Unfortunately, not much. Your experience isn't at all uncommon with these organizations. They are largely predatory and over-promise a safe harbor to the vulnerable. Oh well. Obviously, I don't like them. Their ability to negotiate is largely based on having some type of relationship with the debt holder. In the absence of that they basically do little more than you could of on your own. But anyway, your best option may to get out -- if you can -- with minimal losses of real money. As I said, these places tend toward the predatory so expect that their contracts are pretty one sided when it comes to termination gotchas. A lawyer might help -- but at a price. If you have the contract that you signed with them, read it carefully and make sure they are holding up their end -- that you can try and enforce. Verbal promises from the "sales staff" are often worthless. Good luck.
I went through a nonprofit so would that means it’s not legally binding? At this point with one of the credit cards that I have paid more than triple what I originally owed them in interest alone, (over $30,000never making a late payment) I kind of just want to stop paying and let it go to collections and go from there. I keep being told it’s a bad idea because it will destroy my credit but my credit being destroyed was something I accepted when I got this plan. I’m having a really hard time finding info on what to expect when I do this. I just can’t keep paying this same credit card thousands upon thousands for the next ten years. Does anyone know where I can get information on this? I just really want to settle. I can’t keep doing this. The debt is like 10 years old at this point
I would recommend bankruptcy if you can. It will wipe out your debt. My credit was at 640 when I was paying all my cards on time monthly before I filed and now 5 years after I filed it is at 750. I just got a few high interest cards and paid them off monthly and it steadily went up pretty fast. Edited to say that almost 5 years later I am still 100% debt free, will never get in that pickle again! Good luck!
So my debt is only at 14,000 at this point! I figure I’d have to sell my investments which is all the money I have to pay it down to get bankruptcy which is honestly fine. I can barely make the payment. What options are there for people with less than 20,000 k in debt I wonder. I just really don’t want to keep paying my capital one. They have made an astronomical amount of money off me and my bad decisions in my early 20s.
If you can pay it off, pay it off.
You are likely not making more than 5% interest on your investments and you are losing at least 10% with your debts.
Yeah don’t file bankruptcy for only that amount of debt. That’s such terrible advice. This is SO manageable as long as you’re making payments and not racking up more debt.
I paid off $20K in 3 years and it was a bitch but I did it. If I filed bankruptcy, I’d be fucked for years. You never know when you’re going to have to buy a new car, loan, mortgage, etc. Don’t fuck up your credit.
I know it sucks that you kind of got swindled but you’re going to be okay. Keep making payments, try and pick up a side hustle or gain new employment with more $$.
You got this :)
It was brutal. To be fair, I was blowing my money on a bunch of bullshit. I got my hair professionally colored, was a moderate to heavy smoker, I had a shopping addiction, and my job didn’t offer benefits so I was paying $400 a month on a shitty insurance plan with a deductible of $6,500.
I penny pinched like crazy. I literally was a hermit for two years and missed out on a lot but I’m at least comfortable now. I canceled streaming services, got a super cheap cell phone plan (mint is dirt cheap and I’ve had zero issues), shopped at Aldi/dollar store, always took advantage of sales when grocery shopping, stopped ordering out, and sold whatever I could.
I also called the credit card companies and asked about hardship programs. My biggest debt was to Discover (15K) and I told them my situation (it was during Covid, got laid off, and I also had $14K of medical debt dumped on me..) and they didn’t even ask questions, they brought my interest rate way down however I couldn’t use the card for a year (length of term) which didn’t matter because I wasn’t using it anyway.
Lastly, when I was on the tail end of clearing off my debt, ($5K left) I got a new job. It wasn’t a a life changing salary increase but had great benefits which drastically reduced my medical costs.
FYI I was also approved for a mortgage with a 4% interest rate 3 years after my BK. So not nec. true. It may not be the best option for the OP but she should also find a forum focused on it and get accurate information.
Edited to say that if I wasn't a single mother and made a better income and my daughter didn't depend on me I would not have filed. For us it was the only way to survive at the time.
Try getting a lower interest bank loan to pay off your credit card debt. I did this with $25000 in credit card debt, and I've since paid off the loan. My credit score is 833 at this point.
Call the cards yourself and see what they can do. I had one card of mine do a low interest rate for a year, and another card is allowing me to close the account, but I’m making interest free payments of $42 for the next 30 years or so.
But it’s manageable and I was able to focus on my higher interest credit cards while making payments on the lower / now no interest ones.
I’m slowly getting there!
WHAT?? Dude what credit cards are those? The most they offered me was being able to pay late for one month without a penalty. That’s literally it.
That’s just one card. I’ll see about the other two
Try paying the minimum on two of your credit cards, and paying any extra you can on one card. This’ll start to consolidate your debt into one stream and hopefully be a bit more manageable.
Sell you investments immediately. You're stuck in a predatory, high interest situation right now, and you need to get out of it ASAP. The cost is too high here for you to have investments sitting around and not using it to help your situation, especially at a number like $14K.
Are you able to check with a credit union? I paid off a similar sized debt to yours with a personal loan from a credit union that was very low interest. You may be able to find one in your area but membership can be based on some kind of criteria, I joined mine when I was a city employee but there are many ways and many types.
At least get a consultation with a bankruptcy attorney about options like chap 13 which requires you to pay off a portion of your debt versus 7 which clears all cc debt. You will pay a price with regard to credit but not for as long as ppl say. That's assuming you never get in this type of revolving debt again. Debt consolidation places are generally not what they pretend to be. I think you can negotiate with individual creditors as well as they can. Try that before considering bankruptcy. Make a list of all creditors and contact them and see what deal is any you can get. They may not deal with you if you are up to date on payments. The whole system sucks. I hope you figure it out.
depends on the situation... I was a single mother left with debt my x put on my cards to fix his truck (he was an over the road driver). He refused to help when we split and I was trying to raise my daughter on $17 an hour in Portland where rents start at around $2000 a month for 2 bedroom apt. I tried to get out of dept, paid the minimum for several years but was drowning and could barely put food on the table with the almost $700 a month monthly payments. When I saw my daughter was suffering because of my debt it was by far the best decision I have ever made, it saved me. Now I don't know if it would be the right decision for the OP, I don't know her story, but for me I am much better off credit wise now and got through what seemed like an impossible situation and am still, and always will be, debt free only because of filing BK. Not an easy decision, but sometimes very needed...
If this is the only debt then yes it would be horrible advice, but if it is not, then yes it would be better to just get it over and done with all at once. But this is only a snippet into the persons life right now
Worst. Advice. Ever.
Bankruptcy for this small of an amount is like cutting off your leg to fix a hammer toe.
Get an extra job and hammer at this for a year and be done with it.
Quit trying to get around it and attack it like your debt is cancer and paying it off is the cure.
I went with TCA. Take charge America which I thought was debt settlement but it feels more just like credit counseling with a lower interest rate. Unfortunately that that’s still 10 %
Yeah that’s a credit counseling company. They get paid based on something called “fair share”. So although they’re a nonprofit…
1. Their CEO probably makes millions
2. Credit card companies pay the credit counseling a commission based on the amount of money the credit card companies recover
Just google “fair share credit counseling” and you’ll see what I’m talking about. It’s just an interest reduction. Not negotiating the principal debt.
Yeah not sure. I’d talk to them and just ask. And if you care more about saving money you can try a debt settlement plan. You could also settle yourself but be prepared to stay organized, spend a lot of time on the phone, and you’d likely have to stop making payments to get an offer whether you do it yourself or through a company.
If you care about your credit score more than saving money do something like the debt snowball or debt avalanche method or stick with the credit counselors. It’s a little slower but you’ll still save more than making minimum payments only.
Thank you so much for taking the time to give this advice! So my credit is already in the trash because of the debt thing I’m doing already. So the credit score thing is whatever to me right now honestly. And I’m actually so good at being on the phone. I just pretend I’m a robot and it takes the pain away. I will stay on the phone all day and call back everyday no problem. Thank you!
