid. Plus of course there’s all the utilities, food, gas, clothing, all those daily expenses.

And when my husband calculated our taxes he found that we owe the IRS $2k for 2015!!!! I’ll be reviewing that because it seems crazy…..

We both have relatively good paying, secure jobs. My husband has been trying to find something that pays more with no luck.

So all in all we dug ourselves out and in a few months we have gotten ourselves back in. And I don’t even know how to pay this month’s mortgage.

What do we do? There MUST be hope somewhere……

I appreciate any help!

I am going to give you the answer that my family and a couple of our friends have decided to take. Second job. I know this is a hard choice to make especially when you have children but a few months of not seeing each other as much will seem like nothing when you get to live your life not burried under all this mess.

My hubby worked nights as a stocker at Wal-mart to help us fund Christmas since we couldn’t squeeze any money out our budget for it. One of our friends picked up a weekend job delivering pizza’s. The tip money helped them start paying cash for eating out and gas so they wouldn’t charge anything else. His paycheck went against thier credit cards.

Might also try selling stuff on ebay or having a yardsale. Its just stuff, it can be replaced when you get out of the hole. Nice things don’t bring much pleasure if you can’t afford the home to put them in.

Just some ideas for ya. It was the hardest thing to do, changing our lifestyle and our ideas about money and stuff. I just remind myself that I want to retire and live comfortable. there are others here that will give you some really sound advice but it all boils down to the fact that you will need to make some major changes and they will be very tough to do.

If you listed your expenses and income you might get more specific advice as to where to cut. You mentioned that you don’t see where you can trim so if you are up to some honest input then I would suggest posting your expenses.

An obvious reduction would be the school. I understand your husband insisting but you can’t afford it and unless you are willing to make changes in other areas you are going to have to cut somewhere.

There’s also the idea to really purge the excess from your house and have a garage sale to bring in some extra dollars and then there’s always the thought of getting a second/weekend job for both of you.

It’s tough and I am certainly not the best person to offer advice but there are lots of people that can really give some honest opinions that will be very helpful.

Consumer Credit Counseling Services | Credit cards

I find it very unusual

I find it very unusual that anyone would want to deal with a CCCS, knowing that they are receiving a “fair share” (commissions) from credit card companies. It reminds me of an old saying, “he who pays the fiddler, calls the tune”. In fact, I read an article from the IRS recently. It stated that the IRS is now very cautious about giving out Not For Profit standing. They accused the CCCSs of really being “debt collectors”, which in my opinion, they are.

If anyone doesn’t believe this, why not ask a CCCS this “fair share contribution” and wait for the answer. Notice how they answer it…

Can anyone honestly tell me how a so-called Not For Profit organization like CCCS can survive on a client’s “voluntary” contribution of $30 per month per client? I don’t think so!

CCCS is not a debt elimination company, they are a debt management service. Big difference.

Sorry to the blog for putting CCCS in the debt elimination catagory … It IS a debt management company. I think of them as debt elimination only because alot of years of due diligience and paying them off they were(my debts) eliminated!

Well, for those of us who don’t want to take the easy road and declare bankruptcy I felt in the 4 years that I dealt with CCCS they were more than helpful. I, honestly, didn’t care how my debt was managed. I received the desparately needed assistance from them to deal with the creditors who were so cut throat and nasty and called every day.

Being so far in debt and having your house threatened to go into foreclosure having CCCS help us with all the other creditors was such a lift from us. In the mean time while we under the debt management program we were able to develope a budget and begin to see the light without the constant nag of creditors! In my opinion ALL the creditors are crooks! They deserve to pay companies like CCCS,(if that is the case, I don’t know that) or any other. For the creditors to continue offering credit to people that are over their heads, or to college students or to the elderly when they can’t make the payments… and they know this is… completly wrong of them.

I know that people are going to disagree and that is fine. I won’t have a credit card now unless I use them, and don’t pay them interest! I learned they aren’t worth the pain and suffering if I can’t pay the bill when it comes.

