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How to take control of Credit card Debt

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vfongmakeup



Joined: 25 Jul 2007
vfongmakeup's page
Posts: 1



78 Magic Points

Subject: How to take control of Credit card Debt
 
Posted on Wed Jul 25, 2007 2:34 pm  

I recently bought a house and now I am finding it harder and harder to make a min payment on my cc. What are they bets options, to get control of my cc debt? Can debt consolidator really help? I only have one credit card-but with a pretty big debt. Will having a debt consolidator look bad on my credit?
Morningstar

Morningstar

Joined: 17 Apr 2007
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11 Magic Points

 
Posted on Wed Jul 25, 2007 9:30 pm  

I understand debt consolidation to have a negative impact on your credit score while you are in the consolidation process. Once you complete the process, the score should rise, as the debt would be paid in full.
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Tomtastic25
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Subject: Debt Consolidtion
 
Posted on Thu Jul 26, 2007 6:33 am  

Hello,

Debt cons, has a few downsides. You will pay 15%- 20% of the savings to the debt consolidator. Most will make you put the funds in a trust acc or send payment to the debt co for a few months. Thus they get paid before any work is done.

The regular turn around is 4-8 months. You must fall behind in payments to you credit c cos first. After a month they will begin to hound you. After 3 months they will bother you almost daily. If you let them believe you have no money, eventually your account is sold to collections or a attorney. They are the ones who will settle with you at 30-55 cents on the dollar.

If your savings is more than a thousand dollars ex: You owe $10,000 and settle for $6500, you saved $3500. They would send you a 1099 form that is turned into the I.R.S. this $3500 is considered income to you. They wrote it off, and you pocketed the $3500 thus you earned $3500 and are now liable to pay the income tax on this as well.

Questions for you. What is your credit score? How much do you owe? How much do you earn? If it is fair maybe you could get a 0% balance transfer. Or you could go to a credit counsel service and they can get a lower intrest rate for you. Think long and hard before doing anything. The credit score could take a big hit. After the charge off you would probably look at 1-4 years of credit file rebuilding.
Tomtastic25
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Subject: debt consol
 
Posted on Thu Jul 26, 2007 6:36 am  

You could do this yourself and save the 15% 20%
Morningstar

Morningstar

Joined: 17 Apr 2007
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Posts: 576



11 Magic Points

 
Posted on Thu Jul 26, 2007 6:42 am  

The debt cons. that Tom mentions is actually called debt settlement. It is ususally the last step to attempt before filing bankruptcy. Everything else stated is accurate, esp DIY saving money (even non-profit credit counselors have "donations").
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stella12



Joined: 27 Jul 2007
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158 Magic Points

Subject: HI
 
Posted on Fri Jul 27, 2007 5:18 am  

Debt is neither good nor bad. It's necessary to purchase the things that we need. But how much is too much?

You must analyze how much debt you are in, what you can afford and what you can trim off. Pay your debt off as quickly as possible. Consider substituting tax deductible interest loans for credit cards with high non deductible credit card interest. Consider buying things with cash. Finally negotiate or shop around loans for the best rates.

Stella

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Laura

Laura

Joined: 21 Jun 2007
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Posts: 1327



36215 Magic Points

 
Posted on Mon Jul 30, 2007 3:32 am  

Thanks a lot Stella
Quote:
You must analyze how much debt you are in, what you can afford and what you can trim off. Pay your debt off as quickly as possible. Consider substituting tax deductible interest loans for credit cards with high non deductible credit card interest. Consider buying things with cash. Finally negotiate or shop around loans for the best rates.


This is a real good piece of advice
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Regards,
Laura.

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