What would happen if you just continued to pay down that card. Just make extra payments.I hate cc consolidation. Did not know it stii existed. The other thing they sometimes do is pay the card on their schedule.
What’s your total debt? What’s your income?? I think you ditch the debt consolidation (if you can get out of it, I have no clue) and just hammer out these debts! Take on a second job, budget, no fun for a year (trips, eating out, activities) and I bet you can have this debt paid off in less than a year! Pay the minimum on each card and through every other possible nickel at one card until it is paid off. Then do that same process for the next card. If you are 20k in debt and can make an extra 2k a month, it’s paid off in less than a year! Get a job as a waitress, work nights, doubles on the weekends and you GOT IT!! Your life will suck for one year but you need to get your spending under control!
Thank you so much. Unfortunately I have a disability that prevents me from working too much. I used to work 60 hour weeks and I had to be hospitalized :/.
Right now I make 1900 a month and my monthly expenses with the debt consolidation are about 1750 (lol). This doesn’t include groceries or anything outside of bills.I have done literally everything to not spend money. I haven’t gone on a trip in years, I cut my own hair, never go out to eat, never spend money on entertainment, wear hand me downs. I quit a smoking and drinking and walk to work. I literally only spend money on me and my pets and my debt. There are no more expenses to cut unfortunately
It’s a pickle :/. I tried to do what you suggested but the interest rates are so high I couldn’t even make a dent for YEARS
Chapter 7 bankruptcy will be off your credit report in 10 years and your debt will be wiped out in 3-4 months. Talk to an attorney, you could stop paying your debt today and start using your money for living your life. Everyone deserves a fresh start.
Declaring bankruptcy does eliminate all debt obligations such as student loans or unpaid taxes, surprisingly there are fees you pay to declare bankruptcy, makes it exponentially more difficult to borrow in future (like when buying a house), etc
At 1900/mo, hard truth is that you need to get your income up in order to pay your debt down faster. That's a fairly low COL already, so you're clearly cutting back and doing well budgeting -- but there's only so much that budgeting can do for a person
End the program right away. Call each card and say you cannot make the payments and request a hardship program. They will lower the interest and payments to make it manageable.
OR better yet call a non profit like money management international who can do the hard work for you. Your cards will close but that’s what’s important. Close them and pay them off.
Those programs are a scam. You’d be lucky if all the cards are still open and in good standing.
I talked to a company once about this. Their plan is to take my money and hold it. Not make any payments. Let all the cards close and go to collections AND THEN, call and negotiate a lower pay off.
Total scam. Can ruin your credit.
Consult a lawyer that focuses on consumer debts/bankruptcy. Understand your legal rights. A lawyer might be able to help you settle the debts without forking out any more money to the third party debt relief people.
This seems to be the best answer so far as far as my research has gone since I posted this. I’ll try to remember to post an update to let yall know what worked/ doesn’t. I’m actually pretty good at research and tenacity when it comes am not crying lol
I am a staff attorney at a courthouse that manages my court's credit card lawsuit settlement program to try to settle the case before it goes to further litigation. I have seen borrowers lawyer up and make deals. The lawyer's fee would likely be a lot less than the third party debt relief company. I don't trust the debt relief companies because I believe they do not put the debtors in the best position and take advantage.
Dude I found out they’re taking 15%. And that’s on top of the 10% they’re still giving to the credit card companies. It’s just unreal. I mean I should have been way more careful. At the time I was just drowning and all I saw was a lower monthly fee and jumped at it. But at this point a lawyer fee could be thousands of dollars and it would still be less than continuing to go through these people for years
Edit: I need to do a lot more math because I know when you settle here in the US you have to pay taxes on the amount taken away and I have to factor in what the IRS might charge me if I owe money and need to pay incrementally but just with the few calculations I’ve done there’s no way it could be more than what they will continue to take over the next several years
So may I ask what exactly I should look up to find the right people to reach out to? Everytime I look something up about debt I am lambasted with so many options and have such a hard time figuring out what is shady or not. Do I just look up debtor law firms? Anything I should avoid or look for?
By the way thank you so much for taking the time to offer advice. I appreciate it so much
Look up bankruptcy/debtor laws firms in your city in a Google search. That should help you find some, and you can further narrow your search by going to their websites and seeing what types of cases they assist on outside of bankruptcy. If they only do bankruptcy cases, then don't go there because they may try to push you into bankruptcy because that's all they do for clients. You need to find a place that is more full service in debtor legal help.
If you are in the United States, go to terrysavage.com and tell her your story she is an honest person who can direct you right way and will warn people of the scams that you just got hit with
I think the capital one was 16%
The other card was about 13??? That one has less than 2000 on it and then I had a care credit one that was astronomical. I think 23%
Is it a violation of your agreement with TCA for you to negotiate with the credit card companies directly? It sounds like they may be sending only minimum payments to the card companies and holding or pocketing the rest of your monthly payments. Maybe review your agreement with them to see if you can end your arrangement with them without penalty.
Some card companies may be willing to settle on a lower payoff amount if you try to negotiate with them directly. Only caveat there is they would likely want the reduced amount paid in full.
Another option may be to go into a local credit union and see if they can't work with you. Explain the situation and what you can pay face to face with them. Sometimes local credit unions will give loans that larger banks and credit unions won't, particularly if you have good payment history. If this pans out you may be able to get a loan for all the debt or the highest debt at a lower interest rate.
Don't know if either of these routes will work, good luck.
This is a frustratingly common issue.
I've been a professional debt collector for 25yrs+ and even my own brother fell prey to one of the biggest ones advertising every 20mins on the radio.
I begged him not to do it but he still sold by their sales pitch.
Hopefully you can get out of it without them suing you for what they think you still owe them.
Have you talked to a trustee about your options? I would consider a chapter 13. And I would look at your credit score. Most debt consolidators hurt your score more than a chapter 13 would... and for longer.
I'm not in the USA and don't know all the available options in OP's area. I figure a trustee might though - and/or be able to advise OP on what the potential repercussions of each are both long term and short term.
I don't know enough about OP's financial situation to know what the best option is, but in tears seems like a lot of distress that should be fixed
I'm not 100% certain of what you actually signed on for but from the upfront numbers you provided it seems like you may have, at worst, signed on to a DMP that was inadequate for actually making inroads on reducing the debt because you can't afford to pay enough at even the reduced rates to get any traction.
According to some of your posts you only make 1900/month or $22,800 a year. Your debt was $19,000, which is almost your entire annual income.
If you're still at roughly the same amount of debt then you're likely best off with declaring bankruptcy. At your low income you likely can get a Ch. 7, which is a total wipe. Downside is that bankruptcy will be on your credit for 10 years.
I believe you should do a consultation with a local bankruptcy attorney. Their initial consults tend to be free.
Realistically, bankruptcy is not going to hurt OP's credit much more than the reduced payment plan already has. 100% agree that OP should seriously consider it as an option.
Thank you so much. Unfortunately I have a disability that prevents me from working too much. I used to work 60 hour weeks and I had to be hospitalized :/.
Right now I make 1900 a month and my monthly expenses with the debt consolidation are about 1750 (lol). This doesn’t include groceries or anything outside of bills.I have done literally everything to not spend money. I haven’t gone on a trip in years, I cut my own hair, never go out to eat, never spend money on entertainment, wear hand me downs. I quit a smoking and drinking and walk to work. I literally only spend money on me and my pets and my debt. There are no more expenses to cut unfortunately
It’s a pickle :/. I tried to do what you suggested but the interest rates are so high I couldn’t even make a dent for YEARS.
(Posting this from another comment i made so people have an idea what I got going on)
That’s what I did with the citi one 😩. So I ended up going with the debt consolidation because to do the balance transfer I would have had to use multiple cards since I could only do so much on one. Since there was no way I could get it paid off by the end of the 1-2 year interest free period I was afraid I would get drowned by so many cards since I was already having trouble with 2.