But to get back to the point, CCCS worked for me and lots of other people. As, I said in my opening remarks it may not be for everyone. But if you are so far over your head and dealing with the creditors directly to come up with some payment arrangements, decreasing your interest rate or whatever and the creditors decide they won’t accept your offers then it is alot better than loosing everything you have. Working with them at least allowed us to surface, work hard and stop those annoying creditors calls.

Debt elimination companies

Has anyone ever tried those debt elimination companies?

I am new and was wondering if anyone has ever tried those debt elimination companies and if they are any good. My husband just quit his job and I am looking for options, as I have way too many cc’s and I know we will not be able to make it. I have never been one to budget as I work ALOT and think I should be able to buy my kids designer clothes and have what we want. My husband has no clue about raising a family and the expenses or if he does it just all falls to me.

The first need in your situation is to set up a budget.

Everyone has a budget some live above their means some live within their means and some live below their means. They just don’t know exactly where all of the money goes.

Take a writing tablet with you every day and write down how much you spend money on for a month. 3 months would be better to get a handle on how much is spent in each category variable expenses are clothing, food etc. there a fixed expenses such as home mortgage, auto loan, utilities etc. After you know how much you are spending then you can find out places where you can cut spending. There will be some tough choices you will have to make. If you don’t get a handle on your expenses with a budget then you will never get out of debt.

I lost my job 4 yrs ago, I was the breadwinner and we have been living on one income my wife’s ever since. During that time we have paid off our house mortgage 2 automobiles and we are now totally debt free as of Dec 2014. This would not have been possible if we did not have a budget. We now pay cash for everything we buy. We are building a life toward financial freedom. Signed, living debt free.

I’m a bit puzzled why he quit his job. Was this a plan to stay home with the kids, or something totally unplanned? Is he looking for something new? Is this temporary or longterm?

I’m sorry to say this, but you will have to adjust your attitude or go further in debt. If we are to live within our means, we have to limit ourselves to what we can afford, not whatever we want. And while you dig yourself out of debt, you will have to limit yourself even more since you need to pay those credit cards. There won’t be any money to buy designer clothes. You may even have to shop at thrift stores (which is really quite fun actually, its like hunting for treasure).

Most of us get into debt by thinking we should have more than we can afford. And that is the main thing we can change to get out of debt. It’s simple, even it isn’t easy.

You need to sit down and do this together. You are a family. This affects both of you, and you are both part of the problem, and you can both be part of the solution. This is a team effort, and you need both of you on the same side.

Consumer Credit Counseling Services

I must agree with everyone so far

I must agree with everyone so far. Let me add by answering your original question. Try to stay away from any debt elimination companies. This will ruin your credit.(if you haven’t already) Credit reporting agencies consider using these companies similar to filing bankruptcy.Consolidating debt may help but it doesn’t do anything about why you got in this spot in the first place.First thing to do is stop using credit cards TODAY, and start that budget.

I was interested in getting some advice on ever improving budget planning ideas. I think it is never wrong to continue to get ideas. However, I must disagree with the person who wrote in to stay away from debt elimination companies. My husband and I 6 years ago, got a reality check when we were way over our heads. We contacted our pastor for guidance and he suggested gettting assistance from CCCS, Consumer Credit Counseling Services. We worked with them for years. It did not hurt our credit. If your finances are in such a disarray, there is nothing wrong with seeking assistance. They worked with us our creditors and after a couple of months most companies reversed the “late count” because we were showing them that we were trying to meet our obligations without going bankrupt.

Now, there are alot of debt consolidation companies out there that a sham. You have to be very careful. However, CCCS, is a not for profit national organization that is highly rated. After we were done with CCCS, we had such great credit established that when we went to buy a home we had no problem… as our scores were great!

So, the word out there not to do this may not work for everyone. However, in our situation and the experience I had I would highly recommend CCCS, if you are in need of getting under control, that is to get you at least started on the right track.

