Have 40,000 in credit card debt, are those debt relief programs helpful? whats best option?
Question:
Answer:
Call the American Consumer Counseling Center - unlike a lot of those "debt solution" places, this is a non-profit and won't take your money. They can give you some great counseling and advise you on the best options for your particular situation.
American Consumer Counseling Center
http://www.consumercredit.com/ or 1-800-769-3571
Also, get down to your local library tonight and start checking out personal finance books - they can be wonderfully empowering and inspiring, and most are written in simple, easy-to-understand terms.
-The Complete Idiot's Guide to Personal Finance in your 20s and 30s
-The Complete Idiot's Guide to Managing Your Money
-Smart Women Finish Rich, by David Bach
-any Suzy Orman books
Credit card debt is probably around 18.67% interest per year. Those companies will help you, many of them for free. They will try and consolidate all of your debt and get the interest down to something more manageable like let's say even 10% (probably less) and stop the phone calls.
Bankruptcy will delay your house ownership dreams.
Those companies are great to help bring down your payments. However, it does hurt your credit as long as you are with them. If you try to purchase a car, house, etc. it will show up on your credit.
There's something you can do besides bankruptcy.
Find a local mortgage planner or broker.
If it fits your situation:
If you can make a profit by renting your house, do it. You could ask for 5 months upfront for a months off. It'll give you some money for urgent payments.
Good luck !
I have just about as much debt (38000), but it's all on 0% introductory rates, which I am making money on- (see this book for details: http://www.amazon.com/gp/product/1600200... )
Debt isn't necessarily BAD.
In your case, however, it appears that you probably don't have the assets to cover all that debt. You can still look into transferring balances to lower-interest rates (watch the fees on those transfers!).
If you have any savings- pay off your debt. The less debt you have that's costing you 15% or more, the more it makes your savings worthless.
To answer your question, though- sometimes those relief programs work, but they usually end up costing you more in the long term. If they have a lower rate than what you're paying and the transfer fees are resonable (limit of $100), you should consider it. Then you can negotiate with the newly balance-free credit cards for lower interest or close your card and they're sure to offer you better deals.
Read up on the above book (How to Take advantage of the people who are taking advantage of you) it's a great resource!
Good luck!
How about paying it back. Or sell the crap you bought with the $40K and pay it back. Or get another job and pay it back. Are you seeing a pattern here? PAY IT BACK.
It always amazes me how people go out and spend money beyond their means and then don't want to be responsible for it.
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