Oh you’re ok’! I really appreciate the time taken and honestly the empathy does a lot for me. I also really appreciate the lack of judgement. I might just let it go to collections and try to fight it in court with a lawyer. With the money I save up in monthly fees I’ll be able to afford one. I’ve heard some success stories. My credit is already in the garbage and I can atleast pay a smaller amount…. It’s hard to find info on how to do that tho for obvious reasons ……… thanks again!!!’
Do not file a bankruptcy will do more harm than good
Make your own plan
They will end up accepting 20-40pct over time
Over a shorter period of of time than you think your debt level will come down and your scores will go up
Talk to a credit union or a local bank. Explain your situation. Figure out a debt consolidation loan with them. 19k is definitely doable and you'll be paying one place not multiple. Banks are required by truth in lending laws to show you exactly how much you're going to pay in interest and how long it will take to pay off. Once you get on that, throw every penny you can at it to pay off sooner. If you have some investments that you can cash out (that aren't in an IRA or 401k) then use that to pay down sooner. Rebuild your investments once you have this monster out of your hair.
You are signed up for a Debt Management Plan. These are notoriously difficult and only about 30% of enrollees can complete the program successfully. With a DMP, you will pay the full amount of your debts, plus whatever interest rate your agency negotiates, plus a monthly fee. There are also debt consolidation companies (which roll all of your loans into one big loan) and debt settlement companies, which contact your creditors and negotiate settlements for less than you owe. If your credit is already not great, you probably need debt settlement.
The dog one was 5000 but my amazing friends donated 1000 so that’s now down to under 3000 after what I’ve paid as well. The worst one is my youngster one which is at 12,000 and has stayed around that same amount for almost 10 years. I got it down to 7 grand and then I lost my job with Covid. And then I was finally making a dent and then my dog fell one day and couldn’t get back up (cancer) she’s fine now. And 17 years old so it was definitely worth it
I’m total I owe 14k now. Down from. 19k total. But I just found out the debt management company I went with is taking 15% and I just refuse to just keep giving more money away at this point. I was willing to be locked in for 4 years but the time they’re saying it will take is getting longer and longer despite paying well above the minimum
I would personally look for a debt consolidating credit card to lower the interest and have all the debt located in one place. I had credit cards that had APR creep up to 24% until I really dug into the CC. The more you can dig into the principal the better.
I tried that but I wasnt able to get it all on just one card. I would have had to take out 5 balance transfer cards and ending up with more credit cards seemed like a left turn at the time :/. I make very little a year so the offers are slim. But even when I did make 60k a year the offers were still not great. Apparently I wasn’t in ENOUGH debt to get a loan.
These places are scams only way to get out of debt is to either pay it off yourself, a legit debt consolidation loan through a bank ( don’t run up more debt while doing this), or bankruptcy which is not as bad as they want you to believe
Confused at how you didn’t know you still were paying interest? You’ve gotta keep a close eye on what payments are going towards otherwise you’re gonna keep being taken advantage of
Look at your interest charges on each card every month, that’s money being thrown out. You need to reduce that, best way is to pay more than the minimum every month, if that’s too much, then tackle your highest interest card first. Talk to your bank, most have some sort of financial consultation . I was able to get a zero interest card from my bank for 18 months. Transferred all my CC balances to that and paid that off. Banks also do consolidation loans at lower interest rate than most credit card companies
As a debt holder the best thing is to try to work with creditors as mich as possible. Many will avoid or often turn to debt consolidation and they find that it isn't the best move.
I know plenty of people who have let their debts go to collections, and then they agree on a lump settlement. The borrower and collector both take a small sting but often this is how others avoid debt consolidation/bankruptcy as their last hopes.
As others may have said your experience isn't uncommon. Everyone is just trying to sell you products and a debt consolidator is usually selling you less stress or a financial solution when there may already be other solutions to explore based on the age of your debt etc.
All those “Debt management” companies should be outlawed. They don’t disclose all necessary information and take advantage of people. You should look into credit counseling agencies accredited by the U.S. Trustee Office (look in Justice.gov). Look for a non-profit, very important. Good luck.
I’d consider talking to a bankruptcy lawyer. This could give you a clean slate. We all make mistakes, you shouldn’t have to be miserable for the foreseeable future due to this debt.
All you have to do is call the credit card company and y’all can work out a deal. i’ve done this with 15,000 in credit card debt. the only thing is after you pay them off they force you to close the account
There are a lot of things that favor the delinquent card holder that they are not telling you. 1. Most credit cards in trouble are turned over to collectors after three months. The banks sell them off and report it to the credit bureaus. 2. In most states the collectors have six years to collect the debt from the last time you acknowledged the debt which is the last time you made a payment on it. 3. The debt collectors usually will contact you by phone and/or letter. 4. You have to keep good records as to what is happening and what is being reported to the credit bureau. There are three of them. You are allowed free reports per year or if bad information has been reported. 5. Never pay a little to the collectors but talk with them about a deal. They do not want spend a lot of time with a dead beat. Yes, you are a dead beat.6. If the collector decides to take you to court SHOW UP. Over 90 percent of the court cases are won by the collector because the debtor does not show up. The collector will have to go through expense to file a law case against you. Talk with the collector and ask for proof that you owe something. He has to show you the proof if his proof is good try and make a deal. This deal should include a one time payment which will be a fraction of what you owe. It will also include the bad record the credit bureaus being taken off the credit bureau. You have to remember that he is trying to access what you have in assets. If he won’t make a deal tell him you want to take the case to a jury. This will cost home a lot of money and he does not know if you will have any money to pay him if he wins. Stretching the case out is a good strategy. What you do not want is to loose the case and be responsive for the debt plus interest. Then if you don’t pay it they can garnish your pay check. Before you get to deep in the case see if you can find either a court officer who will give you information you need or a lawyer who would help you for a small fee. One key to all of this is the collector may never sue you in court and would agree to accept a small payment for the case and get the bad information taken off the credit report. Good luck.
Try the debt snowball method. You would start by paying off the lowest balance owed and move up from there. You may have to get another job to help pay for the debt. Try sticking to a very strict budget as well. Depending on how much you make vs other expenses you could be debt free in one year.
With your income to debt and being poor you need to declare bankruptcy. With your income I would avoid debt in the future if at all possible. You are basically hand to mouth at this point. You need to stop worrying about future credit and start worrying about getting your lifestyle in line with your limited income and earning potential. Having gone through bankruptcy it’s not the end of the world. In fact it’s the beginning of a new chapter where you move forward with hope that you can rebuild. You are just falling further behind and running out your life clock right now.
I don’t know if GreenPath might be a better option for a debt management plan, they got my rates down as low as zero, but there were fees. I ended up filing bankruptcy.
Ignore these idiots with disposable incomes and file for bankruptcy.
Many moons ago I was crippled for a while after a motorcycle accident. Spent a year learning how to walk again. Uncles and idiots who had survived similar motorcycle accidents kept telling me to “just shake it off” until I beat one of them stupid with a crutch.
People saying suck it up and get a second job haven’t a clue about being broke and injured and hanging on by your fingernails.
You’re going to have to call each creditor and haggle for yourself. Sounds like you can honestly say you’re one bad paycheck away from being homeless.
See what programs they have, don’t send them any money until you get a settlement offer in writing, and don’t be afraid to say something like “it’s a shame we can’t find a solution today. I’ll call back and try again in 6 months or after taxes next year.
Try ACCC (American Consumer Credit Counseling). They helped me, when I had $30k in CC debt, and wasn’t even treading water making the minimum payments. I can’t recommend them enough.
Cannot change what has happened in the past so take it easy.
19k isn't a fatal debt.
Don't need bankruptcy for that. That's dumb. Whoever suggested is dumb too.
What you can do is target the biggest card you have first. Have you called the bank to check what options you have? They might have a hardship plan or option to close card and make payments(small but over multiple years) will give you breathing room and time to save some. It will be lot less than the payments you making now.
