Alternative to bankruptcy?
noodle asked:
Does anyone know of something besides bankruptcy to get credit cards paid off? Any private investors that do that sort of thing…lend money at a low interest rate? I’m not even sure that we could file for bankruptcy because we are not behind on any payments. Some how we are getting by, but are having to charge stuff, because once we make the minimum payment we have no money left. We own a home, but hasn’t been long enough to get any equity out of….any suggestions out there??
Reader Comments
First, you need to put all of your credit cards away somewhere where you won’t use them.
Second, you need to create a strict budget and pay your credit cards off just as soon as you can. You should never use credit cards to live off when you’re short on cash – that’s a really bad habit. This will also allow to see what all your money is going each month.
Getting another loan to pay off your credit cards is also a bad idea. It’s robbing Peter to pay Paul and in that way you have not paid off anything because you still owe the money, now it’s just to someone else.
BK is for people that have more debt than they do assets.
Other answers make pure sense. Get RID of those credit cards and learn to live within your means (within your available income levels). For starters, try to negotiate with your card issuers for a pay off program with a reduced interest rate. Many will respond to such requests, rather than face a write off due to a bankruptcy. Don’t talk to a standard CS representative. Ask for a manager in loss mitigation or similar.
Don’t bother with seeking any sort of home equity loan. If you are like most homeowners, you have not gained any equity, due to stagnant or decreasing real estate values.
You truly need to gain control of your spending. Learn to live on LESS. (Yes, you can, if you really work at it.) Analyze EVERY item on which you spend money and determine if you CAN live without it (not if you WANT to live without it).
You can also call Consumer Credit Counseling Services at 1-800-388-2227 they are the largest and oldest credit counseling service in the nation and have offices in most major cities, they are also non-profit.
I used them several years ago and they lowered my interest rate and monthly payments, I was debt free in 36-months.
call the companies yourself and they will be willing to work with you, they want their money!
There are companies that will consolidate your credit cards, stop interest from accruing and any late charges. I think one is consumer credit counciling services. There are others. They figure a payment for all the companies to help you get out of debt. It’s often far less than what you pay for all the credit cards together now. Also a chapter 13 bankruptcy does this for you to. You still owe the credit cards and pay them back, but interest and late fees and such are stopped so you get them paid back sooner.
One bankruptcy no longer just erases your debt especially if you have the ability to pay, and does remain on your report for 10 years. The problem with getting a loan to pay them off is lets face it honestly you will use them again. Make a budget of what your expenditures are per month keep track of them, every dime and first see where your money is going, then decide what you can cut out. Is it buying those Starbucks coffees every morning? Is it that $10 for lunch everyday? Take a look at where you can reign in you spending then put the cards away
Spifman gave you a great answer.