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    beoram's Avatar
    beoram Posts: 1, Reputation: 1
    New Member

    Mar 21, 2006, 04:18 PM
    Credit Card Debt - How to Get out of IT?
    I have a large credit card debt of $26000+ on a single card, and a few debts of $900-$1450 on three other cards. I am on a student fellowship, so I don't get very much money each month, but I really need to get out from under this debt - this month the interest rate seems to have drastically increased.

    I have been reading a lot of information online about how to get out of credit card debt, and every bit advice seems to conflict with every other bit of advice.

    A lot of people seem to advise negotiating directly with the credit card companies (for instance, and the e-book I purchased from this site ). But then there is difference in opinion about whether one should stop making payments for a few months and then negotiate or try to negotiate while making at least minimum payments each month.

    Others seems to advise one to use a CCCS, but then there doesn't seem to be any reduction of the debt, which I would like.

    Only a few people seem to advise using a 'debt negotiator', and they mostly seem to be people connected with the 'debt negotiation' industry.

    I really just need to get out from under the $26000+ credit card - the others I can pay off over a few months, and I would like to keep them operational. But I don't really have cash right now to offer to make a settlement for the $26000 one.

    I don't really feel like trying to negotiate with the credit card companies myself, which is way a debt-negotiator seems like an attractive option. But lots of people advise against them and it seems like they cost a lot of money.

    Someone also recommended Bud Hibbs ( ), but I can't tell what his programme is really.

    I really don't know what to do, and I don't know who to ask.

    Can anyone offer good advice?
    RickJ's Avatar
    RickJ Posts: 7,762, Reputation: 864
    Uber Member

    Mar 23, 2006, 01:39 PM
    Gosh lots of things to consider, but based on what you're saying about your debt vs. income I think you should consider bankruptcy. Even if you spent every available dime on repayment that would barely cover the interest.

    Go to CCCS and see what they tell you. They'll lay it all out, show you what they can and cannot do... then you can go from there. They're good at getting creditors to stop the interest, but there's no guarantees. Even if they are able to, you'd still have one heck of a row to hoe.

    My guess is that they may very well tell you that your debt to income ratio is so low that they can't help you at all... so it's back to bankruptcy.

    Note: Do NOT file chapter 13, file chapter 7.
    DrJ's Avatar
    DrJ Posts: 1,328, Reputation: 339
    Ultra Member

    Mar 23, 2006, 01:50 PM

    Which creditor do you owe that $26,000 to? This is a very important factor as to how you should proceed.

    And what is the interest rate and minimum monthly payment?
    wynelle's Avatar
    wynelle Posts: 184, Reputation: 21
    Junior Member

    Mar 23, 2006, 02:49 PM
    How much longer will you be in school? Can you get a part-time job prior to graduation? Is any of this student loan debt or is it some other debt?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692

    Mar 23, 2006, 03:32 PM
    First why a student could get 26 thousand dollars of credit on a credit card is beyond me. And why you would charge that much without having a way to pay it is beyond me also.

    But yes you get a part time job, pay on it, till you finish school, you then work two jobs if possible and pay it off as you can.
    DrJ's Avatar
    DrJ Posts: 1,328, Reputation: 339
    Ultra Member

    Mar 23, 2006, 03:38 PM
    Depending on who the creditor is, you may have a good chance of negotiating the balance (either you or a negotiation company) or negotiating the interest rate (again, either you or a company). Some creditors have great relationships with certain debt management companies, others do not. BK is always san answer, but realistically, if you can avoid it, do so. If you filed BK and didn't handle it right, it could be quite messy in the future.
    kp2171's Avatar
    kp2171 Posts: 5,318, Reputation: 1612
    Uber Member

    Mar 23, 2006, 03:50 PM
    I agree with wynelle

    You put yourself in this place. You need to work your way out. Not because you owe society, but because you owe yourself. You need to try to work through this... make the calls, see what they'll say. I fell behind on a debt once and was able to wiggle myself back out of it one month at a time, and I'm glad I did. Would've been TERRIBLE if I'd filed. It wasn't pleasant or comfortable, but you need to find a way to be more financially responsible. You're obviously trying to do the right thing.

    How much longer are you in school? Chances are its not a long term thing and you'll be earning more soon. What major/field of study?

    I HATE such loose talk about bankruptcy, rickj! Even if the debt balance doesn't diminish w monthly payments, if you can hold on a little longer you might be in a better place financially to start to knock this down and not get burdened with that terrible mark on the credit report.

    Sure, the report might show a high balance for some time, but I just think it's a mistake to file and forget it when there's work to be done.

    You may not feel like trying to negotiate with the companies, but you were willing to take their money. Suck it up. Try your hardest, if you really mean to do this.

    If you work and work and it all falls through, well I guess paying the price through filing is an option.

    I know it can be sometimes the only option. My cousin had to file after her child had terrible med expenses. Husband was working 3 jobs. They just couldn't get a break. But they, in my opinion, did all the dirty work to try to get out of that option.