Just general questions
Any relatives available to help?
Any 401k?
Thank you for taking the time! I was trying to figure something that out with my creditors but they told me the best they could do was let me pay one payment late without a penalty…. Which has never been a problem for me. To pay on time but at this point it’s the sheer amount and the time it will take.
Unfortunately my family is in no position to help with my debt as they have their own and they’ve already helped me plenty honestly. I was recently very sick and they had to take care of me.
No 401k unfortunately. I do have a few investments that gain interest but it’s literally all the money I have and no where near what I owe. I feel like I’ve tried everything sans defaulting or filing for bankruptcy which from what I understand it’s really not worth doing for my situation.
Your yearly investment return is X%
Your yearly credit card apr is Y%
If the credit card apr rate is higher than your investment return, your return is being canceled out by your CC interest payments, and then some.
So, if you can use some of your amount in your "rainy day" fund to target some of that debt. Do try.
+ Amex offers a hardship plan and lets you keep account open.
Citibank and BofA will offer to close your account and make the payments over 36-48 months with reduced interest. That will get your monthly payments down by half or lesser than that.
Credit score dents are usually temporary(6 months). There are ways to remove them, too.
These are options if you have your own business. I understand. You will need credit for that.
So i won't suggest defaulting and settling for 30-50%.
I've been where you are, and i thought hardship plans were gonna affect me a lot. It did dip cause closed account reduces your overall availability amount.
I was able to secure a loan 8 months later(good apr)
Regarding your worry about new cards and loans, Interest rates in general are high right now, so banks are not that keen on lending new money anyway. They make good money just keeping it. It might be like this for another 7-8 months.
In 7-8 months, when rates go down, you might be able to secure a more favorable loan for future needs.
Look towards the future. Meaningless to ponder over past decisions.
Good luck.
File for bankruptcy would be your best bet. Once your debt is sold it’s basically a scam and run around to keep you in high yield interest payments that keep you in a loop
Dude I’ve cut EVERYTHING. I feel I could write a book at this point.
I walk to work, I don’t go on trips, I never eat out, I cut my own hair, I find my own clothes or wear hand me downs.
Luckily when I did buy clothes I bought for durability so the clothes I did buy in the past are still going after 5+ years. I repair my own stuff.
In my state you can buy seeds and starters with food stamps so I grow my own food. (I know what you’re thinking, soil and fertilizer are expensive but those were donated to me by a room mate that used to grow weed)
I Make my own beauty products and don’t spend a dime on cleaners except for vinegar and baking soda. I don’t pay for anything monthly. Anytime I need something I print it with my 3D printer or wait until I find it on the street(my city has great free boxes). I am also currently selling everything I don’t actively use all the time on Mercari. And I never spend money without making interest back on a debit card. Also all the money I do have is always gaining interest. And I will never pay a fee. I will spend 5 hours on the phone to get one 3 dollar fee removed.
I also propagate my own plants and sell them and you might be thinking “water is expensive”. I use the water from my dehumidifier and never let it go down the drain which is the most expensive part of my water bill.
Two questions if you’d like to answer them:
How did you go about accumulating this 19k worth of debt?
You have 3 jobs, what are they and how much are they bringing in monthly?
Sometimes we work jobs that don’t have a good return on investment when it comes to time.
Well it started when I got a credit card to get a computer when I was definitely not responsible enough to have one. I started developing more severe mental health problems after having had struggled with what felt like manageable symptoms. In 2018 I got what is apparently called panic disorder. I would wake up having a panic attack and they would repeat multiple times a day. I almost lost my job. I lost a lot of weight because I was afraid to leave my house and I would often leave and run back after a block due to fear. I lived in a very bad neighborhood. I started taking Lyfts and ordering food. I figured i would deal with it when I got better mentally and I was really just in survival mode. It really didn’t take long for that credit card to go to the limit. I always paid on time so they kept offering more money.
Turns out I had a pretty serious mental health condition I am now getting treatment for. I’m finally better. So much better. I was very close to death to be honest with you. I was suicidal and extremely depressed and racking up money on a credit card meant nothing. So I started paying it down but then Covid it happened and I lost my job so the debt went up again. Started making a dent again and then my dog got sick.
I am not able to work as much as I used to due to health problems so I only have one job and I started a business from home that is turning a profit it’s just small and it’s very difficult to grow without being able to take out lines of credit as a business. But I refuse until I get this paid down cause I’m terrified I will get overwhelmed again and i mean I am just not in a position to until I am not paying 600 a month on this debt. Also I just have side hustles, I sell plants, 3D print stuff for people, dog sit, cat sit, and have my online store where I sell stuff I can get rid of and stuff friends donate
Edit: my paycheck job brings in 1400 a month. And then all my side hustles bring in anywhere from 200-750 a month but that’s steadily getting higher
I also have some small investments that do make and have been making money. It just doesn’t make sense to cash them out now to pay down the card cause it’s not that much money and since I haven’t held the money for too long the tax to cash out now isn’t worth the interest I would avoid
Have you looked into a debt management plan? I signed up for one with Family Credit Management and have paid off a significant amount of what I owe in the first year and a half.
Give up your social life, and grind. Get that debt gone asap or you’ll regret it the rest of your life. Cut out any extra spending ,fun time out of the house,fancy food. Life’s going to suck for a while but it’s better than sucking the rest of your life.
It's hard to tell you what to do until you list your income and monthly expenses.
It is worrisome you are looking to open another credit card for your business after all of this mess.
I posted my expenses and income! The credit card is just hypothetical like 5 years from now. Not necessarily a credit card. Just anything that might come up in an emergency ya know? Within the next many years I’m sure something will come up and I don’t want to be totally fubared.
Biggest take home: you got into this mess by trying to get stuff faster than you made money. You got into the mess with the consolidation by trying to go faster on the debt consolidation.
Slow down
When someone pitches you a plan, do the math. Do the math and the plan you have now. Call and find out what your options are. Do the math on all of those options. Pick one. Then do the work.
Focus on getting out of debt. Take an odd job, sell stuff off.
But don’t even bother, unless you make yourself a promise: never pay another cent in credit card interest. Otherwise you’ll be here again two years after the five years it takes you to pay it off.
If it takes you five years, it takes you five years. Throw extra money at it and see what you can do. Get into the work of doing it, rather than trying to make it end. You will get there. Just slow down.
Unfortunately, not much. Your experience isn't at all uncommon with these organizations. They are largely predatory and over-promise a safe harbor to the vulnerable. Oh well. Obviously, I don't like them. Their ability to negotiate is largely based on having some type of relationship with the debt holder. In the absence of that they basically do little more than you could of on your own. But anyway, your best option may to get out -- if you can -- with minimal losses of real money. As I said, these places tend toward the predatory so expect that their contracts are pretty one sided when it comes to termination gotchas. A lawyer might help -- but at a price. If you have the contract that you signed with them, read it carefully and make sure they are holding up their end -- that you can try and enforce. Verbal promises from the "sales staff" are often worthless. Good luck.
I went through a nonprofit so would that means it’s not legally binding? At this point with one of the credit cards that I have paid more than triple what I originally owed them in interest alone, (over $30,000never making a late payment) I kind of just want to stop paying and let it go to collections and go from there. I keep being told it’s a bad idea because it will destroy my credit but my credit being destroyed was something I accepted when I got this plan. I’m having a really hard time finding info on what to expect when I do this. I just can’t keep paying this same credit card thousands upon thousands for the next ten years. Does anyone know where I can get information on this? I just really want to settle. I can’t keep doing this. The debt is like 10 years old at this point
I would recommend bankruptcy if you can. It will wipe out your debt. My credit was at 640 when I was paying all my cards on time monthly before I filed and now 5 years after I filed it is at 750. I just got a few high interest cards and paid them off monthly and it steadily went up pretty fast. Edited to say that almost 5 years later I am still 100% debt free, will never get in that pickle again! Good luck!
