Getting rid of DEBT!

[Ish]

Man, I've been trying to formulate a plan to climb out of debt for a while now.

Between school loans and old bad spending habits on credit (mostly vinyl), I racked up a hefty little ammount of debt.

I am thinking of just applying for a loan and paying it all off with that and consolidating everything at a good APR.


I have looked into agencies that do this, and it seems shady and your credit rating goes way down.

I have always payed my minimums on time so right now my rating is decent.

Anyone have experience with getting a loan?

I am looking to find a decent bank here in chicago.

[JMJ]

Originally posted by Ish:
Man, I've been trying to formulate a plan to climb out of debt for a while now.

Between school loans and old bad spending habits on credit (mostly vinyl), I racked up a hefty little ammount of debt.

I am thinking of just applying for a loan and paying it all off with that and consolidating everything at a good APR.
If you can consolidate by securing a low-interest personal loan, go for it, but because your income-to-date ratio is probably a little out of wack at this point, you may have trouble going this route. Lack of suitable collateral may also be a problem because you're not a homeowner. DO NOT GO INTO CREDIT COUNSELING WITH THE INTENT TO CONSOLIDATE!!!! You'll be on the hook with them for years, with no chance of financing a house or car until your debt is COMPLETELY paid off.....JMJ

I have looked into agencies that do this, and it seems shady and your credit rating goes way down.

I have always payed my minimums on time so right now my rating is decent.

Anyone have experience with getting a loan?

I am looking to find a decent bank here in chicago.

[MarkK]

Try myvesta.org They are a credit counseling agency, but they are legit.

Going through a service as above may hurt your credit rating and may not. For me it did not, as it never go on my FICO. Some of my credit card interest payments dropped to 0% APR, which was fantastic.

The hassle is paying the companies. They do not accept checks (for obvious reasons) so you have to send a money order or use a debt card online, which costs $15 per month.

[Ish]

Originally posted by MarkK:
Try myvesta.org They are a credit counseling agency, but they are legit.

Going through a service as above may hurt your credit rating and may not. For me it did not, as it never go on my FICO. Some of my credit card interest payments dropped to 0% APR, which was fantastic.

The hassle is paying the companies. They do not accept checks (for obvious reasons) so you have to send a money order or use a debt card online, which costs $15 per month. I will look into this. I wonder how it is that some get adversely affected while others do not.

Thanx for the info though. smile.gif

I just want to gather info and see what methods others have had success with.

[SHEIK YERBOUTI]

There was a thread about this not too long ago. Someone made mention of how those debt counselors work. Not too pretty. They not only collect money from you for their "services", BUT they also collect money from the credit card agencies for acting as their 'collection agents'.

Also, you often see something like, "Account in debt management" on your credit reports. That's almost as bad as having "Bankruptcy" on your report.

I think it was JMJ who posted to most info about this situation the last time this subject same up.

Maybe someone can post the link to the thread, I found it VERY informative.

[GROOVE VICTIM]

This was the thread I created a few weeks ago about financing cars, leasing, and credit mamagement. Very informative stuff.


Financing a vehicle, Debt Management, Trade ins, and all that good stuff (http://deephousepage.com/cgi-bin/ultimatebb.cgi?ubb=get_topic;f=1;t=027616)


Peace

[SHEIK YERBOUTI]

This might be the same post but I found the link and thought I'd post it as well.

http://deephousepage.com/ubb/ultimatebb.php?ubb=get_topic;f=1;t=027966#000000

[JMJ]

Originally posted by MarkK:
Try myvesta.org They are a credit counseling agency, but they are legit.

Going through a service as above may hurt your credit rating and may not. For me it did not, as it never go on my FICO. Some of my credit card interest payments dropped to 0% APR, which was fantastic.

