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I know a lot of people ask questions on this but their specifics aren’t usually mentioned except some things that don’t pertain to us. So, my family is around $ 15k in C.C. and medical debt. We both had surgeries last year and our insurance sucked so our out of pocket was around $ 3k total.

We relocated because our jobs were being terminated and we both, luckily, got jobs but we took about a $ 30k hit in combined salaries. We are making ends meet in the sense that minimum payments are being made but it leaves no money for us to even buy groceries. We are on the edge because we do have a 3yr old and eating ramen is not an option. Though, we make too much for assistance. We do not own a house anymore and we have a paid off 2002 car worth around $ 5k and a newer car with a lease unfortunately. In better times, we’d be fine but we don’t see any raises coming within the next few years so we need to change something so we can breath and sleep at night without defaulting on all of our bills.

Any suggestions other than Debt consolidation? We have a average combined credit score (which dropped by 60 points within the last year) of 618 if that matters. Our goal is to pay off things without affecting our credit score negatively. Short Term solutions? Long Term?

Thank you for any suggestions.

2 Thoughts on Best case scenario for getting out of C.C. Debt?
  1. Reply
    November 1, 2011 at 7:11 am

    Get a book at your bookstore on
    Credit and Debt Repair.
    All the tricks are there – inclusing how to do a pay on delete on that medical bill.
    The $ 20 in a book and 2 hours of reading could save you thousands of dollars.
    It will tell you exactly how to negotiate, settle, reduce interest rates, and perhaps set up payments.
    These books are majic – not sure why people in trouble don’t get them.

    In the US there is an organization – non profit that can help you. – no cost for this.
    They basically do what the books tell you to do.

    Do not touch any company with the word negotiation or settlement.
    The complaints are horrendous – people wish they would have just paid the thousands to the creditors instead of making those companies filthy rich. Most people end up in court anyway.

    Note: The pay on delete on medical bills is tricky – do not ask here how to do it – you will need the best book you can find – make sure it is on the index of the book. If you have extra cash, you can combine a settlement with the pay on delete.

  2. Reply
    November 1, 2011 at 7:20 am

    People tend to be more selfish than honorable and today’s technology has made us aware of many examples of people wanting to live off welfare, frivolous lawsuits, bailouts, and big business paying for the things we spent money on. Many people are keenly aware of how costly a low credit score can be, in terms of job acceptance and higher interest rates on all future loans. My advice is the same no matter which reason you want to do the right thing, but my hope is that you realize the right thing is both more honorable and cost saving in the future.

    Your credit score is right at the bottom level of acceptable. Bankruptcy will kill your credit score. Debt consolidation tries to do a lot of what bankruptcy would so it naturally affects your credit similarly, though not as bad. Calling debtors and making payment plans or requesting 6 months of no interest or a permanent lower interest rate will help without hurting your credit score. Medical bills will be very lenient in accepting low payment plans with little or no interest.

    So call the CC companies and try to negotiate some savings on interest.

    Make a payment plan to pay something on the medical bills every month, even if it is just $ 30 a month, send them a letter stating that plan, and stick to it.

    Look to your bank and on the internet for credit card transfers or bank signature loans to transfer debt to lower interest rates. I have credit cards but when I incurred debt that would stay on a credit card, I found alternatives such as a lifetime 3.99% credit card offer. I have not paid it off yet because I have higher rate debt that I am focusing on paying off first.

    Always pay off the higher rates first to save interest rather than to get rid of a loan.

    Find ways to save money, such as combining coupons with specials and changing habits a little if it will save money, such as using a different toothpaste, buying snacks in bulk instead of from convenience stores and snack machines, drinking more iced tap water, scale back cell phone or cable TV services, cancel magazines and newspapers for stuff you can get off the internet, and swap some eating out for making the same things at home, like buying a Digiornio pizza instead of ordering delivery and spending $ 20 on some good steaks at the grocery store in lieu of ordering them from a menu at twice the price, plus taxes and tips you will not pay at the grocery store. Sure, there are other things that come with that steak dinner, like a cheap potato and roll that is so hard you never buy them at the grocery store. Then they charge you how much for that tea that costed them about 2 cents per glass?

    For long term savings, never lease a car. You will save some money month to month, which I admit is helping you now, but leasing means you will always make lease payments. People who save money drive cars long after they are paid off. For an example, the last 3 cars I bought were bought new and the last one I got rid of was 10 years and was only got rid of because it was wrecked. So I made $ 280 payments for 5 years and had 5 years of zero payments and just preventative maintenance like brakes, tires, and hoses and one repair to the windshield washer pump. Compare that to 10 years of leasing a similar car at maybe $ 240 a month and I saved a bundle. Oh, and I put 17K miles on my car annually and therefore would have had to pay excessive mileage fees had I leased it instead.

    For additional long term savings, buy a small car. They cost less in insurance because brand new they cost less and are smaller so they cause less damage. They also hold their value better. I always wanted to buy used economical cars, but discovered on cars at least 7 years old, the prices of economical cars were always higher than larger cars. I since started buying them brand new. They also save in gas. I calculated for my son that if he would buy a car instead of a truck, although the truck could be helpful when they move every year or so, he could save enough in gas in 1 year to rent a U-Haul for a whole week, even though it would be better suited for doing the job in just 1 trip so he could save the rest of the money and time moving.

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