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C.c. debt- what are my options? (NY)
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amother




Gold


Post  Mon, Mar 20 2017, 3:49 pm
amother wrote:


In any case, you need to figure out why you have so much credit card debt, and what you're going to do to ensure that you don't fall into that rabbit hole in the future.


Believe me, it wasnt because we were taking vacations, buying new cars, sheitels. Just trying to survive, feed my kids, pay rent, utilities, tuition's.
Do you have experience in this? You replied to someone else, as well.
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amother




Floralwhite


Post  Mon, Mar 20 2017, 3:59 pm
amother wrote:
Believe me, it wasnt because we were taking vacations, buying new cars, sheitels. Just trying to survive, feed my kids, pay rent, utilities, tuition's.
Do you have experience in this? You replied to someone else, as well.


Calm down. I didn't suggest that you were spending frivolously.

But frankly, you'd have less of a problem if you were. Then you could just tighten your belt, and be done with it. But, rather, you accumulated a large debt that you cannot pay back in order to provide essentials (I'll leave out tuition) for your family. You need to figure out why that happened, and how to avoid it. That's not nasty or mean or anything else. Its a fact. Because even if you wipe out the debt, its going to happen again if you don't have a way to pay your bills. And if it happened because you lacked a safety net after a job loss or other problem, you need to start working towards figuring out how to avoid that in the future.

Experience? Yeah, I worked in the bankruptcy court for a while. And I've seen this happen far too often. Why does it matter? You don't like my advice, ignore it.
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amother




Copper


Post  Mon, Mar 20 2017, 4:10 pm
amother wrote:
Just think about it logically. I lend you 10,000. Then you say, sorry, but I can't pay you back. Take $3500 instead. You retain the benefits you got from the $10,000, whatever the were, I kiss my $6500 goodbye. Am I going to want to loan you money again? Will anyone else who knows about it?

Now, change the scenario a little. You agree that you'll pay me back every penny I lent you, but at a lower interest rate (so I won't make as much money on the deal, but probably won't lose, either). You may also take a little longer to pay me back. I may not be as happy with you as I would if there weren't a problem, but not as upset as the first instance.

In any case, you need to figure out why you have so much credit card debt, and what you're going to do to ensure that you don't fall into that rabbit hole in the future.



You're way overstating it when you say "will they ever lend you money again if you settle". The short answer is -YES. It will take around a year to get cc cards with low limits and within a few years a person can have normal cc limits. Also, if a parent or relative is willing to add you on to their existing cc card as another user, you can enjoy the normal cc use throughout the settlement process.
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amother




Plum


Post  Mon, Mar 20 2017, 4:32 pm
amother wrote:
[u]


I think you might be mistaken about this. Collection agencies are not hired by credit card companies. Collection agencies buy debt owned by the cc companies. So if I owe $1000 to a cc company and haven't paid in awhile, the cc company might sell my debt (while packaging it with thousands of other delinquent debts) to a collection agency who will pay the cc company, say $50. Now the collection agency can legally claim that they bought my debt and I owe them (instead of the cc company) $1000. Maybe I misunderstood what you wrote. Are you disagreeing with what I'm saying?


There are two ways credit cards handle unpaid credit. One is to pay pennies on the dollar to collection agencies; the other is to hire an agent to collect on their behalf. There's no way to know which it is without seeing the underlying contract between the two, ie, between the collection agency and the credit card company.

Which is why, when a collection agency claims you owe THEM your debt, the answer is, you're entitled to demand and inspect proof that they actually have a right to collect the debt, and in what capacity, before making payments.

Fwiw--none of which seems to be relevant to the OP
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amother




Slateblue


Post  Mon, Mar 20 2017, 5:08 pm
amother wrote:
If I could jump in here as I also have cc debt: what is the advantage to consolidation over settlement? Ive had cards which ive just settled for, for around 35% of the principal. Now I have a card for $10k and are looking to do the same. Is it better to consolidate it?


