7 Thoughts on I am drowining in debt owe almost $25000 dollars, how good would be getting into Debt consolidation ?
  1. Reply
    Jay Randell
    August 7, 2012 at 11:25 am

    You owe $ 25,000 in Credit alone??? I would go insane if I owed $ 4,000 dollars. Seek a financial advisor sir.

  2. Reply
    David M
    August 7, 2012 at 11:43 am

    Consolidating debt is not the way to get out your mess. All it does is move the debt around, not get rid of it. Better to change the habits that got you into all this debt. Send less and earn more.Live within your means. Good luck.

  3. Reply
    August 7, 2012 at 12:22 pm

    Debt consolidation companies charge you a monthly fee which would be far better paid off one of your debts. Those companies are in business to make a profit – out of you. Anything they can do, you can do yourself, for free.

    List all your debts, highest interest rate first. Cut your spending and look for ways to earn more, so you can pay extra off one of the debts, minimum off the others. The more you can pay, the quicker you will get the situation under control. Alternatively, if you have a few smaller debts, pay them off first, quickly, to leave you with fewer debts to handle. Even then, keep paying back as much as you can. That gets the debts down faster and also mean less interest to pay.

    I did my own consolidation by getting a loan from credit union and clearing all my other debt. That will only work for you if the rate of interest charged is lower – otherwise there is no advantage. I needed to borrow less than you, and by repaying weekly I became debt free in less than 5 years.

    Dogged determination will do it. Good luck!!

  4. Reply
    August 7, 2012 at 1:11 pm

    not very. moving debt around does not reduce it.

  5. Reply
    August 7, 2012 at 1:54 pm

    CCCS/NFCC is a non profit organization that was set up by the credit card industry to offer assistance to people who are struggling to pay their credit card debt…and who may by considering filing for bankruptcy. They can offer reduced payments and interest (but note settlements for less). http://www.nfcc.org
    As a general rule, they can reduce your total monthly payment down to 2% of your total debt…so with 25K in credit card debt…your total payment would roughly be $ 500. They can also reduce the interest to around 10%. You have one payment that goes directly to CCCS and they distribute the money to each creditor.
    – Enrolling in this program involves closing all your credit cards so that you can’t use credit again. Your credit report will get updated to “enrolled in debt management.” This does not specifically damage your credit…but it will make it hard to get any sort of new credit…like being approved for a car loan.
    – NFCC is a good program if you are just at the point of getting over your head with debt. If your cards are near/at or past the point of default, then you are far better off trying to negotiate settlements directly with your creditors…assuming you have the money up front to settle in the 25 – 50% range.
    – As bad as bankruptcy is…there are times when filing for Chapter 7 is in a person’s best interest. While CCCS is a legitimate service, keep in mind that this organization is sponsored by the credit card industry. As such, they are primarily advocates for your creditors, not you…so their default answer might be to never file for bankruptcy. Not sure what your income is, but if this $ 25K in debt is overwhelming and beyond your ability to reasonably pay back…to where it’s creating a financial emergency for you, then you should really be considering Chapter 7. There are some people who like to exaggerate the negative effects of bankruptcy. It does not ruin your credit rating forever and you can have good credit again in as little as 3 years.

  6. Reply
    August 7, 2012 at 2:45 pm

    Yes, debt management is by far the most popular method to resolve credit card debt. Debt management is often referred to as credit counseling as well. It’s important that you stay away from debt settlement though, as that program would ruin your credit. Expect to have a payment of around 2% when doing debt management, whereas paying the debt on your own would make a payment of around 3%. Settlement on the other hand, would give you a payment of around 1.5%. If you have any questions, let us know 🙂

  7. Reply
    August 7, 2012 at 3:36 pm

    there are companies/agencies that offer counseling and can assist you about credit consolidation. check some website regarding your concern.

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