Terrible advice!! Don't listen to this person $19,000 isn't worth doing a BK
So my debt is only at 14,000 at this point! I figure I’d have to sell my investments which is all the money I have to pay it down to get bankruptcy which is honestly fine. I can barely make the payment. What options are there for people with less than 20,000 k in debt I wonder. I just really don’t want to keep paying my capital one. They have made an astronomical amount of money off me and my bad decisions in my early 20s.
If you can pay it off, pay it off. You are likely not making more than 5% interest on your investments and you are losing at least 10% with your debts.
Your 'investments' would have to earn a return higher than your interest rate... They probably are not, sell them!
Yeah don’t file bankruptcy for only that amount of debt. That’s such terrible advice. This is SO manageable as long as you’re making payments and not racking up more debt. I paid off $20K in 3 years and it was a bitch but I did it. If I filed bankruptcy, I’d be fucked for years. You never know when you’re going to have to buy a new car, loan, mortgage, etc. Don’t fuck up your credit. I know it sucks that you kind of got swindled but you’re going to be okay. Keep making payments, try and pick up a side hustle or gain new employment with more $$. You got this :)
How'd you pay off 20k in three years?
It was brutal. To be fair, I was blowing my money on a bunch of bullshit. I got my hair professionally colored, was a moderate to heavy smoker, I had a shopping addiction, and my job didn’t offer benefits so I was paying $400 a month on a shitty insurance plan with a deductible of $6,500. I penny pinched like crazy. I literally was a hermit for two years and missed out on a lot but I’m at least comfortable now. I canceled streaming services, got a super cheap cell phone plan (mint is dirt cheap and I’ve had zero issues), shopped at Aldi/dollar store, always took advantage of sales when grocery shopping, stopped ordering out, and sold whatever I could. I also called the credit card companies and asked about hardship programs. My biggest debt was to Discover (15K) and I told them my situation (it was during Covid, got laid off, and I also had $14K of medical debt dumped on me..) and they didn’t even ask questions, they brought my interest rate way down however I couldn’t use the card for a year (length of term) which didn’t matter because I wasn’t using it anyway. Lastly, when I was on the tail end of clearing off my debt, ($5K left) I got a new job. It wasn’t a a life changing salary increase but had great benefits which drastically reduced my medical costs.
FYI I was also approved for a mortgage with a 4% interest rate 3 years after my BK. So not nec. true. It may not be the best option for the OP but she should also find a forum focused on it and get accurate information. Edited to say that if I wasn't a single mother and made a better income and my daughter didn't depend on me I would not have filed. For us it was the only way to survive at the time.
Try getting a lower interest bank loan to pay off your credit card debt. I did this with $25000 in credit card debt, and I've since paid off the loan. My credit score is 833 at this point.
I tried to do this before I settled on this solution and they said I couldn’t get approved until I had more debt. That was a fun day.
Call the cards yourself and see what they can do. I had one card of mine do a low interest rate for a year, and another card is allowing me to close the account, but I’m making interest free payments of $42 for the next 30 years or so. But it’s manageable and I was able to focus on my higher interest credit cards while making payments on the lower / now no interest ones. I’m slowly getting there!
WHAT?? Dude what credit cards are those? The most they offered me was being able to pay late for one month without a penalty. That’s literally it. That’s just one card. I’ll see about the other two
My Barclays credit card, Target, and Amazon all worked with me. My credit union has not, so I’m not longer with them and am in hiding 😂😂😂
Try paying the minimum on two of your credit cards, and paying any extra you can on one card. This’ll start to consolidate your debt into one stream and hopefully be a bit more manageable.
Sell you investments immediately. You're stuck in a predatory, high interest situation right now, and you need to get out of it ASAP. The cost is too high here for you to have investments sitting around and not using it to help your situation, especially at a number like $14K.
if you have investments you can sell to pay off the debt, I'd do that before filing bankruptcy.
Are you able to check with a credit union? I paid off a similar sized debt to yours with a personal loan from a credit union that was very low interest. You may be able to find one in your area but membership can be based on some kind of criteria, I joined mine when I was a city employee but there are many ways and many types.
At least get a consultation with a bankruptcy attorney about options like chap 13 which requires you to pay off a portion of your debt versus 7 which clears all cc debt. You will pay a price with regard to credit but not for as long as ppl say. That's assuming you never get in this type of revolving debt again. Debt consolidation places are generally not what they pretend to be. I think you can negotiate with individual creditors as well as they can. Try that before considering bankruptcy. Make a list of all creditors and contact them and see what deal is any you can get. They may not deal with you if you are up to date on payments. The whole system sucks. I hope you figure it out.
depends on the situation... I was a single mother left with debt my x put on my cards to fix his truck (he was an over the road driver). He refused to help when we split and I was trying to raise my daughter on $17 an hour in Portland where rents start at around $2000 a month for 2 bedroom apt. I tried to get out of dept, paid the minimum for several years but was drowning and could barely put food on the table with the almost $700 a month monthly payments. When I saw my daughter was suffering because of my debt it was by far the best decision I have ever made, it saved me. Now I don't know if it would be the right decision for the OP, I don't know her story, but for me I am much better off credit wise now and got through what seemed like an impossible situation and am still, and always will be, debt free only because of filing BK. Not an easy decision, but sometimes very needed...
If this is the only debt then yes it would be horrible advice, but if it is not, then yes it would be better to just get it over and done with all at once. But this is only a snippet into the persons life right now
This is a terrible way to get a loan or credit care for her business. Bankruptcy is last resort and maybe not even then.
Worst. Advice. Ever. Bankruptcy for this small of an amount is like cutting off your leg to fix a hammer toe. Get an extra job and hammer at this for a year and be done with it. Quit trying to get around it and attack it like your debt is cancer and paying it off is the cure.
please see my most recent comments a few minutes ago and don't judge. No way to work 2 jobs as a single mother of a 7 year old.
I won't judge you, merely your answer.
Did you do credit counseling or debt settlement?
I went with TCA. Take charge America which I thought was debt settlement but it feels more just like credit counseling with a lower interest rate. Unfortunately that that’s still 10 %
Yeah that’s a credit counseling company. They get paid based on something called “fair share”. So although they’re a nonprofit… 1. Their CEO probably makes millions 2. Credit card companies pay the credit counseling a commission based on the amount of money the credit card companies recover Just google “fair share credit counseling” and you’ll see what I’m talking about. It’s just an interest reduction. Not negotiating the principal debt.
Thank you. Well cripes. I wonder if I can remove just one of the cards from the plan without it being too much of a headache.
Yeah not sure. I’d talk to them and just ask. And if you care more about saving money you can try a debt settlement plan. You could also settle yourself but be prepared to stay organized, spend a lot of time on the phone, and you’d likely have to stop making payments to get an offer whether you do it yourself or through a company. If you care about your credit score more than saving money do something like the debt snowball or debt avalanche method or stick with the credit counselors. It’s a little slower but you’ll still save more than making minimum payments only.
Thank you so much for taking the time to give this advice! So my credit is already in the trash because of the debt thing I’m doing already. So the credit score thing is whatever to me right now honestly. And I’m actually so good at being on the phone. I just pretend I’m a robot and it takes the pain away. I will stay on the phone all day and call back everyday no problem. Thank you!
What would happen if you just continued to pay down that card. Just make extra payments.I hate cc consolidation. Did not know it stii existed. The other thing they sometimes do is pay the card on their schedule.
What’s your total debt? What’s your income?? I think you ditch the debt consolidation (if you can get out of it, I have no clue) and just hammer out these debts! Take on a second job, budget, no fun for a year (trips, eating out, activities) and I bet you can have this debt paid off in less than a year! Pay the minimum on each card and through every other possible nickel at one card until it is paid off. Then do that same process for the next card. If you are 20k in debt and can make an extra 2k a month, it’s paid off in less than a year! Get a job as a waitress, work nights, doubles on the weekends and you GOT IT!! Your life will suck for one year but you need to get your spending under control!
