In desperate need of a kind soul with lots of financial knowledge and a the time to read my story.
Today, I found out the hard way that my wife of 1 year (girlfriend/fiancee of 7 years) is in a LOT of credit card debt. She had managed to keep it from me all this time but today checking the mail I saw something that peaked my interest and confronted her.
After a lot of yelling, cooler heads finally prevailed and I realized the situation needs to be addressed NOW. She has about $9,000 in debt racked up among 8 different credit lines, and the interest rate on a couple of them are insanely high (20%!).
I have never had any type of financial issues so I am at a complete loss on how to handle this. As it is, the majority of her paycheck goes to just paying the minimum payments and with the high interest rates, the principal amount is barely going down. The debt will never get paid off this way!
I've read mixed reviews about using debt consolidation. Some say it'll lower your payments and put everything in one convenient bill but some say it's a total scam and will destroy your credit.
Some say Bankruptcy is a better option but at this point she's not deliquent on any of her accounts. Like I said, she CAN pay the minimum each month, but it leaves her very little left and the debt isn't going down very fast.
I've also read that you can call the various credit card companies and negotiate a lower interest rate, but I'm not sure they would do this since she's still paying them every month.
Lastly, I heard going to the bank and trying to get a debt consolidation loan yourself is a good idea. I'm not sure if we'd get enough to cover the debt because I have no idea where her credit is at but so far this seems like the most sane idea.
Ok, that being said, please help! :-(
We have already resolved to buckle down and do a budget. I've always been able to keep a budget but she can't, but that's going to change now that I actually KNOW about this debt. But right now I'm wondering what the best course of action is to get us out of debt ASAP! It seems that just paying the 8 credit card companies as much as we can every month will work but take a while. I'm in for the long haul but if there's a quicker way I'm up for it!
Thanks in advance!
$9,000 is not a big deal at all.
If any are seriously past due, you can call them and make an offer for much less than she owes. Just make sure to get the agreement in writing, then mail a money order (not a check) along with a copy of the letter. Keep the original letter and copy of the money order FOREVER.
For the rest, make all the minimum payments every month. Take EVER EXTRA DOLLAR you have and put it to the lowest balance. Once that is paid off (which should be quickly), start applying that amount to the next one. Continue the debt snowball until you are out of debt.
To do this you have to cut out ALL unneeded expenses. Don't eat out, don't buy new clothes, get rid of the cable, get rid of the cell phone, etc..
If needed, get an extra part-time job (or two).
Just buckle down and pay it off. IF you booth work hhard at it you could easily pay it off in less than a year.
In the meantime PAY ONLY CASH OR DEBIT for everything.
DON'T CONSOLIDATE. Rolling everything into one payment does NOTHING to get you out of debt, and it frees up all those credit cards so she can charge up more junk. Your problem is not having to write a bunch of checks each month so consolidation won't help.
Well If you have money problem and u want loan. some days before my friend having very bad financial crises so while he was searching on Internet for Bad credit loan he found a site which contain link for Geniune lender for Bad credit Loan. He checked all 8 links in that each link offer different interest rate and repayment time.
My Friend got loan of 25000$ for 15 years on 3% interest rate which should be payed annually.
Well you go to
Dixiloan.com
then go to Personal loan or Bad credit loan according to ur credit score
Check all 8 links in that in search of lowest interest rates.
Take Care
Bye!
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She didn't get into debt overnight so won't get out of debt overnight either. First thought... forget bankruptcy. For around $9K of debt, it's not worth messing up 10 years of life with credit and a whole lifetime of reputation with "Have you EVER filed bankruptcy?" ... Bankruptcy can affect insurance, employment and housing options for a long, long time and just because you think you qualify, odds are you won't. There is a legitimate service called Consumer Credit Counseling that can help reduce interest but a consolidation (not settlement) could be a good option for you. You will take the loan and make fixed payments at a fixed rate for a fixed amount of time (and hopefully make more than minimum payments to accelerate the repayment). Sure you can call credit cards and ask for lower interest but the interest isn't the big issue here... what's 10% of $9,000? You are worried about $900 a year in interest when you've got $9,000 of debt? Every little bit helps but don't focus on it. Focus on paying that debt within a year or two making all payments on time without trying to go for some "creative financing" program. The big problem is that you are fighting over money (like most people) and you feel she kept you out of the loop on her financial problems. Get over it. Unless you personally cosign a consolidation (don't do it) her previous debts are her debts and not yours. Taking a new loan to repay old loans won't solve the spending problems. You may end up with a new loan and continuing to charge and/or sign up for new accounts. Why not call the credit card with the lowest interest and ask if they would do a balance transfer for the whole $9,000 of debt in order to keep your business. Insist you will not pay a balance transfer fee of any kind. If no, go to the next lowest interest rate creditor. Sure a bank or better yet credit union is an option but no matter what you do, cut up (DO NOT CANCEL) all of the credit cards except one for ID and emergency only. You want to make sure to keep a good credit score and cancelling cards won't help you at all. You still owe $9,000 whether it's to one creditor, 8 creditors or even 9,000 creditors. You should work together on the problem of debt but also realize if you are fighting over money (most people do) what else will you fight over in a year, two years, five years, etc??? You are on the right track but make sure she's on board or you are going nowhere with the money issues or the relationship. You can do it. Check out the advice of Dave Ramsey (tv show or library books) to create a plan for repayment, not avoidance. Pay off those debts one by one and don't add to the problem. Again the interest rate is not the biggest issue here especially if you are determined to pay off those debts in a couple years. Save your fighting for something bigger in life... like how you feel about her family. LOL.