The hassle is paying the companies. They do not accept checks (for obvious reasons) so you have to send a money order or use a debt card online, which costs $15 per month. How can a credit counseling agaency be "legit" if they're not regulated by anybody?? Credit counseling does not hurt your credit rating simply because you now have the inability to damage it any further by opening ANY new lines of credit until your debts are completely paid off. Notic e how your FICO, Beacon, or Empirica score didn't go UP either?? Total inability to open new lines of credit had a little to do with that. You weren't rewarded for all of those payments made to consolidate your debt, nor should you expect to be. Those 0% APR's are made possible baecause the agency works out a deal with your creditors. The interest money is pure profit, and the lenders just want to get paid what's owed to them. How much did you charge up while the interest was at 0%?? NOTHING, because the lenders close your accounts until they're paid. You could've worked out the same deal with your creditors had you tried. something is better than nothing, and your creditors would rather break even than have to close the account as a profit and loss write-off. What happens in most cases is that the creditor makes a note which reads "Account Settled for Less Than Full Balance". Next time you apply for a loan, guess what the prospective lender is reading on your bureau?? Maybe I'm in the wrong business. The credit counseling smoke-and mirror schpiel seems to have some believers.....JMJ graemlins/jpshakehead.gif

[GROOVE VICTIM]

JMJ, you typed "Account Settled for Less Than Full Balance". How does this affect you credit score and is this a good solution or not to pay off any debt.

Peace

[MarkK]

Sorry if the facts of my experience disagree with your opinions.

First off Myvesta is legit as they are a true non-profit run by debt experts. They are all over the media here in DC and are not fly by night. So, IF you are going to go the credit counseling route, they are a group to trust. They will tell you upfront the risks to your credit report.

I did not lose my ability to open new lines of credit, in fact I just last year purchased my new home with a jumbo loan at very competitive rates. Also, none of my credit lines stated Less Than Full. One said account was in credit counseling but that dissapeared.

I tried to negotiate the 0% interest directly but was uniformly turned down. Perhaps if I had held back a few payments, but I was never late on a my cards, just over my head a bit.


Originally posted by JMJ:
</font><blockquote>quote:</font><hr />Originally posted by MarkK:
Try myvesta.org They are a credit counseling agency, but they are legit.

Going through a service as above may hurt your credit rating and may not. For me it did not, as it never go on my FICO. Some of my credit card interest payments dropped to 0% APR, which was fantastic.

The hassle is paying the companies. They do not accept checks (for obvious reasons) so you have to send a money order or use a debt card online, which costs $15 per month. How can a credit counseling agaency be "legit" if they're not regulated by anybody?? Credit counseling does not hurt your credit rating simply because you now have the inability to damage it any further by opening ANY new lines of credit until your debts are completely paid off. Notic e how your FICO, Beacon, or Empirica score didn't go UP either?? Total inability to open new lines of credit had a little to do with that. You weren't rewarded for all of those payments made to consolidate your debt, nor should you expect to be. Those 0% APR's are made possible baecause the agency works out a deal with your creditors. The interest money is pure profit, and the lenders just want to get paid what's owed to them. How much did you charge up while the interest was at 0%?? NOTHING, because the lenders close your accounts until they're paid. You could've worked out the same deal with your creditors had you tried. something is better than nothing, and your creditors would rather break even than have to close the account as a profit and loss write-off. What happens in most cases is that the creditor makes a note which reads "Account Settled for Less Than Full Balance". Next time you apply for a loan, guess what the prospective lender is reading on your bureau?? Maybe I'm in the wrong business. The credit counseling smoke-and mirror schpiel seems to have some believers.....JMJ graemlins/jpshakehead.gif </font>[/QUOTE]

[JMJ]

Originally posted by GROOVE VICTIM:
JMJ, you typed "Account Settled for Less Than Full Balance". How does this affect you credit score and is this a good solution or not to pay off any debt.

Peace Unless you're filing a Chapter 7, it's definitely in your best interest to settle your debt. Creditors will not report anything negative as long as they're getting paid on time. Settling for less than full is more of an "alert" to other prospective lenders than anything else....JMJ

[JMJ]

Originally posted by MarkK:
Sorry if the facts of my experience disagree with your opinions.

First off Myvesta is legit as they are a true non-profit run by debt experts. They are all over the media here in DC and are not fly by night. So, IF you are going to go the credit counseling route, they are a group to trust. They will tell you upfront the risks to your credit report.

I did not lose my ability to open new lines of credit, in fact I just last year purchased my new home with a jumbo loan at very competitive rates. Also, none of my credit lines stated Less Than Full. One said account was in credit counseling but that dissapeared.

