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Discussion Starter · #1 ·
Ok so we are in trouble and I have been telling myself we are ok or we will get out of it and we wont.<br><br>
anyhoo... we are in credit debt counseling since it combined was as much as the minimum payment on one of our credit cards. So I am wondering in Ramsey's baby steps about paying off the smallest on first...how would it work with debt counseling? We just make one large payment and my husband wants to stay in.
 

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Since you have already consolidated you treat this a one debt.<br><br>
Do you have any other consumer debt? Student loans? Car loans? Personal loans?<br><br>
You take all your debts and pay the mininums on all of them and send any extra to the lowest debt. When that lowest debt is gone you then send all money (above minimums on other debts) and your snowball is starting to roll and your shovel gets bigger.<br><br>
Do you have a budget in place?<br>
If you list all your debts for us, we can prioritze them for you.
 

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<img alt="" class="inlineimg" src="/img/vbsmilies/smilies/yeahthat.gif" style="border:0px solid;" title="yeah that">:<br><br>
Can you send extra to the consolidation company?<br><br>
I'll be honest that we did Dave's plan in general but didn't go smallest to largest. We had transfered a bunch of credit cards to one card with a 4% rate ($27K, ouch) making that our biggest debt, but we went ahead and paid that off first rather than the cars and student loans. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/redface.gif" style="border:0px solid;" title="Embarrassment"> We figured in an emergency, we could sell the cars and defer the student loans but couldn't do anything about the credit card. That's NOT how DR says to do it though.<br><br>
He also advises people to keep an eye out that the consolidation company is actually sending in your payments in accordance with the deal worked out with the credit cards. He gets callers that think all their payments are going out, then they start getting collection calls or hits on their credit reports and they had no idea it wasn't being paid. Can't hurt to follow up for yourself.
 

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Discussion Starter · #4 ·
Ok I will consider it one debt...probably our biggest. I am starting on baby step one when dh gets paid on Friday.<br><br>
I do not have all the numbers but I will sit down.<br><br>
I know we have our car, dh's student loans, my student loans, hospital bills, debt consolidation, one credit card (our overdraft card),<br><br>
I think it may be a toss up between the car and the credit card which on is smallest. And yes we can send extra money to the credit counseling place, and I do check on them to make sure they make payments...so far so good.
 

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Do you have a baby emergency fund in place yet?
 

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write them all down by amount and start with the smallest one and get it knocked off. Its such a boost to see one of your debts gone.
 

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I agree with the previous poster who said it may be wise to pay off the credit card/debt consolidation loan first. You can sell the car if you have to, but probably do not have assets to show for your credit card debt.
 

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I'd check first before sending extra payments on the debt consolidation if it's through a consumer credit agency where the agency has negotiated a lower rate and repayment plan with your creditors for you. Sometimes paying extra on these can actually screw things up, as the creditors will then raise your interest rate, and it's better to just stick with the terms of the original agreement and pay the set amount monthly and use any extra to pay another debt that's not included in this consolidation plan OR start an emergency savings account. If you get down to an amount where you can finally just pay the total balance on this account (like you owe $1000 and you are paying $40 a month and you have an extra $1000 laying around and can just pay the whole thing off at once) then you can do that.
 

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Discussion Starter · #9 ·
good point Kavita.....thank you.
 
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