Debt Consolidation

[Heifer]

Has anyone ever gone through with a debt consolidation? I am looking at Christian Credit Counseling and am not sure what I am getting into, but I have to do something.

I seem to pay and pay and not get anywhere!

Worried...
Heifer

[missyk]

I have been wanting to look into this too. Our credit card debt is astronomical and it feels like its not getting paid down at all. I do know that you shouldn't use anybody who charges you a fee, always look into the non-profit companies. My fear though is that its going to hurt my credit if I do it. Don't they work with the credit card companies to lower your interest rate? Wouldn't the CC company report that to credit agencies? Hmmm?
I'll be looking into several companies so I'll be sure to post any information I find. If you do use them be sure and let me know how it turns out. :D

[angelrenee]

The information will be provided to your creditors that you are working with an agency. It may in the short run slightly damage your credit if you have been making consistent payments with no lates, etc. Hoever, in the long run, it will do you good. You'll be able to pay off your outstanding debt and reduce your debt to income ratio which if it's bad (like mine is) should balance out the small damage you took in the beginning.

Look at it this way, 7-10 years of bankruptcy on your record is very bad. If your debt to income ratio is high, you'll have a hard time getting loans or credit as long as it stays that way (however long it takes you to reduce balances). You have to look at your own situation, but it may very well be the best choice for you.

We decided not to do this because I have very low interest rates on my cards and believe we can pay down the debt in the same amount of time as the counseling organizations offer. We may change our minds later, but for now this works for us.

One thing to be careful of. DO NOT consider one of the lawyer groups (debt settlement agencies). They'll encourage you to make no payments on any card and send your money to a savings account. When you have 1/2 of one bill in the account, they will go and negotiate with your comany to settle the account for that small amount. This can very badly affect your credit rating, no matter what they will try to tell you.

[Deana]

Several years ago, I thought about doing this, but I was afraid it would hurt my credit, so I opted not to.
I just got approved for a 0% interest card for one year, then it goes to 10% (still not bad), so I transfered my balances (one big, big one, one smaller one).
If you can get approved for a low interest rate card and then do balance transfers, I'd do it.

[Heifer]

Thanks for all the replies. I have checked into Christian Credit Counseling and they are a non-profit group.
I haven't gotten all the facts yet. But, hopefully it will be good.

[Heifer]

Well, Christian Credit Counselors was not able to help in reducing our debt. They do not deal with some of the creditors that I have so they would not be able to reduce the finance rate and the only one I do have they could work with was not enough for them to mess with.
Back to square one. Anyone have any ideas other than holding up a 7-11 or a bank?:confused:

[missyk]

Have you looked into any other credit counseling agencies? One thing I want to look into once we sell the house is trying to get a debt consolidation loan. Most likely the interest will be lower, and I'll feel better just knowing that I'll have my debt paid off in X years. The only thing is, I don't know if they offer unsecured loans for the amount I would need ($15,000). But I guess its worth looking into. Maybe call your bank and see if thats an option for you.

[Toryah]

We joined a debt management programme last month...i live in the UK so things are probably a little different here :)

Good luck, it will make such a difference to have some help with managing it all...there is light at the end of the tunnle...go with your gut instinct you will know when your happy with a company :)

The idea of our programme is that you turn your debts over to this management company and they contact the creditors and freeze your accounts and interest rates so we save loads of money on the interest rates...we have NOT had to apply or take out another loan at all.

[CLHAFOBA]

I paid off my consumer debt in January 2003. Boy - what a great feeling! Now I only have 4 bills a month: Rent, 2 phones, and electric. Here is the method I used. NOTE: I did not have as high of debt as you. Mine was about $5K plus an auto loan. But hopefully these principles will help:
A. Stop charging! Do not charge ANYTHING. If you can't pay cash, DON'T BUY IT. Buy only one big thing at a time - one thing you can pay cash for (toy, repair, appliance, etc.) Transfer credit card balances to low-rate cards if you can (0 to 9%). Close out the accounts you transferred from about 1-2 months after transferring. (You may incur a few more interest charges while the xfer is processing, so don't close them out too soon.)
B. "Power Down Your Debt." This principle applies when you have a few credit card balances. Put them in order from the highest balance to the lowest balance (regardless of interest rate). Plan to pay off the lowest-balance one first. Here's the method: Pay the MINIMUM PAYMENT on the higher-balance cards. (You must pay SOMETHING or your credit will be tarnished.) Then, pay the MAXIMUM you can afford on the lowest-balance card. Example: You owe $5000, $2500, $1000, and $700 on 4 cards. Pay the minimum payment on the first 3 (usually $20-$200 I am guessing?). Then pay as much as you can on the $700 one. Repeat until the $700 one is paid off. THEN NEXT MONTH: Take the money you WOULD'VE spent on the $700 one, and apply it to the $1000 one, while still paying the minimums on the others. When that's paid off, take the money you would've spent on the $1000 one and apply it to the $2500 one. What happens is, you're powering down your debt. By the time you only have the big one left, you'll have a lot more money to put towards it, because you won't be paying minimums on the others. Get it?
C. If you have direct deposit, put some in your savings, AND DON'T TOUCH IT! It's tempting, and sometimes you just have to, but the advice is: DON'T.
D. I got "lucky" and got in an automobile accident. The insurance paid off my totalled vehicle loan, plus gave me $3700 cash. BUT - I no longer have a vehicle. I walk, ride the bus, ride my bike. I save approximately $400 a month by not having a car. This is saving on car payment, gas, insurance, and countless trips to the store. I would literally go to the store EVERY DAY. Or I would go to the drive-thru ATM. Now that I have to walk to and from the bus, I only go to the store about once a week and don't buy a lot then because I have to carry the bags on the bus. This is definitely a blow to the ego, BUT - I AM DEBT FREE. If you can get rid of a car, then do it. Or don't be concerned about a glamorous car. TO BE RICH, YOU HAVE TO LIVE POOR. My next car (if I get one) I'm going to slap down cash for. But not my entire savings.
E. I didn't buy a house when I found out I qualified for one. People try to convince you that a mortage is an investment. To me, a mortgage is DEBT. Big debt. Big debt commitment. People say a bigger mortgage saves you taxes on interest. So what? It's bigger debt. I'm sure there are others who disagree. I guess a house isn't my American Dream.
F. Pray, and try to give to charity. Anonymously. God rewards people who do this. Don't brag or tell anyone how much you donated. Just do it. Even $5. I donated to People Care, Salvation Army, and Diabetes fund. God WILL provide if you follow his guidelines. My story: I got to participate in a class-action lawsuit for a mis-worded auto loan. I should've received $480. My check was $1300! I guess not everyone participated in the class-action. The Lord works in mysterious ways!
F. Don't be swayed by advertising. Advertisers only want to sell something. I am a Christian and would trust that the Christian Debt Consolidators wouldn't scam you. But you can also go to the library and find books on debt reduction. Think of the money you'll save while you're sitting there reading a book instead of buying something!

[LBD301]

My DH went to Consumer Credit Counselling. He had 25K in CC debt on 4 cards. One card he paid off himself before he did it. The other 3 went to CCC. They negotiated a lower rate with all three. He pays $536.00/mo. to CCC and they split it up between the three cards. It's set up so one gets paid off within a certain amount of time, because that was the agreement with that company. I think it's 4 yrs. and it will all be paid off. He's been paying for about 1 1/2 yrs. now. There is a $35/mo. "donation" to be part of it.