I tried to negotiate the 0% interest directly but was uniformly turned down. Perhaps if I had held back a few payments, but I was never late on a my cards, just over my head a bit.

</font><blockquote>quote:</font><hr />Originally posted by JMJ:
</font><blockquote>quote:</font><hr />Originally posted by MarkK:
Try myvesta.org They are a credit counseling agency, but they are legit.

Going through a service as above may hurt your credit rating and may not. For me it did not, as it never go on my FICO. Some of my credit card interest payments dropped to 0% APR, which was fantastic.

The hassle is paying the companies. They do not accept checks (for obvious reasons) so you have to send a money order or use a debt card online, which costs $15 per month. How can a credit counseling agaency be "legit" if they're not regulated by anybody?? Credit counseling does not hurt your credit rating simply because you now have the inability to damage it any further by opening ANY new lines of credit until your debts are completely paid off. Notic e how your FICO, Beacon, or Empirica score didn't go UP either?? Total inability to open new lines of credit had a little to do with that. You weren't rewarded for all of those payments made to consolidate your debt, nor should you expect to be. Those 0% APR's are made possible baecause the agency works out a deal with your creditors. The interest money is pure profit, and the lenders just want to get paid what's owed to them. How much did you charge up while the interest was at 0%?? NOTHING, because the lenders close your accounts until they're paid. You could've worked out the same deal with your creditors had you tried. something is better than nothing, and your creditors would rather break even than have to close the account as a profit and loss write-off. What happens in most cases is that the creditor makes a note which reads "Account Settled for Less Than Full Balance". Next time you apply for a loan, guess what the prospective lender is reading on your bureau?? Maybe I'm in the wrong business. The credit counseling smoke-and mirror schpiel seems to have some believers.....JMJ graemlins/jpshakehead.gif </font>[/QUOTE]</font>[/QUOTE]Did you buy your home while you were still in credit counseling?? If so, while it is rare but not impossible, more than likely you had already paid off 85-90% of your debt. Not-for-profit?? OK. So how do the "debt experts" get paid?? By YOUR creditors. Is there a state or federal agency that regulates credit counseling agencies?? NO. So while your experience may have worked for you, I don't recommend it to anybody, and I work in finance, primarily with folks with credit problems. You essentially went thru a Chapter 13 with a prettier name.....JMJ

[imported_Gman]

Be careful:

How debt negotiators can crush your credit

http://www.bankrate.com/brm/news/cc/20030303a1.asp?prodtype=cc

[ April 28, 2003, 01:30 PM: Message edited by: Gman ]

[imported_Gman]

Originally posted by Ish:
Man, I've been trying to formulate a plan to climb out of debt for a while now.

Between school loans and old bad spending habits on credit (mostly vinyl), I racked up a hefty little ammount of debt.

I am thinking of just applying for a loan and paying it all off with that and consolidating everything at a good APR.


I have looked into agencies that do this, and it seems shady and your credit rating goes way down.

I have always payed my minimums on time so right now my rating is decent.

Anyone have experience with getting a loan?

I am looking to find a decent bank here in chicago. Debt consolidation loans are a great idea done thru a bank as long as you get a much lower interest rate and are at the point where you are not going to go right out and charge all the credit cards up again once they are cleared (but you did say old spending habits right ?). Can you imagine having high balances on your cards and having the debt consolidation loan over your head too graemlins/scared.gif

What I would do ( I am debt free except for my mortgage loan):

1. Have patience.

2. Shift the existing credit card debt to other cards with lower interest rates. Check http://www.bankrate.com/ for possible lower interest rate cards.

3. Sort all my debts\loans by interest rates then put any extra money I had toward paying off the one with the highest interest rate first while making the minumum payments on the others. When that highest interest rate one is paid off then I would take all the payments I was making toward that one and apply it toward the next highest interest rate one, and so on and so on.

Your student loans (good debt\ Excellent ROI) should have the lowest interest rates so I would save those for last. If not see item #3

[maryannsms]

The best way to get rid of debt is to pay it off. If you owe money to a credit card company the only way to get them off your back short of declaring bankruptcy is to pay them back. Paying them back will make them happy and improve your credit all in one shot.