gwizgosh asked:
I was hoping to get a simple answer for the never ending problem of debt. My husband and I just got married, he has some student loans, and I have credit card debt. Interest rates on both of our debts are averaged around 25%, so obviously its eating us alive and we would like to get out from under that. We would like to pay it off quickly without killing ourselves to do so. Any helpful tips, suggestions?
I was hoping to get a simple answer for the never ending problem of debt. My husband and I just got married, he has some student loans, and I have credit card debt. Interest rates on both of our debts are averaged around 25%, so obviously its eating us alive and we would like to get out from under that. We would like to pay it off quickly without killing ourselves to do so. Any helpful tips, suggestions?
Call the credit card company and ask them to lower your rates right now.
There’s no easy way. You have to cut your expenses down to bare bottom nothing. Then pay off the loans as fast as possible starting with the smallest first. After the smaller ones are paid then put more money towards the next one and just keep going.
This method works for man, many people. There is a national radio show by a guy named “Dave Ramsey” that gives this advice. His callers call in about a year later and scream “We’re debt free!” Its hard work and you have to “Live like noone else so in the future you can live like noone else.”
Look up Dave Ramsey on the web and find some show clips and you’ll get the message. It may not be what you want to hear but its the truth.
if you’re driving a $20,000 car then sell it and get a $3000 car. Eat beans and rice and other low cost meals. Put aside a $300 emergency fund to prevent another financial crisis that can set you back. Write down every penny you spend. Spend only cash and don’t use debit or credit cards. The list goes on. If you do these things then you’ll be living like a king and queen within two years.
DO NOT call any debt negotiators. They are a rip off. You have to PAY them installments. More money, more debt. You can call and negotiate your own debt for free. I had an old debt from a credit card that was 4 years old. I negotiated a 40% payoff and they cleared the account. All honest debt advisors will tell you avoid the “reduce your debt for three easy payments” scams. You can do the same thing they do for free. They have no special powers with your creditors. Creditors will negotiate a lower settlement because when the debt is seriously dellinquent because they fear losing all of it. So YES, a debt negotiator can reduce your debt. But you can too without paying lump sums to someone else. One thing to remember is always get it in writing from your creditor before you make a negotiated payment and NEVER ever give them your personal bank information. They will drain it. Negotiate a settlement and get it in writing. They’ll even take it off your credit report in order to get the payment from you.
1-800- 9365348 Trinity debt negotiators are advertised on the christian talk show, I already called for more info. After you pay their program fee (in installments) they negotiate with your creditors for a lower settlement on your acct. Thing is you have to pay to play. You end up paying lesser in the long run; so that would be a way to go.
I just turned 19 and I have about seven grand in consumer debt…well…I HAD about seven grand in consumer debt.
This is what I did..
Took a semester off.. and got a second job.
Learned to pay myself….when I got my pay cheque I automatically put two hundred dollars into a savings account.
Set aside money for my car, rent and insurance.
Put one hundred dollars cash into my wallet. This would be the only money I had for food, clothes, entertainment etc…until my next cheque.
The rest went to dept repayment. I paid off my high interest credit cards, and switched to a lower interest credit card. I went from paying 22% to 11% on interest.
Slowly but surely I’m getting out of the hole… =)
One sure way is to cut all your credit cards into half, divide the total by 10 and start paying that amount. Stop applying for any new card until you have paid them all. As for other loans, you’ll have to down size. For example I use to drive a new BMW525i, now I drive a 10 years 728i. This way I am happier financially, Never adapt the “Keeping up with Jones” attitude.
I somewhat agree with Jeff, but not totally. Cut back where ever you can in your budget and put your extra money towards paying off the account with the highest interest first while making minimum payments on all of the others. After you get that one paid off, you put the money you were paying on card #1 (the minimum payment and the extra payment) towards card #2. That will pay card #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly.
To start :
Card #1 (highest interest): minimum payment+ extra payment
Card #2 (middle interest): minimum payment
Card #3(lowest interest): minimum payment
Card #1: paid off
Card #2: minimum payment from Card #1+ Minimum payment from Card #2 +extra payment
Card #3: minimum payment
Card #1: paid off
Card #2: paid off
Card #3:Mimimum payment from card #1+ minimum payment from Card #2+ minimum payment from Card #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest.
Seriously consider getting a part time job, temporarily until you get out from under this debt. It will be worth it to get out from under faster.
As far as cutting costs, use coupons, buy your groceries at a grocery outlet or dented can store. Give up the cable and just use the regular TV, give up the bottled water, the Starbucks, the dinners out, etc. I know it isn’t fun but when my husband and I were both out of work at the same time for an extended period (over 1 year), we pared down to the bone, got by on 20% of our old income, and did NOT go into debt doing it. It wasn’t easy, it was darn hard sometimes but our situation, like yours, was temporary.
The simple answer is to increase income and/or reduce expenses. You can’t do much about student loans but should be at a decent interest rate. It’s your credit cards that is the problem. Make a plan and stick to it. Get to the library and check out books by Dave Ramsey… he’s got a no nonsense approach to your situation and will be the first to admit that it won’t be easy but will be important. His motto is to live like noone else so that later you can live like noone else. Check out his TV show on FOX BUSINESS on weeknights or ask a friend to tape it for you.
Hi,
I use the following site
It is full of tips advice and resources you can use. It may save you some money rather than going to a financial advisor.
Thanks
Here are your options!
Do nothing!
This is actually one of the option alot of people try doing and finally put themself into deeper problem. You will eventually start getting calls from collection agencies and they will offer you settlement of around 50 to 70% meaning you will have to pay around 60% back in 1 payment which is not easy…
Debt Consolidation
Debt consolidation loan will help you to consolidation all your debts into 1 and you will start making 1 payment every month and they will start paying your creditor. This is something which will lower your interest rate but you need to understand debt consolidation will not do anything good to the principle amount.
Bankruptcy
Filing for a bankruptcy is another option but i am sure you understand you don’t want this because this will stay on your credit report forever. This takes control out of your hands for more than 7 years and you still make monthly payments, so lets forget about this for now
CCCS – Credit counseling program
CCC organizations are usually designated as non-profits by the IRS, although many of these firms recently lost that status because the IRS felt that had “for profit” motives. These organizations combine your payments to one monthly payment, where you pay back all of the principal, some interest and some fees. Many CCC organizations receive funding from creditors as well as payment from their clients.
Many times these programs are generally drawn out over four to six years and less than one out of four actually complete the program. Many times these payments are higher than the original credit card payments and this program can have a non flattering affect on your credit.
So here is what you need!
Debt Settlement
Debt settlement or debt arbitration is a legal process used by both people in debt and their creditors to negotiate a settlement of an existing legal debt. This proactive approach is the most cost-effective option to pay off your current debt while avoiding the negative effects of bankruptcy. Any person owing credit card debt, or any other debt, has the legal right to contact and negotiate with the creditors. This practice however, takes time to master and certain skills to get the maximum benefits. The Debt Settlement Company works diligently and professionally with your creditors on your behalf to reduce your current unsecured debt balances down 40-60% by arbitrating an agreed settlement amount with your creditors.
Me & wife were in the same problem around a year back and we went with this debt settlement company. They reduced our debts down to 48% and obviously that was a big Relief… I like talking good about this company! Debt Care USA 866-534-0754
Hi,
I used “Credit Solution” to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It’s legitimate.I came across this company on NBC News Special Edition.Check it out here:
Yes because of the high interest rate incurred.
I have articles on Free Your Debts, Ways to avoid bankruptcy. Get advice from Debt consolidation or Debt settlement. Will it affect my Credit Score / FICO Score? More Information on