I'm in debt.., What should I do? Options

[Jen]

I am about $8k in debt. My credit score is a 600 , and my income is so crappy.. that I don't even want to post it.

I was in more debt, but I have paid a lot of it off.

Should I get a consolidated loan, and put all of my bills into one?

I asked someone, and they said they could only give me a credit line of $2200, or something.

I'm just so confused.. and I just want to not worry about making 5 payments a month.

Does anyone have experience in this kind of thing, and could help me out?

I'm going to go to the bank sometime this week and see what I can do, but I'd like a little advice beforehand.

I am STRESSED to the MAX.

[bseaman_5]

My advice is get rid of the credit cards.

[FreddyTheOthaMea...]

Taking out a loan to pay off debt = even more debt. 8k aint bad, i take it you have never been to college? cant offer much in the way of suggestions other than get it paid off and do it as fast as you can, provided you can make payments. but 8k aint bad and def nothin to get too freaked out over. go grab a beer and chill (sound advise for pretty much any situation)

[Jen]

My advice is get rid of the credit cards.

I don't use any.. I have one only at the moment.. and I either don't use it, or pay it off every month. All of the other cards are cancelled.

How does getting 1 big loan equal more debt? Wouldn't it be easier with one monthly payment and a low interest rate? My interest rates are between 13 and 23%.

I have been to college. I am in college. Idk what would make you say that.

[GriffGirl]

A consolidation loan will kill your credit, plus, if you can't get enough of a loan to consolidate all of the debt, there's no point in the first place. Basically you'd need a personal loan for 8k, and personal loans are really hard to get for people with decent credit, much less for people with bad credit (myself included).

If it's really bad and you're absolutely drowning and chasing your tail, you might want to consider filing for bankruptcy. It's expensive to do though - if you go chapter 7 where all your debts are wiped out (except federal debts - taxes and student loans) you have to cough up the cash up front, you MUST use an attorney (not by law but there's so much paperwork involved you could really screw yourself if you don't) and it'll run you about 4 to 5 grand. You will also have to list all of your assets, and anything you have worth anything (CAR) will have to be liquidated.

You can file for Chapter 13, which is basically a repayment plan of all of your debts, but gets all your debtors off your a$s and halts any wage garnisments. You have to list your assets also, but you get to keep most of them (maybe not the vacation house in Malibu ) and your repayment is based on your income and lasts not less than 36 months and not more than 60. Typically you will need to come up with a retainer fee TBD by the attorney but will be at least $300, the cost of the court filing fee.

Chapter 7 stays on your credit for 10 years; 13 stays on for 7. It's my understanding that Chapter 13 is a little bit of a softer blow to the credit score, because you're actually repaying your debts rather than erasing them, and you can start rebuilding your credit after about 2 or so years into it as opposed to Chapter 7, which is essentially the kiss of death for a good ten years. Of course there's lots to consider if you do file for Bankruptcy either way - don't expect to be able to keep any credit cards you have, don't expect to get a mortgage any time soon, and don't expect to find it easy to get new auto insurance or a new apartment if they run credit checks in addition to criminal checks. But then again if your credit is already totally effed up, you already have these problems. At least by filing you can start with a clean slate and start building back up.

A decent attorney will give you a free consultation.

[MercuryFree]

A consolidation loan will kill your credit, plus, if you can't get enough of a loan to consolidate all of the debt, there's no point in the first place. Basically you'd need a personal loan for 8k, and personal loans are really hard to get for people with decent credit, much less for people with bad credit (myself included).

Would it kill her credit more than bankruptcy would though? I would have recommended it otherwise. Even if you can't get enough to cover all your different debts, if you can consolidate 2 20% loans into one 13% loan you're going to be better off regardless...

Moral of the story, debt is bad kiddies.

[Supersprynt]

Where is your debt?

What are you driving?

[Jen]

How does a consolidation loan kill your credit?

Debt is in..
best buy
medical bills
school
clothes
shoes
ex-fiance's car
my car
oweing an apt complex money b/c of my ex
blockbuster [stupid ]

My ex screwed me over in MANY ways, and now my credit report is showing things that I paid MY HALF of, but because it was in both of our names, it is in BOTH of our reports.

[jgreening]

1. Do not charge or borrow another cent until everything is paid off
2. sell unnecessary items and put all proceeds to debt
3. get rid of discretionary monthly bills (cable, more than one phone, etc.)
4. get 2nd or 3rd job and put ALL of the income to the debt
5. pay off highest interest rate loans (cards) first

I agree that 8k is totally doable even on a meager income.

