STYLETHREAD -- LET'S TALK SHOP!

Luv2Shop · Kate Spade

Need advice about debt...long

Miss Mabel · Kenneth Cole

I'm sorry I don't have any advice, but I wanted to say I am sorry this is happening to you. I don't think anyone here would judge you for this -- it's a totally valid question and one I know a lot of people are facing right now. You're being smart to address it head on and work out a plan. There must be lots of systems in place for responsible people, and I'm sure you'll find one. Good luck!

pollyjean23 · Marc Jacobs

Depending on how long this sort of problem has been occuring, I would try to avoid consolidation because, if I remember correctly, it does hurt your credit score. Whether it is a worse hit than missing payments, I am not sure. I think it is worth it to try widdling away at the CC companies. They are beginning to land in the hot-seat, so maybe their habits will change. As for when to give up on getting the CC companies to work with you, I am not sure.

I am pretty sure that the debt counseling and consolidation industry is still unregulated, so it is difficult to find the right assistance.

My favorite resource for information about debt and basic financials is the website for the Motley Fool radio show. Motley Fool used to be carried by NPR (at least in my area), and I think their info is trustworthy and useful.

Here is their webpage about debt and personal finance:
http://www.fool.com/personal-finance/credit/index.aspx
They even have some self-study worksheets and guides you can try.

You have been doing what you are supposed to (calling to negotiate interest rates and payments); maybe there are a few more ideas contained on the website.

It is difficult right now, and I am sure this situation just exhausts you, but keep trying. Best wishes for getting out of this, and sorry you have to deal!

NCshopper · Hermes

I'm sorry you're in this situation. That really sucks. But the good thing is that you're doing something to get it under control and I think you're really smart to be skeptical of all the offers out there right now. It's sad that so many people get taken advantage of when they're in an already stressful situation.

Anyway, I just checked Suze Orman's website and she has a lot of resources listed under her "Resource Center." I would guess that any of the ones she lists are legit. Here's one that might help you find out what's best for you:

National Foundation for Credit Counseling
(800) 388-2227
www.nfcc.org
Also known as Consumer Credit Counseling Service (CCCS)
Based on your area code, your phone call will automatically be plugged into the NFCC office nearest you.

She also has a "2009 Action Plan" with a Debt Eliminator worksheet: http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=SP&SRCN=ap2009bridge&GnavID=95&SnavID=136

I hope this helps some.

-- Edited by NCshopper on Wednesday 20th of May 2009 06:45:10 PM

Suasoria · Chanel

If you're a just a few months behind on a few cards, I suggest trying to work things out individually. You might also look at card offers to see if you can transfer your balance(s) to a low-interest card, or transfer all your debt to the one credit company who is most willing to work with you.

I don't think you're a candidate for formal debt consolidation services at this stage.

Needless to say don't use the cards for the time being!

kenzie · Chanel

I would also suggest trying to work things out individually with the credit card companies. About 8 years ago, I tried consolidation and it actually ended up wrecking my credit. My score is finally back into the good range, but for years it was in the poor range, which sucked because I thought I was doing the right thing by consolidating, but it turned out to really wreak havoc on my credit instead. I couldn't get loans for years.

I'm sorry you're dealing with this. It's a really sucky situation. I hope you can work your way through it, but you shouldn't be embarrassed. Most of America is in debt and a lot of them are probably in a similar situation to yours.

Luv2Shop · Kate Spade

Thanks for all the advice ladies. I think DH and I are going to call the cc companies and work out plans with each of them as most of you advised. Then I am CUTTING THEM ALL UP!! :) I am definitely going to check out the debt eliminator guides you all posted. Thanks so much for the help ladies!!

greendiamond · Marc Jacobs

One thing that helped me was to put all but one credit card on minimum payment autopay. The other card I paid all that I could on, until it was paid off, then I removed auto pay from a card and did the same thing. The auto-pay ensures you don't miss a payment accidentally, which helps.

In the book, The Automatic Millionaire they have a simple formula to figure out which credit card you should pay off first, second, etc. to save you the most money by focusing on the 'correct' card first. I don't reall what the formula is, but a trip to the library or bookstore would solve that question.

Also, it doesn't hurt to order your credit reports and dispute errors or ask things to be removed. You may want to wait until your credit is on an upswing, and just do it once.

Aurora · Marc Jacobs

Sorry you are going through this. I haven't heard many good thing about consolidators other than like previously reported that they can wreck your credit. I think the one that Suze Orman recommends does things differently and won't do as much damage to your credit.

I would keep trying to work things out with your card companies and then see if you can find a card that you might be able to transfer all balances to. It might help to have everything in one place so you just have to worry about payments and balances on one.

Good luck!!

travelgirl · Kate Spade

Have you tried any of Dave Ramsey's methods? He has a podcast and a radio show about personal finance and some good ideas (although he can tend to irrate me, he's not as bad a Suze Orman). Another person to listen to is Clark Howard who also has a podcast and radio show (and is on one of the news networks on tv).

-- Edited by travelgirl on Thursday 21st of May 2009 11:10:12 AM

jah · Dooney & Bourke

NCshopper wrote:

I'm sorry you're in this situation. That really sucks. But the good thing is that you're doing something to get it under control and I think you're really smart to be skeptical of all the offers out there right now. It's sad that so many people get taken advantage of when they're in an already stressful situation.

Anyway, I just checked Suze Orman's website and she has a lot of resources listed under her "Resource Center." I would guess that any of the ones she lists are legit. Here's one that might help you find out what's best for you:

National Foundation for Credit Counseling
(800) 388-2227
www.nfcc.org
Also known as Consumer Credit Counseling Service (CCCS)
Based on your area code, your phone call will automatically be plugged into the NFCC office nearest you.

She also has a "2009 Action Plan" with a Debt Eliminator worksheet: http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=SP&SRCN=ap2009bridge&GnavID=95&SnavID=136

I hope this helps some.

-- Edited by NCshopper on Wednesday 20th of May 2009 06:45:10 PM

Second the Suze Orman. She is reputable. She actually is a spokesperson for FICO (the people that "invented" credit scoring and are responsible for the models that generate most of the credit scores pulled for credit granting from the 3 major credit bureaus), so she understands impacts to the credit score.

itsapinkthing · Coach

travelgirl wrote:

Have you tried any of Dave Ramsey's methods? He has a podcast and a radio show about personal finance and some good ideas (although he can tend to irrate me, he's not as bad a Suze Orman). Another person to listen to is Clark Howard who also has a podcast and radio show (and is on one of the news networks on tv).

-- Edited by travelgirl on Thursday 21st of May 2009 11:10:12 AM

I second Dave Ramsey. Hubby and I followed his plan, not quite as strictly but most of the baby steps. We were debt free in 18 months, and it was quite a bit (17k). It was work, and we had some lucky breaks. My understanding is right now creditors are more willing to work with you, so call and ask if they say no ask to speak with someone else, keep asking. You have to be able to be comfortable with how much goes out, and make sure you can live. Sometimes it is more important than your credit score.
That said the Fico forums on myfico.com have lots of useful information.