How can i settle my debt with multiple creditors harassing me every week?
mixed & beautiful asked:
I owe about 2 grand of debt to different debt collectors. I work and attend college like most young adults my age, but does not make a lot of money every 2 weeks. I really want to get rid of my debt but does not know the best way how. What should I do?
I owe about 2 grand of debt to different debt collectors. I work and attend college like most young adults my age, but does not make a lot of money every 2 weeks. I really want to get rid of my debt but does not know the best way how. What should I do?
Tags: Creditors, Debt Collectors, Money
February 7th, 2010 at 9:26 am
yeah, PAY your bills, YOU ran them up, YOU PAY THEM! Get a second job, quit school and work to make the payments!
February 10th, 2010 at 3:39 am
I have found that they cannot legally cal on you when you have asked them to stop. Good resources can explain what you can do to get them to stop.
It’s against the Fair credit act for them to continue harassing you. Good luck.
February 13th, 2010 at 11:55 am
Pay what you can when you can, at least the interest and fines. Focus any excess funds you have on the smallest bill so that if you get that one paid off, you can add what you were paying that one to the next smallest. Some people say to focus on the debt with the highest interest rate but it may be better to get rid of one debt as soon as possible so that you can pay down the next one faster. After a while, the credit card companies may offer you hardship programs that would put the interest rate at 0% for six months to help you get back on your feet but they won’t do so if you haven’t at least been making an effort to pay.
You could go with a debt counseling program, they have programs already negotiated with the creditors and your payments would then go to their program and they would handle the distribution of the funds. It shows on your credit report as third party assistance and the debt counseling company would charge a $75 fee for the paperwork. Check the company out on the BBB because there’s a lot of people trying to take advantage of people in need.
There are companies that do what’s called debt settlement, they advise you to stop paying your bills, pay a certain amount every month into a separate savings account from which they deduct a monthly fee till they’ve collected 15% of your enrolled debt and they advise you to allow your debts to go into arrears. They then they try to negotiate a settlement with the creditors to settle for what has accumulated in your savings account. The problem is, it’s still you who are liable and the creditor will likely sue you for the outstanding debt. They may settle for less than the debt but if they do so, you have to pay income tax on the difference. The debt settlement companies say they can have the fees and fines since enrollment waived as part of the settlement but that’s just what they say, the creditors may not wish to waive the fees and fines. One was calling me and it sounded like a good deal but the BBB listed it with an F rating, the Texas attorney General was suing it, and many magazines and news shows such as ABC’s Nightline did features on how they made matters worse. They don’t do anything that you couldn’t do for yourself though they claim to bundle you up with other people in arrears for more leverage in negotiations. Many of the articles said that less than 1% of the enrolled people finish the program, they will say that many people leave after some of their debt has been settled and that’s why they have a low completion rate. I don’t know, it may work, but it sounds like you take all the risks and they collect money up front. If you are going to try and negotiate settlement of the debt, you might be better off just opening up an account and putting a set amount into it every month plus any surplus then using that the accumulated funds to settle some of the debts, at least you would be 15% ahead of working with the settlement company. I don’t know, it seems to me that if you start playing dirty with the creditors, they will start playing dirty with you too.
Keep in mind that two grand is nothing, the average credit card debt in America is in excess of 20 grand. You could probably hold a series of bake sales to cover a 2 grand debt. Take some solace in the fact that you’re not alone, there’s plenty of people struggling right now and it’s probably going to get worse before it gets better.
February 15th, 2010 at 11:29 pm
get a second job to pay this off. A lot of stores are hiring seasonal workers for the Christmas holidays. You don’t want bad credit (or grammar) haunting you for the next 7 years.
February 18th, 2010 at 3:31 pm
get a 2nd job or ask for more hours. $2,000 is peanuts. you should have that paid off by christmas.
pay smallest balance first and then next smallest balance. then you stop the calls faster.
February 20th, 2010 at 6:16 am
Stop making payments and stop using your credit card and plan to negotiate with them when you see their tone change and they will want to settle to get something.
Hope this helps.
Rob
February 21st, 2010 at 7:04 pm
First let’s congratulate you! Two thousand dollars isn’t much in comparison with someone else in debt. Well if you want to pay it then you will have to increase your hours at work. Most likely you will go part time to school or you may just work full time job and go to school full time.
Start with the small amounts first. Pay them off ASAP. For the bigger ones make payment plans with them. You may be able to get a second job (if you put your schooling on hold). You could even pay some of the smaller ones off then during tax season pay those bigger ones off. I’d recommend doing some payment plans if your intentions are paying off those accounts.
February 23rd, 2010 at 8:42 am
First you need to stop spending money that you don’t have. Please do not consolidate or use a debt reduction company . It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.
A. Have a garage sale and sell anything that you no longer need or want.
B.Get a temporary part time job, if you have one, get another. The wife too. When my kids were small, I worked at night to bring in extra money so that I would still be there for them during the day.
Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.
2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.
3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:
To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment
Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment
Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.
4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.
5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.
You can do it and it isn’t as hard as you think. Just follow the plan.
February 23rd, 2010 at 5:53 pm
1. plz refer 2 the fair debt collections act.
2. another thing u might want 2 know is that u have the right 2 deal only w. original creditors & elimin8 collection agencies. in doing so collectors don’t get pd out of yer $$$ b/c u send it right 2 the original creditors
3. u can order a copy of yer credit report & use yer credit report info 2 repay
original creditors b/c the acct names/#’s along w/ creditor contact is all there.
TIP;
the best way 2 deal w/ original creditors is by sending a copy of yer last bill along w/ the pmts. just start sending pmts; don’t call, just start sending the pmts
REMEMBER, NEVER drop out of college!!! classes help prep u 4 an even BETTER job so u can earn MORE 2 repay creditors!!!!
February 26th, 2010 at 9:52 am
Lucky for you, you dont have too much, although when you in school and your focus is on studying and not working it can sure seem like a lot.
Are you behind on payments?
One option is to let it fall behind and then call them up and settle.
I got a newsletter called “the Debt trap” detailing the debt industry and it kinda freaked me out, so I settled all my cards, but I was much deeper than you.
2nd option is keep up the min. dont use it anymore and when you get out of school, land a great job and pay them off.
hope this helps