I hate to sound like this, but maybe the real solution is for your husband to get back to work.
You also should sit down with him and make him aware of whats going on, and if not at the very least create a budget, then draw up a list of your expenses and your income. You will have to find a middle ground. Expenses of $5000 per month and income of only $4000 a month doesn’t really leave you with any options.

This list was designed more for helping people to help themselves. Not some sort of magical debt elimination program.

For starters, list out all your monthly debts.
Mortgage, cell phones, electricity, gas, yadda yadda.

Then list your approximate income.

If you have budgetted $150 this month for clothes for the kids, but need an extra $50 for bills, and the designer pants are $90 and you need two pairs, but the no name ones are only $35, can you see where I’m coming from?

When I was a kid, I ripped at least 2 pairs of pants per month. My parents bought me pants that fit, and kept me clothed for public school. I didn’t get teased because I didn’t wear Levi’s. But when I fell off the swing, and ripped a big hole in them, she was less upset because they were $15 and not $65.

Just some things to think about after watching this video:

Budgeting tutorials

Debt snowball method

It sounds like you are really rocking. Just a little update. My husband is still completely disabled from the strokes but just like this debt recovery- baby steps, baby steps.

Was listening to Ramsey and reading all the posts and took a step of faith and called Barclaycard – now Wash Mutual. Had bal due of 1200.00 and was sending 500. per mo. Called and asked if I could settle- they agreed to the 500 being the settlement. One phone call saved me 700 plus dollars. They did try to get the electronic digits on my checking acct. But I had listened to enuf Ramsey- no soap. Gave me enuf courage to call the dreaded Capitol One owe 7300. They offered to settle for 80& like 5800. I will call again. Anyone have any experience with Cap One?

Since the fall when we started Ramsey my car is completely paid off 3300. Singular is gone. The medical bills are paid- all receipts saved for income tax deductions- and I see an mbna bill for 3900. gone in the next few mos. Still will have about 19000 more to go.

Thank God for Ramsey and you. I had gone to credit counseling seminars and bought every book by Mary Hunt and got more and more mixed up. I kept going off in 10 directions. The key is that gazelle focus- intensity if you will. Also read a great book the other day from the library – The automatic millionaire – very good read.

that was inspirational! I love to hear stories about people winning. It reminds me it can and should be done especially since our situation is not near as tough as yours has been. When it comes to doing a settlement the name of the game is persistence and insistence.

While you’ll have quick wins with some companies others will play hardball. Capital one is one of those companies that will try to get everything they can before they relent.

The further behind in payments and the closer you become to the charge-off date (usually 150 days to 180 days) is where you’l get the sweetest deals with the hardball creditors.

Just keep repeating your message like a broken record. Record everything said, and use the law as reinforcement to get the best settlements.

I wouldn’t settle with Capital One for more than 50 cents on the dollar. If you work it right you can get 35-40 cents on the dollar.

I hope that this helps.

I started making calls tonight and yeah, it didn’t work out.

I received a letter from OSI on behalf of Bank of America stating that there was an intent to sue. It was not a formal certified letter just another statement looking thing. I called them and they were offering a settlement of 80%. When I mentioned that I could not pay that, they then said that they needed $400 a month. Yeah, if we could make that payment then we probably would not be in this situation, right?

So my question to the masses is this.

I haven’t paid on time or the amount required since August. It’s usually been between $15-$45 on balances from $2,500-16,000. I know it’s ridiculously low but it is what it is.

At this point, since I’ve not paid but very small payments since August 2005 does that make me at least 120-180 days past due? At what point will they be willing to settle for the lowest amount? Has anyone had any success in just getting the account closed, the late fees and excess charges removed and then being able to make monthly payments?

I have some money coming in that would allow me to pay off 4 of my largest debts IF they are willing to settle for approximately 22-23% of the balance. What can I say or do to get them to do that? Anything? I’ve been continuing to send in payments based on a pro rata plan but am wondering if this is the best choice. Or should we just save the money to be able to offer larger settlement payments?