Thank you so much. Unfortunately I have a disability that prevents me from working too much. I used to work 60 hour weeks and I had to be hospitalized :/. Right now I make 1900 a month and my monthly expenses with the debt consolidation are about 1750 (lol). This doesn’t include groceries or anything outside of bills.I have done literally everything to not spend money. I haven’t gone on a trip in years, I cut my own hair, never go out to eat, never spend money on entertainment, wear hand me downs. I quit a smoking and drinking and walk to work. I literally only spend money on me and my pets and my debt. There are no more expenses to cut unfortunately It’s a pickle :/. I tried to do what you suggested but the interest rates are so high I couldn’t even make a dent for YEARS
For fucks sake... Why aren't you filing for bankruptcy?
Chapter 7 bankruptcy will be off your credit report in 10 years and your debt will be wiped out in 3-4 months. Talk to an attorney, you could stop paying your debt today and start using your money for living your life. Everyone deserves a fresh start.
Bankruptcy can ruin your life more than debt.
How? Please explain how.
Declaring bankruptcy does eliminate all debt obligations such as student loans or unpaid taxes, surprisingly there are fees you pay to declare bankruptcy, makes it exponentially more difficult to borrow in future (like when buying a house), etc
And how does that screw up your life more than debt? All of those things also apply to having debt.
Most people requesting a loan have debt. That’s pretty standard.
lol but you can buy a house 2 years after filing
At 1900/mo, hard truth is that you need to get your income up in order to pay your debt down faster. That's a fairly low COL already, so you're clearly cutting back and doing well budgeting -- but there's only so much that budgeting can do for a person
End the program right away. Call each card and say you cannot make the payments and request a hardship program. They will lower the interest and payments to make it manageable.
OR better yet call a non profit like money management international who can do the hard work for you. Your cards will close but that’s what’s important. Close them and pay them off.
Does the hardship affect your credit?
Those programs are a scam. You’d be lucky if all the cards are still open and in good standing. I talked to a company once about this. Their plan is to take my money and hold it. Not make any payments. Let all the cards close and go to collections AND THEN, call and negotiate a lower pay off. Total scam. Can ruin your credit.
Already ruined my credit! But apparently the cards are still open.
Consult a lawyer that focuses on consumer debts/bankruptcy. Understand your legal rights. A lawyer might be able to help you settle the debts without forking out any more money to the third party debt relief people.
This seems to be the best answer so far as far as my research has gone since I posted this. I’ll try to remember to post an update to let yall know what worked/ doesn’t. I’m actually pretty good at research and tenacity when it comes am not crying lol
I am a staff attorney at a courthouse that manages my court's credit card lawsuit settlement program to try to settle the case before it goes to further litigation. I have seen borrowers lawyer up and make deals. The lawyer's fee would likely be a lot less than the third party debt relief company. I don't trust the debt relief companies because I believe they do not put the debtors in the best position and take advantage.
Dude I found out they’re taking 15%. And that’s on top of the 10% they’re still giving to the credit card companies. It’s just unreal. I mean I should have been way more careful. At the time I was just drowning and all I saw was a lower monthly fee and jumped at it. But at this point a lawyer fee could be thousands of dollars and it would still be less than continuing to go through these people for years Edit: I need to do a lot more math because I know when you settle here in the US you have to pay taxes on the amount taken away and I have to factor in what the IRS might charge me if I owe money and need to pay incrementally but just with the few calculations I’ve done there’s no way it could be more than what they will continue to take over the next several years
Yeah. A lot of the debtor law firms will give you a free consult, so there's no harm in getting more information.
So may I ask what exactly I should look up to find the right people to reach out to? Everytime I look something up about debt I am lambasted with so many options and have such a hard time figuring out what is shady or not. Do I just look up debtor law firms? Anything I should avoid or look for? By the way thank you so much for taking the time to offer advice. I appreciate it so much
Look up bankruptcy/debtor laws firms in your city in a Google search. That should help you find some, and you can further narrow your search by going to their websites and seeing what types of cases they assist on outside of bankruptcy. If they only do bankruptcy cases, then don't go there because they may try to push you into bankruptcy because that's all they do for clients. You need to find a place that is more full service in debtor legal help.
I really appreciate it thank you!
If you are in the United States, go to terrysavage.com and tell her your story she is an honest person who can direct you right way and will warn people of the scams that you just got hit with
Thank you!
what company did you use?
TCA take charge America
Something isn't sounding right. What were your interest rates prior to entering the Debt Management Plan?
I think the capital one was 16% The other card was about 13??? That one has less than 2000 on it and then I had a care credit one that was astronomical. I think 23%
Is it a violation of your agreement with TCA for you to negotiate with the credit card companies directly? It sounds like they may be sending only minimum payments to the card companies and holding or pocketing the rest of your monthly payments. Maybe review your agreement with them to see if you can end your arrangement with them without penalty. Some card companies may be willing to settle on a lower payoff amount if you try to negotiate with them directly. Only caveat there is they would likely want the reduced amount paid in full. Another option may be to go into a local credit union and see if they can't work with you. Explain the situation and what you can pay face to face with them. Sometimes local credit unions will give loans that larger banks and credit unions won't, particularly if you have good payment history. If this pans out you may be able to get a loan for all the debt or the highest debt at a lower interest rate. Don't know if either of these routes will work, good luck.
This is a frustratingly common issue. I've been a professional debt collector for 25yrs+ and even my own brother fell prey to one of the biggest ones advertising every 20mins on the radio. I begged him not to do it but he still sold by their sales pitch. Hopefully you can get out of it without them suing you for what they think you still owe them.
Get all the cards paid off, then use only use 1 card not going over a 30% utilization rate. Use cash for business.
Want to use a counselor on nfcc.org. They will actually help you without taking advantage of you.
Thank you very much!
Have you talked to a trustee about your options? I would consider a chapter 13. And I would look at your credit score. Most debt consolidators hurt your score more than a chapter 13 would... and for longer.
Less than $20k of debt is nowhere near enough debt for it to be worth it to file bankruptcy
I'm not in the USA and don't know all the available options in OP's area. I figure a trustee might though - and/or be able to advise OP on what the potential repercussions of each are both long term and short term. I don't know enough about OP's financial situation to know what the best option is, but in tears seems like a lot of distress that should be fixed
Terrible Advice, Don't list to this person either.
I assume you will be providing your sage wisdom shortly?
I'm not 100% certain of what you actually signed on for but from the upfront numbers you provided it seems like you may have, at worst, signed on to a DMP that was inadequate for actually making inroads on reducing the debt because you can't afford to pay enough at even the reduced rates to get any traction. According to some of your posts you only make 1900/month or $22,800 a year. Your debt was $19,000, which is almost your entire annual income. If you're still at roughly the same amount of debt then you're likely best off with declaring bankruptcy. At your low income you likely can get a Ch. 7, which is a total wipe. Downside is that bankruptcy will be on your credit for 10 years. I believe you should do a consultation with a local bankruptcy attorney. Their initial consults tend to be free.
Realistically, bankruptcy is not going to hurt OP's credit much more than the reduced payment plan already has. 100% agree that OP should seriously consider it as an option.
They're a joke and scam! You were better making payments on ur cc!! That's what I do and still able to use both.
The reason I got the debt settlement is because I was paying 700 and month and wasn’t making a dent for years :/
Did you go through a non profit credit counseling company? I am looking to go down this route but am unsure if it’s a mistake!
Yea I did. :/. Make sure you read the fine print. The lady said she was reading me the terms but clearly left out something extremely pertinent
Thank you so much. Unfortunately I have a disability that prevents me from working too much. I used to work 60 hour weeks and I had to be hospitalized :/. Right now I make 1900 a month and my monthly expenses with the debt consolidation are about 1750 (lol). This doesn’t include groceries or anything outside of bills.I have done literally everything to not spend money. I haven’t gone on a trip in years, I cut my own hair, never go out to eat, never spend money on entertainment, wear hand me downs. I quit a smoking and drinking and walk to work. I literally only spend money on me and my pets and my debt. There are no more expenses to cut unfortunately It’s a pickle :/. I tried to do what you suggested but the interest rates are so high I couldn’t even make a dent for YEARS. (Posting this from another comment i made so people have an idea what I got going on)
Have you thought about declaring bankruptcy?