When I was in school, I was about 5k in debt (a few years back) and got out with about 18 lean months.

It sucks, but I would never want to file for bankruptcy unless there was absolutely no other way out. Once you do, good luck ever getting a mortgage if you want a house someday. The whole "it only stays on your credit report for 7 years" is BS.

[Jen]

Well, I'm definitely not going to file for bankruptcy. I'm just stressed about how many bills I have. I have been doing good though.. I paid off about 7k of debt in the last 2 years.. then again at that time I was making very good money. I'm just.. getting frustrated.

This post has been edited by Jen: Aug 18, 2008 - 10:23 PM

[lagos]

Don't do any debt consolidation. All those companies are out to scam you and just make money from you.
You might lower your monthly payment with them, but your over all debt will be higher then it is now and your credit score will be even lower.

First thing you should do is call up your credit card companies and ask them to lower your interest rate. This works about 50% of the time.
Then start out by paying off the card with the highest interest first.
And stop using your credit card. Even if you pay it off at the end of the month, thats money that should be going to pay back the other cards.

[Jen]

I wouldn't do it through a debt consolidation company, I would do it through my bank.

[lagos]

btw, you mention medical bills.
Did you ever try to negotiate with them to settle on a payment?

I had an 800$ bill from one consultation visit at a specialist (insane, i know). I kept calling them over a few months because my insurance wouldnt cover it, and I wasn't about to get robbed by them. Finally they sent me a letter saying that they are about to send me to collections if i dont pay the bill in full. I called them back and offered them 300 bucks. They accepted and the bill is settled without going to collections. I found that pretty much all medical billing is open to negotiation, since that's pretty much what insurance companies do with them on a regular basis.

However this only works with bills you have not yet made payment on. Once you send them any money at all, then you are legally bound to pay off that set amount.

[Jen]

Insurance has paid for most of my medical bills, and my family and I did negotiate with them.. but it's still pretty expensive.. over $2k. Before insurance.. it was close to 100k. But after insurance and negotiations, it was about 7k. My parents have helped with this one, but I am now taking responsibility for it because my dad is retiring and the funds won't be as abundant.

[FreddyTheOthaMea...]

wow im sorry that came off the wrong way. what i ment by it is tuition debt is usually pretty high outside of like mortgage, medical, etc etc. didnt mean to be insulting

[SlickRick]

fake your death problem solved

[Jen]

fake your death problem solved

Thanks for the help! Wow, this was the best advice so far! I shoulda thought of that..

[97Celica]

Get a sugar daddy...no,but seriously...how did your ex's car put you in debt? You paid or PAY for it currently?

[99GT]

Just spend on what you need. Pick up a few side jobs, or 2nd, 3rd jobs.

Stop going out.

I'm in the same boat.

[Jen]

Get a sugar daddy...no,but seriously...how did your ex's car put you in debt? You paid or PAY for it currently?

I bought him a car with a credit card.. huge mistake on my part.

Trust me. I don't go out. I have no life basically.

I'm just going to the bank today and talk to someone. From what I have researched, consolidated loans do not hurt your credit as long as you cancel and close out all prior accounts, and always pay the loan on time.

[x_itchy_b_x]

This video, should help you immensely its very short but has so much information in it.

[D-Man]

1. Do not charge or borrow another cent until everything is paid off
2. sell unnecessary items and put all proceeds to debt
3. get rid of discretionary monthly bills (cable, more than one phone, etc.)
4. get 2nd or 3rd job and put ALL of the income to the debt
5. pay off highest interest rate loans (cards) first

6. Don't use credit cards period. They are retarded.
7. Start operating with CASH as to not send that bank acct. negative
8. Quit buying people stuff
9.Get the car back from your ex; and if he wants to play hardball, you can file it stolen. It's on YOUR credit card after all. It's YOUR car
10. Sell the car


Was your Ex on the lease at the appt? If not than you are screwed. If so than he can be made to pay too.

Credit cards are the STUPIDEST invention on the planet!! Say that you have high intrest (just to make this easy) 20%. Okay, so you go and buy something that's on sale for $100. IF YOU PAY IT ALL OFF THE NEXT DAY YOU PAY $120. That credit card just made that sale price regular price Taking a loan to pay debt will do the exact same thing! You'll borrow $8000 @ 20% so that you can repay $9600; plus the intrest will compound over time (meaning that what ever you don't pay, interest is accumulated on the already interest-accumulated interest)

Bank Accts are pretty retrted too. They leave massive paper trail so you can get "Credit-Line" and get bigger credit cards, & They give you a debit card. of course they'll ALWAYS find a way to send you overdraft, and "clear" every little tiny purchase AFTER they process the Overdraft so they can hit you with $35 charges for a $2 soda. Ridiculous. Cash is the only way to pay.