I just don’t know what to do. I wish someone would tell me! LOL So any advice, experiences that you could share, I am listening. If you know how long I need to wait to settle, let me know.

I would like to settle with them but need help in knowing what to say, when to say it etc. If you are out there PLEASE offer your advice and experiences. There are others out there that need the info too.

Debt settlement

What steps do you take first

For those of you who have been successful with debt settlement.

Did you negotiate this with your credit card companies right off the bat or did you start first with asking for a decrease in the balance or interest rate. When negotiating debt settlement – how do you present your case? I don’t know what to say to these people.

Discover directed me to credit counseling and they want a specific amount that I can pay each month. I don’t see how this is going to help any with the high APR I have.


Loans For Bad Credit?

Hi, I’m new to the group! Due to a divorce and recent years of bad decisions, my credit is not good. If I could get a loan (around $6000) that would pay off everything and bring all my payments current, plus I would be paying less per month.

However, I am having a hard time getting a loan due to the bad credit. I have held a full-time job for almost 8 years and could have payments automatically drafted from my bank account. Does anyone know where I could do this? Or is there a better way? I’m open to suggestions. Thanks!

Consider installment loans, not payday. Go to www.48Loans.com – there you can get an installment loan even with bad credit score.

Good luck!

Paying off debt

thinking about paying off debt

Hopefully this will be a quick and easy question.

I have aprox. $1700 in debt with a hospital, which was sent into collections a couple years ago. I have tried setting up payment arrangements, but they sent me my bill and said it was due about 2 days after I received the bill. I sent in my bill and lowand behold, my payment was accepted, and I awaited for another bill. Nothing came. About a month later I got a letter from Central Financial Control saying I defaulted on my agreement with them to pay. So I called them up and they gave me the run-around and said they will no longer accept payments because apparently they never got my first payment. Good thing I didn’t send them a huge amount of money. This is the ONLY thing on my credit report. It’s 2 bills equaling up to about $1700.

Now, I talked to a credit counseling guy (free) and said that I could probably set up something where I could settle everything for $1000, if i talked to the right person. This gets to my first question. If I were to pay off the $1000 how should I go about doing it so they don’t rip-me off again? This is A LOT of money to get lost. Should they also report to the credit agency that it’s paid? and would that add a positive note on my report?

thanks in advance.

Before going much further, find out where your last payment went. Did you send a regular check and if so was it cashed? Did you send a money order, cashier’s check,etc? Same question. If it was never cashed, put a stop payment on it before send this company any more money.

Then, once you get a payoff agreement in writing, send the money (after making a xerox copy) either through FedEx or USPS certified so that some human and the company must sign for it. FedEX and UPS can give that info the day it is delivered, USPS will snail mail you back the green post card. Once you have the name of the person signing for the money, you can call the company back and get a verbal agreement they have it.

Then, since you have copies of the check, the payoff agreement and confirmation of their receiving the check, they can not legally do any more.

But again, I would first be fighting to know where the first payment went.

Good Luck.

Debt settlement

Alliance One

This is my first post. Anybody ever heard of Alliance One before?

This is debt settlement company. If you’re interested in our mostly collective opinion of these companies do a search in this group’s archives for the last month. We’ve discussed it in depth and I’m sure that’s why no one has jumped up to answer it again. Check out the archives and then ask any questions…we’ll try to help where we can.

OK, this may be a silly question but is there another way to search through previous messages for “Alliance” other than just typing it in hte search box? I just keep getting the last few messages about alliance one. Thanks.

I have been getting alot of calls from Alliance One for my credit card. They have settled for $13,000 but I can’t afford it. I tried calling my bank for a loan but since my credit is pretty much screwed, I have been denied. Any suggestions?

Credit cards

Save money or Pay off Credit Cards?