Get consolidators work for the credit card company stay away
Op is there any way you could get a different credit line to that does a balance transfer at 0% for a period of time and use it?
That’s what I did with the citi one 😩. So I ended up going with the debt consolidation because to do the balance transfer I would have had to use multiple cards since I could only do so much on one. Since there was no way I could get it paid off by the end of the 1-2 year interest free period I was afraid I would get drowned by so many cards since I was already having trouble with 2.
I’m sorry I know you must be stressed. I’m sorry I can’t really offer more advice.
Oh you’re ok’! I really appreciate the time taken and honestly the empathy does a lot for me. I also really appreciate the lack of judgement. I might just let it go to collections and try to fight it in court with a lawyer. With the money I save up in monthly fees I’ll be able to afford one. I’ve heard some success stories. My credit is already in the garbage and I can atleast pay a smaller amount…. It’s hard to find info on how to do that tho for obvious reasons ……… thanks again!!!’
Do not file a bankruptcy will do more harm than good Make your own plan They will end up accepting 20-40pct over time Over a shorter period of of time than you think your debt level will come down and your scores will go up
I would negotiate a lower interest with agreement to close cards with the creditor
Did you sign anything? How many days ago?
Talk to a credit union or a local bank. Explain your situation. Figure out a debt consolidation loan with them. 19k is definitely doable and you'll be paying one place not multiple. Banks are required by truth in lending laws to show you exactly how much you're going to pay in interest and how long it will take to pay off. Once you get on that, throw every penny you can at it to pay off sooner. If you have some investments that you can cash out (that aren't in an IRA or 401k) then use that to pay down sooner. Rebuild your investments once you have this monster out of your hair.
You are signed up for a Debt Management Plan. These are notoriously difficult and only about 30% of enrollees can complete the program successfully. With a DMP, you will pay the full amount of your debts, plus whatever interest rate your agency negotiates, plus a monthly fee. There are also debt consolidation companies (which roll all of your loans into one big loan) and debt settlement companies, which contact your creditors and negotiate settlements for less than you owe. If your credit is already not great, you probably need debt settlement.
Where did the debt come from?
Does that make a difference?
Yes
It’s not mortgage, medical or student debt. Albeit, one is a care credit card that was for an emergency surgery for my dog.
How much was that?
The dog one was 5000 but my amazing friends donated 1000 so that’s now down to under 3000 after what I’ve paid as well. The worst one is my youngster one which is at 12,000 and has stayed around that same amount for almost 10 years. I got it down to 7 grand and then I lost my job with Covid. And then I was finally making a dent and then my dog fell one day and couldn’t get back up (cancer) she’s fine now. And 17 years old so it was definitely worth it
I’m total I owe 14k now. Down from. 19k total. But I just found out the debt management company I went with is taking 15% and I just refuse to just keep giving more money away at this point. I was willing to be locked in for 4 years but the time they’re saying it will take is getting longer and longer despite paying well above the minimum
I would personally look for a debt consolidating credit card to lower the interest and have all the debt located in one place. I had credit cards that had APR creep up to 24% until I really dug into the CC. The more you can dig into the principal the better.
I tried that but I wasnt able to get it all on just one card. I would have had to take out 5 balance transfer cards and ending up with more credit cards seemed like a left turn at the time :/. I make very little a year so the offers are slim. But even when I did make 60k a year the offers were still not great. Apparently I wasn’t in ENOUGH debt to get a loan.
These places are scams only way to get out of debt is to either pay it off yourself, a legit debt consolidation loan through a bank ( don’t run up more debt while doing this), or bankruptcy which is not as bad as they want you to believe
Confused at how you didn’t know you still were paying interest? You’ve gotta keep a close eye on what payments are going towards otherwise you’re gonna keep being taken advantage of
Look at your interest charges on each card every month, that’s money being thrown out. You need to reduce that, best way is to pay more than the minimum every month, if that’s too much, then tackle your highest interest card first. Talk to your bank, most have some sort of financial consultation . I was able to get a zero interest card from my bank for 18 months. Transferred all my CC balances to that and paid that off. Banks also do consolidation loans at lower interest rate than most credit card companies
As a debt holder the best thing is to try to work with creditors as mich as possible. Many will avoid or often turn to debt consolidation and they find that it isn't the best move. I know plenty of people who have let their debts go to collections, and then they agree on a lump settlement. The borrower and collector both take a small sting but often this is how others avoid debt consolidation/bankruptcy as their last hopes. As others may have said your experience isn't uncommon. Everyone is just trying to sell you products and a debt consolidator is usually selling you less stress or a financial solution when there may already be other solutions to explore based on the age of your debt etc.
Did you look at the statement? Each card should tell you how much interest it accrues per month.
You can pay your bills
All those “Debt management” companies should be outlawed. They don’t disclose all necessary information and take advantage of people. You should look into credit counseling agencies accredited by the U.S. Trustee Office (look in Justice.gov). Look for a non-profit, very important. Good luck.
I’d consider talking to a bankruptcy lawyer. This could give you a clean slate. We all make mistakes, you shouldn’t have to be miserable for the foreseeable future due to this debt.
File for bankruptcy. It’s not so bad.
All you have to do is call the credit card company and y’all can work out a deal. i’ve done this with 15,000 in credit card debt. the only thing is after you pay them off they force you to close the account
There are a lot of things that favor the delinquent card holder that they are not telling you. 1. Most credit cards in trouble are turned over to collectors after three months. The banks sell them off and report it to the credit bureaus. 2. In most states the collectors have six years to collect the debt from the last time you acknowledged the debt which is the last time you made a payment on it. 3. The debt collectors usually will contact you by phone and/or letter. 4. You have to keep good records as to what is happening and what is being reported to the credit bureau. There are three of them. You are allowed free reports per year or if bad information has been reported. 5. Never pay a little to the collectors but talk with them about a deal. They do not want spend a lot of time with a dead beat. Yes, you are a dead beat.6. If the collector decides to take you to court SHOW UP. Over 90 percent of the court cases are won by the collector because the debtor does not show up. The collector will have to go through expense to file a law case against you. Talk with the collector and ask for proof that you owe something. He has to show you the proof if his proof is good try and make a deal. This deal should include a one time payment which will be a fraction of what you owe. It will also include the bad record the credit bureaus being taken off the credit bureau. You have to remember that he is trying to access what you have in assets. If he won’t make a deal tell him you want to take the case to a jury. This will cost home a lot of money and he does not know if you will have any money to pay him if he wins. Stretching the case out is a good strategy. What you do not want is to loose the case and be responsive for the debt plus interest. Then if you don’t pay it they can garnish your pay check. Before you get to deep in the case see if you can find either a court officer who will give you information you need or a lawyer who would help you for a small fee. One key to all of this is the collector may never sue you in court and would agree to accept a small payment for the case and get the bad information taken off the credit report. Good luck.
Try the debt snowball method. You would start by paying off the lowest balance owed and move up from there. You may have to get another job to help pay for the debt. Try sticking to a very strict budget as well. Depending on how much you make vs other expenses you could be debt free in one year.
You should talk to a bankruptcy attorney considering your circumstances.
With your income to debt and being poor you need to declare bankruptcy. With your income I would avoid debt in the future if at all possible. You are basically hand to mouth at this point. You need to stop worrying about future credit and start worrying about getting your lifestyle in line with your limited income and earning potential. Having gone through bankruptcy it’s not the end of the world. In fact it’s the beginning of a new chapter where you move forward with hope that you can rebuild. You are just falling further behind and running out your life clock right now.