But that's just my humble opinion. MANY people will disagree with me. (hell i just don't like paper trail )

This post has been edited by D-Man: Aug 19, 2008 - 8:21 AM

[DEATH]

I too, try to handle everything I have in cash. I take the entire amount of money I pay in bills every month add 10% [total x 1.10] then divide that by the number of paychecks you get each month and that is your deposit every pay period. Then the rest of the money is yours to do with as you please always bearing in mind Gas, Cigs, Food etc but if you do use up all your cash you are only ever poor for 1-2 weeks depending on how often you get paid. It seems simple but it's a wonderful system designed to keep people like you from doing what you have done to yourself.
I also agree on this: Stop buying people stuff [Especially stuff that must be payed in payments]. No one is forever and they always give you the backhand with your own kindness as they walk out the door [As you ex has demonstrated]

[CAMAricer]

$8K may seem like alot of debt, but trust me, the amount of money I owe eclipses that amount by many times over.

Consolidation is not a bad idea. Credit scores are easy to fix. As soon as you start making payments and begin lowering the amount of revolving credit, your scores immediately will start going back up. And yes, the best way to consolidate is with a personal loan from a bank or family member.

It's a shame that you don't have more credit cards right now. Yes I know that sounds stupid (what I just said), but many credits cards right now (due to the economy) offer balance transfers at LOCKED APRs of 0-5%. So if you can, try going online and searching for all these credit cards companies that are offering 0% balance transfers with fixed APRs on all transfers. It is important to make sure that the APR are fixed for a good amount of time (of forever). Then after you switched all your debt to these credit cards, cut them up so you never can use them and make sure you make the minimum payments on each one.

Yeah, it'll take alot of book keeping to make sure all of them get paid on time, but in this way, you can take advantage of all of the low APR offers out there. I, myself, have transferred about $40K onto my credit cards and have fixed them to 0% and 2% APRs which are WAY lower than my student loan interest rates!

PM me if you want to know more about how to do this.

[97Celica]

Do you own the title to the car? you could sell it.

[creis]

best buy
medical bills
school
clothes
shoes
ex-fiance's car
my car
oweing an apt complex money b/c of my ex
blockbuster [stupid ]

ok so here is what I would do, I would not consolodate by getting another loan, I would prioritize and change a few things. pay it off like this in order: (pay the min on the other bills and every other cent must go to the one your paying off.)

- Blockbuster (cant be THAT much pay it off first with every extra cent you have including selling the movies if u can. (can re-buy them later when your out of debt.)
- best buy (again hopfully not THAT much, pay it off after the blockbuster bill is gone, sell the stuff you bought there if posible)
- cloths and shoes - sell sell sell, whatever you dont ware or can live without, sell it to help pay this off, then go from there till its paid off.)
- as for the ex'es car, if he is not paying for it and its in your name, its now your 2nd car, take it back and sell it, if he wants it he can buy it else he needs to not be a bum, its only hurting you. if he is paying for it then unless he misses a payment your good on that one.
- your car - just make the payments, with most everything else paid off this should not be so bad.
- medical bills - dont know just make the payments. Insurance?
- apartment - is the ex on the lease? if so make him pay up, if not it was probably a mistake to take it, find a cheaper appartment or move back home or stay there and just make the payments chances are by this point you will only have 1 car payment, medical payment and apartment, you should be in the clear.

Best of luck!

[Jen]

Gosh maybe I should elaborate. I feel like I am being lectured.

I repo'd the car from my ex, but he hasn't paid me for it. Yes he was on the lease because we lived together.

The car got sold. But, for way less than what it was bought for, and without the $1200 of money I put into fixing it while with him.

I was with my ex in 2005-2006. I am not with him at the moment.

I have learned my lesson when it comes to buying people big things.

I appreciate all of this advice, but your advice is what I have been doing for the past 2 years to pay off the debt I did have.

I was hoping for advice on whether or not I should get a loan. A few of you said it would screw up my credit, and then another few said it would help. I did a lot of research last night, and talked to a few reliable sources, and all of them said as long as I pay my loan on time, pay off my debts with the loan, and then cancel all of my cc's (which I've already done).. my credit will improve. The ONLY downfall, is that it may take me longer to pay off. But, I will no longer have to deal with SUPER HIGH interest rates, and paying 5 different bills a month just for credit cards.