I’m wondering if any of you have any articles or books you can refer me to. I am 29 with 2 kids, hubby and house. We’ve accumulated some credit card debt, and a HELOC as well. But we also save money for retirement, to Roth IRAs, 401K and 457 and 529 plans for the future. My question is should I stop our monthly deposits to these “savings” accounts momentarily and use that money to pay off the debt?

See if you can increase/rollover deposits to 401K and IRA an take what’s left from 457 and 529 and try to pay down debt. We temporarily stopped our savings and 529’s for the kiddos until we get out of debt. The more money we have to go against the debt the quicker it gets paid off and the more we will be able to save in the future.

Auto loan | Paying off debt

We decided what to do

We are going to pay off the large loan and the auto loan.

We will then call the creditors and negotiate with them on lowering the interest rate and removing fees.

Anyone have any success stories to share that will help with our calls?

Credit cards | Debt settlement

Credit Card Settlement

I have been paying minimum payments on 2 closed credit card accounts. In the next couple of months, I’ll be getting a lump sum of cash, to then pay off some debt.

I’m wondering if anyone knows if I can call the CC company and offer them a set amount to settle the account. Do they do that? If they would, does that get reflected on my credit report? How low can I offer? I used to be months behind on payments, but have since caught up, and pay my minimum payments on time. Thanks!

Yes you can call and ask for a settlement but from what I understand you may not be successful if you are not behind. I am not 100% sure but you should always call and ask.

It does reflect on your credit and it does reflect negatively. I confirmed with one of my creditors that the difference between what the balance was and what you paid will reflect in a 1099-C which means that you will have to pay taxes on it.

There has been discussion on how low you can offer. Some have said to start as low as 20% and possibly expect to pay up to 35-40% but I am not sure and I don’t have any personal experiences with it. At least yet. That’s what I am working on now. Settling my debt.

I used to be months behind on payments, but have since caught up, and pay my minimum payments on time. Thanks!

First there is no such thing as “on time payments” on a closed account. Once an account is closed the balance is due in full immediately.

I’m wondering if anyone knows if I can call the CC company and offer them a set amount to settle the account.

Yes you can and that is an excellent idea. As for as them accepting a settlement that will depend on if they think they can get the full balance from you. By paying them each month you have put yourself in a position of being one that they can get the full balance out of. I know you were trying to do the right thing but the CC companies NEVER try and do the same so you really have to learn to play harder ball than them.

If they would, does that get reflected on my credit report?

Again depends on the CC company and the terms of your settlement. I would suggest a pay for delete settlement.

How low can I offer?

Whatever you want! That is what is great about “settlements”. You start the ball rolling and let them come back and keepgoing until you both agree. Just make sure you get it in writing! I suggest you start at 10% of the balance owed.

Debt settlement

Need advice on a settlement offer…

Remember this? Back in Nov & Dec we were being called daily from Zwicker & Ass. re: a Chase acct that seemingly could not be settled via our debt settlement program. Original acct from May, 2002 was $4350. Now they state $8490 is owed. I had settled 6 other accounts (paid off $14k) via the ECT settlement program, this is the last one, I had $1900 accumulated towards this when ECT refunded my money stating they could not work any longer on THIS Chase acct, so they sent me a check for the $1900 and told me I’d be better off handling it alone 🙁

This was *my* debt and my husband was aware but let me handle it, he finally took over negotiations as he is more patient and does not get riled up. He offered to send them $3500 and they (different reps would call simultaneously) kept stating they could not accept such a small amount but would check into it and get back to us. They did not. Jerry called them and left at least 3-4 messages asking them to call us. THEY DID NOT!?

Finally, last week, I rcvd a letter from them stating they were reviewing “whether the cost of litigation would exceed the likely recovery”, etc. …blah, blah, blah.

I have prepared a letter as suggested on this forum, but I am still confused as to the amount we should offer.

I have been advised here to: “So offer 25 cents on the dollar and work up from there. DO NOT go above 50 cents on the dollar.” ” and I have also read to start offering at 10%”…

And I am still confused as to what amount I base this percentage on, the $4350 or the $8490? So how much should I offer?