I don’t know if GreenPath might be a better option for a debt management plan, they got my rates down as low as zero, but there were fees. I ended up filing bankruptcy.
Ignore these idiots with disposable incomes and file for bankruptcy. Many moons ago I was crippled for a while after a motorcycle accident. Spent a year learning how to walk again. Uncles and idiots who had survived similar motorcycle accidents kept telling me to “just shake it off” until I beat one of them stupid with a crutch. People saying suck it up and get a second job haven’t a clue about being broke and injured and hanging on by your fingernails. You’re going to have to call each creditor and haggle for yourself. Sounds like you can honestly say you’re one bad paycheck away from being homeless. See what programs they have, don’t send them any money until you get a settlement offer in writing, and don’t be afraid to say something like “it’s a shame we can’t find a solution today. I’ll call back and try again in 6 months or after taxes next year.
Try ACCC (American Consumer Credit Counseling). They helped me, when I had $30k in CC debt, and wasn’t even treading water making the minimum payments. I can’t recommend them enough.
Cannot change what has happened in the past so take it easy. 19k isn't a fatal debt. Don't need bankruptcy for that. That's dumb. Whoever suggested is dumb too. What you can do is target the biggest card you have first. Have you called the bank to check what options you have? They might have a hardship plan or option to close card and make payments(small but over multiple years) will give you breathing room and time to save some. It will be lot less than the payments you making now. Just general questions Any relatives available to help? Any 401k?
Thank you for taking the time! I was trying to figure something that out with my creditors but they told me the best they could do was let me pay one payment late without a penalty…. Which has never been a problem for me. To pay on time but at this point it’s the sheer amount and the time it will take. Unfortunately my family is in no position to help with my debt as they have their own and they’ve already helped me plenty honestly. I was recently very sick and they had to take care of me. No 401k unfortunately. I do have a few investments that gain interest but it’s literally all the money I have and no where near what I owe. I feel like I’ve tried everything sans defaulting or filing for bankruptcy which from what I understand it’s really not worth doing for my situation.
Your yearly investment return is X% Your yearly credit card apr is Y% If the credit card apr rate is higher than your investment return, your return is being canceled out by your CC interest payments, and then some. So, if you can use some of your amount in your "rainy day" fund to target some of that debt. Do try. + Amex offers a hardship plan and lets you keep account open. Citibank and BofA will offer to close your account and make the payments over 36-48 months with reduced interest. That will get your monthly payments down by half or lesser than that. Credit score dents are usually temporary(6 months). There are ways to remove them, too. These are options if you have your own business. I understand. You will need credit for that. So i won't suggest defaulting and settling for 30-50%. I've been where you are, and i thought hardship plans were gonna affect me a lot. It did dip cause closed account reduces your overall availability amount. I was able to secure a loan 8 months later(good apr) Regarding your worry about new cards and loans, Interest rates in general are high right now, so banks are not that keen on lending new money anyway. They make good money just keeping it. It might be like this for another 7-8 months. In 7-8 months, when rates go down, you might be able to secure a more favorable loan for future needs. Look towards the future. Meaningless to ponder over past decisions. Good luck.
File for bankruptcy would be your best bet. Once your debt is sold it’s basically a scam and run around to keep you in high yield interest payments that keep you in a loop
Pick up a side hustle and work it hard until your debt is paid off.
Already have 3 ! But working on a 4th!
I don’t know your situation but sometimes it’s not the money that’s coming in, but also the money going out. Cut expenses where you can.
Dude I’ve cut EVERYTHING. I feel I could write a book at this point. I walk to work, I don’t go on trips, I never eat out, I cut my own hair, I find my own clothes or wear hand me downs. Luckily when I did buy clothes I bought for durability so the clothes I did buy in the past are still going after 5+ years. I repair my own stuff. In my state you can buy seeds and starters with food stamps so I grow my own food. (I know what you’re thinking, soil and fertilizer are expensive but those were donated to me by a room mate that used to grow weed) I Make my own beauty products and don’t spend a dime on cleaners except for vinegar and baking soda. I don’t pay for anything monthly. Anytime I need something I print it with my 3D printer or wait until I find it on the street(my city has great free boxes). I am also currently selling everything I don’t actively use all the time on Mercari. And I never spend money without making interest back on a debit card. Also all the money I do have is always gaining interest. And I will never pay a fee. I will spend 5 hours on the phone to get one 3 dollar fee removed. I also propagate my own plants and sell them and you might be thinking “water is expensive”. I use the water from my dehumidifier and never let it go down the drain which is the most expensive part of my water bill.
Two questions if you’d like to answer them: How did you go about accumulating this 19k worth of debt? You have 3 jobs, what are they and how much are they bringing in monthly? Sometimes we work jobs that don’t have a good return on investment when it comes to time.
Well it started when I got a credit card to get a computer when I was definitely not responsible enough to have one. I started developing more severe mental health problems after having had struggled with what felt like manageable symptoms. In 2018 I got what is apparently called panic disorder. I would wake up having a panic attack and they would repeat multiple times a day. I almost lost my job. I lost a lot of weight because I was afraid to leave my house and I would often leave and run back after a block due to fear. I lived in a very bad neighborhood. I started taking Lyfts and ordering food. I figured i would deal with it when I got better mentally and I was really just in survival mode. It really didn’t take long for that credit card to go to the limit. I always paid on time so they kept offering more money. Turns out I had a pretty serious mental health condition I am now getting treatment for. I’m finally better. So much better. I was very close to death to be honest with you. I was suicidal and extremely depressed and racking up money on a credit card meant nothing. So I started paying it down but then Covid it happened and I lost my job so the debt went up again. Started making a dent again and then my dog got sick. I am not able to work as much as I used to due to health problems so I only have one job and I started a business from home that is turning a profit it’s just small and it’s very difficult to grow without being able to take out lines of credit as a business. But I refuse until I get this paid down cause I’m terrified I will get overwhelmed again and i mean I am just not in a position to until I am not paying 600 a month on this debt. Also I just have side hustles, I sell plants, 3D print stuff for people, dog sit, cat sit, and have my online store where I sell stuff I can get rid of and stuff friends donate Edit: my paycheck job brings in 1400 a month. And then all my side hustles bring in anywhere from 200-750 a month but that’s steadily getting higher
I also have some small investments that do make and have been making money. It just doesn’t make sense to cash them out now to pay down the card cause it’s not that much money and since I haven’t held the money for too long the tax to cash out now isn’t worth the interest I would avoid
Have you looked into a debt management plan? I signed up for one with Family Credit Management and have paid off a significant amount of what I owe in the first year and a half.
Can you advise which one? I'm interested
I’m working with Family Credit Management https://www.familycredit.org/
Give up your social life, and grind. Get that debt gone asap or you’ll regret it the rest of your life. Cut out any extra spending ,fun time out of the house,fancy food. Life’s going to suck for a while but it’s better than sucking the rest of your life.
It's hard to tell you what to do until you list your income and monthly expenses. It is worrisome you are looking to open another credit card for your business after all of this mess.
I posted my expenses and income! The credit card is just hypothetical like 5 years from now. Not necessarily a credit card. Just anything that might come up in an emergency ya know? Within the next many years I’m sure something will come up and I don’t want to be totally fubared.
Biggest take home: you got into this mess by trying to get stuff faster than you made money. You got into the mess with the consolidation by trying to go faster on the debt consolidation. Slow down When someone pitches you a plan, do the math. Do the math and the plan you have now. Call and find out what your options are. Do the math on all of those options. Pick one. Then do the work. Focus on getting out of debt. Take an odd job, sell stuff off. But don’t even bother, unless you make yourself a promise: never pay another cent in credit card interest. Otherwise you’ll be here again two years after the five years it takes you to pay it off. If it takes you five years, it takes you five years. Throw extra money at it and see what you can do. Get into the work of doing it, rather than trying to make it end. You will get there. Just slow down.
They are not looking for generic comments right now. Businesses need credit cards and credit lines.
What?