Question : should my husband and i settle our debt or should we go through a debt consolidation?
We are about $2300.00 in debt with alliance one and i think $900.00 in capitol one. We have a debt consolidation with Federated Financial. But I was thinking that maybe we should just settle with both of the debts ourselves because federated financial charges $29.00 a month and it will take us like 3 years to pay it off, if we go through them. What is the best choice?
- asked by cindi_chean
All Answers:
Answer #1
If you "settle" by paying only a portion of thedebt, the debt will come back to haunt you inseveral years when the bank sells the bad debt toa collector. It is best to pay off the entire debteither through your payment plan or to pay off theentire remaining balance. $3200 isn't that muchmoney. If you don't want to pay the $29 fee, thinkabout getting a part-time job and earn extra moneyto pay off the balances sooner. If you can, paythe smaller debt off first, then you can focusmore money on the larger debt. Good luck!update:The fee does seem high. I don't know if it'spossible to transfer to another debt managementprogram, but I always recommend Consumer CreditCounseling Service. They are reputable,non-profit, and nationwide. Their fee may belower. Link below for the Atlanta office, but youcan find one closer to you.
- answered by PelMel
Answer #2
I would stay away from the debt consolidationplace. Do you work? If not get a little parttime job- If you do work get a second job (I knowyou don't want to but its only temporary). Payall extra money to your debt. Look at your budget(if you don't have one you can download free formsfrom www.daveramsey.com (he is a financialcounselor). Look over you budget - perhaps youcan divert money from your grocery fund etc andpay off this debt. $3200 isn't a ton of money -you can pay it off !!
- answered by r&s mom
Answer #3
First of all you are looking at about $3,200 incredit card debt. That is not really all thatmuch in the larger scheme of things.If you were topay $29 a month for three years to a consolidationcompany, the fees would add up to: $1,044,approximately 1/3 of your debt. There is nojustification for that kind of expense.If youdedicated that $29 a month extra to paying off thecredit cards, it would make you debt free faster,and help to improve your credit rating and score.
- answered by cbmttek
Answer #4
I would just get a personal loan to cover the$3200 and pay off the debt. This way you don'thave to worry about the credit hit you would getfrom "settling" your debt. You also won't have toworry about a monthly fee that doesn't go towardsprincipal or interest. You can get a personal loanrather easily using P2P lending. You can get a$3200 loan and have about a $100/month payment.Here is the site that I use,https://secure.lendingclub.com/landing.action?referrer=samoan3d . It is free to sign up and get arate quote, so you don't have to worry about acatch. If you sign up, let me know your usernameand I will try to help fund your loan.
- answered by samoan3d
Answer #5
Debt Consolidation usually costs you more in thelong run.Don't settle, forgiven debt counts asincome on your taxes.1. Pay off the highestinterest card first. If you cannot, find a zerointerest card that will let you transfer thebalance for a year.2. Repeat Step 1 until they areall paid off
- answered by Feeling Mutual
Answer #6
Coming from someone who has perfect credit: andnot rich - there are a few things I neverunderstood. If you have debt in the amount of$2300 - why would you PAY somebody for debtconsolidation. that money could go towards yourcredit card. I would just keep paying on thecredit card - learn to live within yourbudget...and maybe try putting more towards creditcards. I would NEVER dish out more money then Ihad to. and search around for good rates oncredit cards until it is paid off
- answered by ★★★ Katharine ♥♥♥♥
Answer #7
You can save paying on the interest by makinghigher monthly payments than the minimum on aregular basis than you need to. This will alsocuts down the number of years you will be payingon the loan significantly.Have you ever put muchthought into refinancing your original mortgage onyour home? If so, you should pay attention to howmuch equity will be left in your home if you do gothis route. One popular way of dealing with debtis to transfer one credit card balance to anothercard. Before you do this, check the maximum limiton the cards, and go with ones with a low APR.Stay away from cards where the APR is not high forbalance transfers. Get in contact with a nonprofitservice such as American Consumer CreditCounseling. They can negotiate lower payments andmake it so that you pay all of your bills bywriting just one check to the agency each month.
- answered by Angie L
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