So, against the advice of many, I entered a debt consolidation program in 2003. After they said I'd be completely out of debt in three years, I'm barely halfway out, so I decided to get out of the program and pay it off myself based on a new budget my wife and I have planned. The lady at the place said I was making a mistake since the APRs I was given in the program by the credit card companies will rise. Would it be worth my time to call each one of them and let them know I was out of the program but to see if I could keep the same rate? It'll probably only add another month of payments, but with the money we're currently making now, we could have all of these paid off by the end of May so I'd really like to keep the lower APRs. TIA.
why don't you just stay in it and pay more to finish paying them off. Is there a max you can pay monthly?
Not me. For one thing, they're charging me $35 a month to even be in the program. Another is that what they're paying is over the minimum. I'll initially save around $150 a month by working with the credit card companies directly, which I am using for our savings. Basically, we're taking my paychecks and paying the bills, minimum payments on debt, groceries, gas, and personal spending money (set amount every two weeks). What's left over from that is put into savings. All money my wife makes is going directly to debt. We put the money in a special account and when she makes enough to pay off a certain debt, we're calling them and paying it off then and there. This will get us out of this debt by May and completely out of non-acceptable debt (car payments) by September.
You can make your own deals with the credit card companies....these debt companies offer nothing....just do it yourself. But stick to the plan... DD
You're absolutely right. RM95, you're paying to be in the program? WOW. I knew there had to be a catch to this. If it is not too much to ask, can you email me a ballpark figure of how much you're paying and how long it will be? I am looking into it, but didn't know that they would charge $35. That's too high for me... I guess I can keep paying monthly separately to each company. I'd say STAY IN IT if it has been working.
I just got my bills paid off this year from a five year plan. Pay more than they request you pay, tell them where you want the extra money to go. We always sent it to the card with the lowest balance to close them out first. Once we had fewer cards to pay off, bigger payments brought the other cards down fast.
Considering they told me it'd take three years and it's been over that, but I'm only halfway paid off, I'd say no, it's not working. Total, it was less than $500/mo.
Never heard of that one, but if they told you you'd have it all paid off (according to the payment schedule THEY set up) by a certain time and it isn't, that sounds kind of fishy. Of course they will tell you that it's a bad idea to finish it off yourself because there goes their monthly fee. If you're sure you can pay it off yourself, I'd go ahead and do it. For the record, I only recommend CCCS. That's the one I used and I actually paid my debt off before they told me it would be paid off. Their fee was only about $15 a month. I can't vouch for any other service.
Funny, my wife was using them before I met her and they only made her situation worse. The case worker did not keep in touch with her creditors for her, and she got a charge-off while under their "care."
I see a lot of people who have gone to these debt consolidation groups only to find themselves WORSE off then when they started. Generally, they file a bankruptcy anyway. It sounds like you can get out of the debt on your own RM95. My opinion generally is that these companies prey upon people who seek actual help and they use them for what they can and don't really make the situation better. I would recommend that you look at the plan that the consolidator prepared and find out WHY you are only half done after 3 years. Something seems fishy.
the problem is that if you pay more than you negoiated, the credit card companies won't accept the new rates/payoff. because if you pay more then obviously you should have. and the negotiations are based on a program where they take all or you bills and income and calculate. based on the results they ask for lower rates or to forfeit previous interest accumulation etc... so how if you have agreed to certain terms and they give you a break, but you pay more than you said you could. well they will cancel there agreement and raise your rates and ask for all the forfieted interest etc... there is no easy answer. credit card companies are the devil no question about it. and unfortunately they prey on consumers and we fall for it. what they do is not illegal so there is no recourse. you charged it and you have to pay for it. there is no magic formula to make them go away but i can give a bit of advice to people in this situation. it can seem like an unwinnable battle when paying off debt so your only chance to feel the relief while enacting your plan(or the is managment company plan) is to payoff the smallest debt you have and watch as they decrease from 5, 4, 3, 2, 1 . trust me at each step you will have accomplished something and more importantly you will feel that you have. giving you motivation to continue. 3 points: 1. payoff the smallest debts in order. in some cases the higher interest debt can be attacked but they are usually larger so it's a catch 22. 2. pay slightly over the minimum on the other debt's to maximize your focused attack. 3. when you pay a debt off you use the extra money and use it against the new lowest debt. continue that pattern. that is basically what i did and i am happy to say i just paid off my last cc in jan. good luck and hopefully you will never get into that situation again.
It's a mix of them not knowing how to do math and me being stupid by not checking it when I signed up. I am very lucky that we have come up with a good plan to be out before the end of the year. Should've done this a looong time ago.
OK, I'm not familiar with all your specific debt, but based on this, I'd recommend two changes: 1. Unless you absolutely NEED the savings part (for emergency funds or anything like that), I would just put all to paying off debts. 2. I'd also suggest just paying down whatever is the highest interest with whatever she has extra as soon as she has it, rather than saving it to clear out full debts. At the end of the day, you'll end up with more money this way.
1. The only reason we're doing it this way is that what we're putting in savings is also going to things that we want to do this year like Vegas in May and our family trip in July. I know, I know, maybe we shouldn't be doing these things when we're trying to get out of debt, but since we'll be out this year regardless, we figure it's worth it especially considering we won't be creating an extra debt by using savings. 2. That's what we're doing. I still can't believe how long I've waited to do it this way. I've been going through my head how much we're going to pay off in the next month alone. It's mind boggling to me.
Most people advise to pay down the higher interest debts first. However, I subscribe to a different theory. I prefer the Dave Ramsey debt snowball method. Pay as much as you can towards the smallest balance first, while paying the minimum on all others. Once you knock out the smallest balance, add that payment to the next smallest balance, and so on. It really works well.
I kinda prescribe to paying the one with the highest minimum payment first. Most of the times, that's the biggest one, but one some of mine, it's not.