I'm the amother who posted about consolidating our debt.

A few points:

1. Settlement is viewed more negatively by credit agencies than consolidation is. In simple terms, consolidation is like saying "I know I owe you and I'm working to make it right" vs "I know I owe you, how would you feel about taking half?". Obviously credit card agencies are huge corporations and $10K is a drop in the bucket to them, but for you it establishes a pattern of behavior that is very important if you would like to repair your credit.

2. Consolidation forces you to face what led you into debt in the first place, settlement doesn't necessarily do that. All consolidation agencies will require you to do an in depth budget analysis before they take you on. (They want to ensure that you'll be able to pay your monthly fee). Remember that your cards get closed so you're really forced to budget with actual money only. If you got into debt due to extreme circumstances and no overspending at all, this may not be super important, but most people get into debt for lack of budgeting.

3. Be careful with settlement- the amount written off may be viewed as taxable.

4. DO NOT TRANSFER YOUR BALANCE TO ANOTHER CARD. Do not. You will end up in an endless pit of cards that you can't pay off. Trust me on this one.

5. When you close your cards, your credit score may drop slightly, but with lower interest rates you can pay your debt off quickly and your debt income ratio will improve- thus raising your credit.

6. Completion of successful debt consolidation may ironically be viewed favorably. For some agencies it shows that you are responsible about your money and debts.

Let me know if I can answer any other questions.


Amother slateblue
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amother




Pink


Post  Mon, Mar 20 2017, 9:23 pm
Slateblue-
Can you say what is the reason to not transfer the balance to another card? How does that lead to a bottomless pit?
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tymama









  


Post  Mon, Mar 20 2017, 10:04 pm
With such a small amount of debt, probably. It worth declaring bankruptcy. Can you transfer the balance to another card that has zero interest for first year. Pay as much as you can and then transfer the balance to another card at the end of the year. We did that with a couple of thousand dollars in cc debt.
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amother




Pink


Post  Mon, Mar 20 2017, 10:12 pm
tymama wrote:
With such a small amount of debt, probably. It worth declaring bankruptcy. Can you transfer the balance to another card that has zero interest for first year. Pay as much as you can and then transfer the balance to another card at the end of the year. We did that with a couple of thousand dollars in cc debt.


amother Slateblue above is vehemently opposed to balance transfers. I wonder why.
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gp2.0









  


Post  Mon, Mar 20 2017, 10:30 pm
I've also successfully used balance transfers with 0% APR for this purpose.

Wouldn't recommend for someone who doesn't have self-discipline and self-control to put a set amount toward the total every month no matter what, but since OP is paying her balance steadily every month it seems like a good solution to me. I dunno. I guess some people might figure that since there's no interest they can just forget about it for a year and worry about it then, and then yes, they would end up in an endless pit of cards they can't pay off.
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tymama









  


Post  Mon, Mar 20 2017, 10:44 pm
The point is to be self disciplined. Or why bother paying them off at all.
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amother




Purple


Post  Tue, Mar 28 2017, 12:17 am
amother wrote:
Slateblue-
Can you say what is the reason to not transfer the balance to another card? How does that lead to a bottomless pit?


I can't speak for slateblue, but from my personal experience, 0% balance transfer has to be approached with caution and self-discipline.

Why? Because there is a good likelihood that the new 0% card will have a lower limit than the current debt. Leaving you with two credit cards and available credit. And when the tuition bill comes, or the utilities are threatening to shut down, or you need groceries - it is very easy to rationalize using that open credit.

However, if you are very self-disciplined or you do it together with someone who will check your spending, it is definitely an option.

Additionally, many 0% cards have medium-high interest rates at the end of the promotional period, so you really have to be on top of making a new one in time. And hope you get approved for the amount you need.
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HonesttoGod









  


Post  Tue, Mar 28 2017, 10:10 am
Check out dave ramsey. He has a superb method to get you debt free and it really really works.
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