    Make the phone calls first. You owe it to yourself.
    DrJ's Avatar
    DrJ Posts: 1,328, Reputation: 339
    Ultra Member

    Mar 23, 2006, 04:07 PM
    I definitely agree... this is what I do for a living. We help people find the right options to handle their debt (note: I have not and will not pots our link here lol). But still, BK is a last resort. Aside from that, with the new laws that went into place last October, it is difficult to even qualify.

    You may be able to negotiate... or you may want to pay someone to do it for you... unless this creditor is Citi, MBNA, or Discover. If it IS one of those three, good luck trying to negotiate without $10,000 - $15,000 on hand. No matter what a settlement company might say, you will be sued long before you can save enough money to negotiate that debt.

    And as for negotiating the balance while you are still making your payments... what makes you think a creditor will ever agree to that?? That's just not realistic.
    DrJ's Avatar
    DrJ Posts: 1,328, Reputation: 339
    Ultra Member

    Jun 21, 2006, 12:09 PM
    Quote Originally Posted by mjrBAY
    mjrBAY agrees: Really? Citi and MBNA are really that tough? Are you saying that most of the time someone will get sued from them before they do any negotiating???
    I wouldn't say that... it all depends on how the company handles it. The problem is that these companies usually won't wait that long for settlement money. A good settlement company won't approve you unless you are on a fast enough pay schedule to deal with this.

    I have secret shopped some settlement companies, created a pretty rocky siutation for myself. These guys were ready to sign me up on 4-5 year settlement programs with a bad creditor mix... absolutely no concern for my wellbeing... if I was a real client, I would have gotten my pants sued off!

    Lets say Citi is your only account... $10,000. Average settlement with Citi might be 50% plus the typical 15% fees... so I am looking at a total cost of $6500. That stretched out over 2 years is $270/mo. But Citi won't get paid for 2 years! Not going to happen.

    Now lets say I have Citi for $2,000; Household for $4,000; Chase for $3,000 and Wells Fargo for $1,000. In this case, the total needed would be more like 55% or $5500 (becuase these other creditors aren't as aggressive and will settle for less than Citi). So a 2 year program would be about $230/mo.
    Same time frame but since Citi's balance is only 20% of the total, instead of 100%, they will get paid in a lot less time... this would probably be a doable prgram.

    Good settlement companies will take all this into account in ordeer to devise a "successful" program. Anyone who doesn't, is looking to collect fees until you get sued and drop out (file BK or whatever happens). That money is usually non-refundable.. so your out $$$ plus your credit is hurting and now you have to file BK.
    Kahokamo's Avatar
    Kahokamo Posts: 1, Reputation: 1
    New Member

    Mar 11, 2008, 08:37 PM
    I was not a student at the time, but I've been there done that. By all means go to a credit counseling service and lay it out. DO NOT, repeat, DO NOT go to a credit counseling service that is not a member of the Better Business Bureau. Some of the more advertised services are lawyer based negotiation firms and will reduce your debt but in the process totally ruin any credit rating that you have left. They do not care about you or your credit rating. In my case,I used Clearpoint and it worked in my situation. They will work with the credit card companies to reduce, or in some cases eliminate, the interest on the debt. It may not work for your situation but checking it out certainly can't hurt...

    66bubby66's Avatar
    66bubby66 Posts: 5, Reputation: 1
    New Member

    Mar 29, 2008, 10:20 PM
    Kahokamo-did Clearpoint make monthly payments? I am currently with a negotiation firm and they are with the BBB - did my homework- but I have recently found out that they collect 15% of my o/s debt, on top of their monthly fee and it is collected first ,before the large creditors are called to negotiate with. I've thought about pulling out since I've only got about $2,000 tied up with them but it makes me sick to think of losing that money but I don't want to lose more.
    bluebirds_lady's Avatar
    bluebirds_lady Posts: 1, Reputation: 1
    New Member

    Aug 17, 2010, 10:50 AM

    I response to this post: (mjrBAY agrees : Really? Citi and MBNA are really that tough? Are you saying that most of the time someone will get sued from them before they do any negotiating?? )
    YES, they are. Thanks to my past experience with them. They are taking my State Income tax also!
    beachloverjohn's Avatar
    beachloverjohn Posts: 491, Reputation: 242
    Full Member

    Aug 31, 2010, 03:03 PM

    Credit card companies would rather get something than nothing at all. So figure out what your expenses are, from rent to utilities to food right down to gas for your car. Then add up all your income, and subtract your expenses from you income. What is left is what you can pay. You call them, tell them what you can pay and if they accept, get it in writing and pay that amount. If things improve, you pay more. If they get worse, you pay less, or as a final resort you file bankruptcy. Don't lose too much sleep over this, there are millions in the same boat due to the economy, and the CC companies know this. THey will work with you.

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