And should I use the USPS for this letter, with delivery confirmation? Or certified so I have an actual signature?

I understand that I should send the payment via UPS, Fedex or DHL.

Thanks so much…

I would offer $1500 and send it by fax…. go to a local Kinko’s or something and send it. This shows you mean business. Make sure to put a date of acceptance by such as:

In the spirit of good faith I am offering to settle this long disputed debt for the amount of $1500 and am prepared to pay in full on or before February 28, 2017.

Since time is of the essence please notify me of your acceptance no later than February 21, 2017 by fax at ###-###-####

Please understand that this good faith offer is not an admission of debt but a way to settle this matter in full.

Also, watch this video:

Debt settlement

I am going to try and settle some of our debts

Things are turning around finally and we are going to call WaMu, Barclaycards, Compass and Discover and see what kind of settlement we can work out. My bonus is finally on the horizon and we are ready to see if they want to work out a settlement.

Anyone have any thoughts they want to share about the companies or your own experiences in settling with them?

I’m new joining the discussion but wanted to put in my experiences. We have dealt with Capital One and found them to be reasonable, most of the time. If you get a customer service person that won’t work with you ask to speak to their Supervisor or better yet the Dept. Head.

Our experience with Discover wasn’t as successful. They are a bit more rigid and unwilling to work with the customer or at least with us anyway.

I don’t know anything about the other two companies. I wish you good luck.

Also, here is what we experienced with MBNA. We had someone going around stealing mail out of mailboxes in our neighborhood. They stole our mail and in it of course was our MBNA bill. We contacted the customer service department right away – she did not say a word after I gave her my account she switched me over to the collections department. The rep there informed me that we were past due on our payment. I explained what had happen and they sent us a new bill with a $600.00 late fee!

I talked to a friend and she referred me to a web-site – The dollar Stretcher.com. I wrote the gentlemen a letter – he referred us to the credit card section of his web – site. We decided to fire my MBNA! We were offered 3 credit cards at 0% for one year. we had to switch every year but it worked!

We now get offers from MBNA because they want us back – I just shred them! Hope this helps.

We had 2 accounts with Discover ($10,000.00 total) and got a reduced payment and reduced interest plan for 12 months on both. We also had 2 accounts with MBNA ($28,000.00 total) and were not able to make 6 consecutive payments so they called to say that they wanted some sort of solution or it would get ugly. They then offered a payment plan for 60 months or an offer to settle at 20% of the total. I countered at 15% and they accepted as long as it was closed by the end of January. I was able to settle with Wells Fargo for about 40% and Chase at about 30%. Hope that helps!

PS I did it all on my own and can only offer the advise of don’t get frustrated, keep a cool head, talk as one human in a situation to another human in a situation.

Well, I am starting my calling tonight. MBNA was up to bat first and they started out with 60% of the debt and ended at 35%. I suggested 20% and the guy said he would talk to his supervisor and call me back. So we shall see.

I am calling Providian next and then Compass and Discover. I am hoping they are willing to settle as I would really like to make some progress.

One thing I did confirm was that they would send out a 1099-C for the remaining amount. For example: if you owe 10,000 and settle for 4,000 you will get a 1099-C for 6,000.

Debt settlement

Settlement letters

Really good info guys- you have really lit a fire under me. If I send a fax say from Staples but dont have a fax machine at home will that be ok? I too am getting ready to settle with more of my accts with my refund but they havent been sending the settlement letters. Capitol One here we go…………..

YES! just ask at Staples if they can “receive” faxes….

My suggestion to everyone on the subject of faxes…. GET ONE! They are really cheap and worth their weight in gold!

You can send a Fax Free at freefax.com…but I don’t know if there is a limit or not.

BUT…I KNOW you can received free faxes–really free… there are limits from efax.com. They will come right in your email in box. I’ve gotten them free for years now. But to send faxes using efax, you must pay a monthly fee of 12.95. At any rate…you can try it out for 30 days.