[SlickRick]

fake your death problem solved

Thanks for the help! Wow, this was the best advice so far! I shoulda thought of that..

well your asking advice from a bunch of guys who (for the most part) cant save enough money to get a beer, and are not old enough to buy one if the had the $$$ but u want advice on how to get u out of debt? I think u just want to complain about it more than anything. But if u do consolidate into a loan that goes on your credit to so does going to those credit counseling places.

[forkee]

as long as I pay my loan on time, pay off my debts with the loan, and then cancel all of my cc's (which I've already done).. my credit will improve. The ONLY downfall, is that it may take me longer to pay off. But, I will no longer have to deal with SUPER HIGH interest rates, and paying 5 different bills a month just for credit cards.

yup

consider yourself lucky. i was about 16k in debt when i first got my credit cards cuz it was so fun to spend haha. i had people hired from circuit city, best buy, american express, visa, and mastercard calling me for money, lol. it didnt help that they made the interest rate around 55%!!!!! i put it all together and with the help of my parents, took out one big loan and paid it off slowly by working my butt off at disney and verizon. took about 2 years and overall i think it cost me 21k after interest but thank god thats over. the whole fiasco killed my credit score but they are slowly beginning to trust me with their money (mwahahahaha)

now i have 27k that i owe for school......yay

good call on not going the bankrupt route. thats the LAST thing you want to do. plus 8k is nothing if you can keep it around that

msn has a new article out. maybe it'll help

http://articles.moneycentral.msn.com/Inves....aspx?GT1=33011

This post has been edited by forkee: Aug 19, 2008 - 12:39 PM

[D-Man]

The car got sold. But, for way less than what it was bought for, and without the $1200 of money I put into fixing it while with him.

I was with my ex in 2005-2006. I am not with him at the moment.

HOLY CRAP!!

In less than a year you'll buy your boyfriends a car and put $1200 into it? Will you go out with me?!?!

fake your death problem solved

Thanks for the help! Wow, this was the best advice so far! I shoulda thought of that..

well your asking advice from a bunch of guys who (for the most part) cant save enough money to get a beer, and are not old enough to buy one if the had the $$$ but u want advice on how to get u out of debt? I think u just want to complain about it more than anything. But if u do consolidate into a loan that goes on your credit to so does going to those credit counseling places.

I can too afford beer, and i am indeed old enough to drink it. Not everyone on this site recently became of age to drive Many people here are WELL past their teenage years.

This post has been edited by D-Man: Aug 19, 2008 - 12:35 PM

[SlickRick]

^ well u know what i mean i am just saying i dont thing this thread is gonna solve much.

[D-Man]

Right-Right. I gotcha.

But its not really complaining, when the OP states:

I am about $8k in debt. My credit score is a 600 , and my income is so crappy.. that I don't even want to post it.

I was in more debt, but I have paid a lot of it off.

Should I get a consolidated loan, and put all of my bills into one?

I asked someone, and they said they could only give me a credit line of $2200, or something.

I'm just so confused.. and I just want to not worry about making 5 payments a month.

Does anyone have experience in this kind of thing, and could help me out?

I'm going to go to the bank sometime this week and see what I can do, but I'd like a little advice beforehand.

I am STRESSED to the MAX.

[GriffGirl]

If you're eligible to get a personal loan through your bank in order to consolidate your bills, then yes, I'd do it if I were you. That would reduce your monthly payments and afford you to make over the minimum payment. I don't think it's likely that you will get a personal loan though; you have to have good credit to get a personal bank loan.

If you're looking into one of those consolidation loans from crap you see on TV, my answer would be no, don't do it. That WILL mess up your credit more, because those places will basically negotiate a charge-off on your behalf for your debts, so you can pay a lesser amount back. And yes, those places are basically only out for your money.

All the stuff I said about bankruptcy was stated to be informational as a course of last resort.

[saleeka]

If I were you I would NOT cancel any lines of credit you have once they are paid off- doing so will actually lower your credit score, regardless of reasoning as to why! Over time, slowly cancel lines of credit if you must, but you will preserve what's left of your score by just letting them sit at idle, so to speak. Also, even inquiring about any other additional loans/lines of credit will also cause your score to drop, FYI... The closer together the inquiries, the harder the hit will be. These little things don't sound like much, but when added up, they can really screw your score over if you already have poor credit...

[Jen]

I'm keep one credit card.. just to have it in case. It's the one.. that if I use it, it's paid off each month. But I only use it if I have to.