Getting Out Of Debt Question

[Jetka]

Hey there.

I've posted before about how my husband and I are $18,000 in debt. He brings home $1200 a month after taxes. Now after paying all of the basics and not paying any of our credit cards or on our loan...we only have $400 left over...and that's not with putting any money aside in savings for when the baby needs new clothes, doctor visits, emergencies...etc. I had gotten ahold of CCCS and they said they would need a payment of $462 a month to pay off our debt. Obviously...that's more then we can afford. So I was considering just putting our top 3 or 4 credit cards and our loan on CCCS and then try and negotiate with the other credit cards. Is this a good idea? How might I get the credit cards to work with us and understand we can't pay a whole lot a month? Any suggestions would be very welcome.

Thank you!!

[Herausgeber]

If you're not able to increase your income, you may be a good candidate for bankruptcy.

[oneKnight]

My DH did/does CCCS and they helped TREMENDOUSLY. If they did nothing else, they got the interest rates knocked down so that we could actually make some headway.

Are all your cards maxed out? I mean could you transfer the smallest balance to another one so that you would have to make less separate payments and maybe reduce that minimum a little? It wouldn't really help much, but it might help enough to let you make the payments.

[Red]

When my 16yo twins were babies we were $30,000 in debt and had NO income. : Man, it was awful.

My mother gave us $15,000 as my 'inheritance'. (She told my sis and I she'd be spending every penny that was left, so not to think we'd get anymore! )

That left us $15,000. I called every CC company, told them how bad it was, honestly. Out of 15 cards, only one refused to be helpful. SOme dropped the interest completely, others cut it drastically. We agreed to make certain payments each month, small amounts.

If you have to file bankruptcy, they aren't getting anything and they know it. So it makes sense for them to work with you.

I wouldn't go with a CCCS. It goes on your credit report and they aren't, to me, that helpful. You can easily do what they do. Also, if you can't make the payments to them, you're in a whole new world of trouble. Easier to screw up and have to call teh CC back!

Do you get those offers for a 0% cc in the mail? Get one and transfer a few balances. Make the minumum payment. Get Dave Ramseys books from your library, and get a plan.

Dave Ramsey says, (and this is the super short version!) to pay down your smallest card first. Once it's paid off, apply that money to your next card. I just started a 'snowball' thread a few weeks ago on this forum. JOIN! When you get the smaller cards paid off, start applying the extra to that 0% interest card.

Make sure you put a bit away every week for emergencies, or you just have another one come up and use your cc again. That's been where I screwed up in the past.

You CAN do this!

[Herausgeber]

Jetka, since you mentioned the after-tax amount of your household income ... Are your witholdings correct? I know lots of people love getting big refunds at the end of the year, but if you're holding out too much from each paycheck (which is what a refund means), you should consider adjusting that so you have the money to put toward your debt now.

[swampwitch]

I used CCCS to get out of debt a few years ago. In hindsight, I wish I had just called the CC companies myself and arranged things. It would have saved some money in the long run. However, sometimes things are so overwhelming that having someone else make the arrangements is all you can muster your energy to do.

[oneKnight]

Originally Posted by Red

I wouldn't go with a CCCS. It goes on your credit report and they aren't, to me, that helpful. You can easily do what they do. Also, if you can't make the payments to them, you're in a whole new world of trouble. Easier to screw up and have to call teh CC back!

Do you get those offers for a 0% cc in the mail? Get one and transfer a few balances. Make the minumum payment. Get Dave Ramseys books from your library, and get a plan.

When we tried to talk to the CC company and tell them that we could make the same payments without going through CCCS (and paying the CCCS $15) they told us that if we quit the "debt management plan" that they would require more minimum payment and sky-rocket the APR again. We were saving about $50/month even AFTER paying the $15 to CCCS.

I've looked at the free copy of both mine and DH's credit reports from all three companies, none of them say anything about using CCCS. In fact, hubbs got the benefit of my good record just by listing him as an extra cardholder on one of my accounts (so he could access emergency $$ if I was unable). I'm still unclear if the credit report that I can see is the same one that everyone else sees.

Just today we got one of those pre-approved 0% offers in the mail. MOST don't apply to "balance transfers" but this one did, and since we already had a plan in place to pay it off within the next year, the 0% for a year deal is gonna help us by not having that extra $50 interest to pay every month. Most we've ever gotten the 0% only applied to purchases, not to balance transfers. There is a balance transfer fee of 3% or $75 though. : (it's still gonna save us $$ though!) They find some way to make their money.

[Red]

oneKnight, I guess I'm wrong!

Talking to a supervisor, if you went off the plan would be a must. I was never put on a plan, arethey new? I just worked out a deal with them.

Call the new CC (0%)and ask if they'd waive the fee if you transfer your money. They'll say no. Ask for....yup, the supervisor. Ask about the fee again, and mention having another offer, for a tiny bit more interest, but NO fee, or a lower one. You might be surprised.

[oneKnight]

Originally Posted by Red

oneKnight, I guess I'm wrong!

Talking to a supervisor, if you went off the plan would be a must. I was never put on a plan, arethey new? I just worked out a deal with them.

Call the new CC (0%)and ask if they'd waive the fee if you transfer your money. They'll say no. Ask for....yup, the supervisor. Ask about the fee again, and mention having another offer, for a tiny bit more interest, but NO fee, or a lower one. You might be surprised.

I'm not sure if the "plan" part is new or what, they just call the whole thing a "DMP" debt management plan.

I think I do have a standing offer on the card that I already have, for 3% balance transfers and no fee. I'd hafta re-read the fine print to check the fee, or heck just make something up...it might be worth the try! Thanks for the idea!