How to Clear Debt?

clear debtMy husband and I are in about $11,000 worth of debt. We barely have enough for our bills. I budget weekly and we are doing everything we can….but unexpected expenses keep popping up and it’s just really hard to get this debt cleared off! I’m feeling very frustrated and scared. What can I do? A man from one forum told me:

I’m with you! We were just making it and then due to unforeseen circumstances we could not pay our largest credit card bill this past month. I’ve been on the Dave Plan for almost 3 years, but have gone through my emergency fund for emergencies. I called Bank of America to explain my dilemma. They forwarded me to a debt management company. I spoke with them at length, they did an eval and quoted me a monthly payment almost $300 a month higher than what I am paying on my own. The reason? My credit is good, my interest rates are lower than what they can offer! They suggested I call Bank of America back to look into “internal hardship”. I did so, they looked and also said that I now have better than what they can offer me. Therefore, I have to wait for my credit to tank to get any help! And even then, it’s pretty much what I’m already able to do now.

If all goes well, I should be barely back on track now but will be unable to make up the late payment. You’d think they would just ‘reset’ the account after a few months. Nope. Both the DMC and BOA advised bankruptcy if I can’t become current. My credit score is a 728 right now. What judge is going to allow that to go through? Plus, I WANT to pay my debts. The stinking company just isn’t giving me any option!

So while I can’t offer advice, I can empathize! It’s awful! My credit score is a 728 right now. What judge is going to allow that to go through? Plus, I WANT to pay my debts. The stinking company just isn’t giving me any option! Just to clear some things up… the judge does’nt decide whether or not to allow a bankruptcy to go thru based on your credit score. Many people file bk with no late payments. You list all of your income vs all of your debt and if it doesn’t work that is what determines if you can file or not. Also I will add that the majority of people who file bk WANT to pay thier debts but are unable to. Sure there are a few who work the system, but the vast majority would much prefer to be able to pay thier debts then have to file bk.

Did either of you look into a Consumer Credit Counseling agency? These are non-profits that help people with credit issues. You can find one here: http://www.nfcc.org/

My husband and I got in over our heads with credit card debt. He had made some late payments, and they jacked our interest WAY up to the point we would never have paid these off.

The credit counseling place made a debt management plan for us. They took all of our credit card debt, and negotiated with each lender individually to get MUCH lower interest rates and how much we would pay each month. Our part was to close the credit card accounts and agree not to open new ones. The payment for the credit cards is transferred directly to them every month and they make the payments. Our monthly payments were much less than we were paying (remember that our interest was jacked WAY up) and we are paying the cards off much faster due to the low interest rates.

The whole program is completely voluntary and we can withdraw at any time, however our interest rates would go back to what they were before. It is also completely free – I think there is a tiny charge to us for them paying the cards for us – I mean tiny.

It has not damaged our credit score, however, it was something that didn’t look to good for us when we attempted to get a mortgage this year (on a second home, so it was iffy anyhow). We’ve been part of this plan for almost 2 years, and it is one of the best decisions we ever made.

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