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  #1  
Old 03-13-2006, 11:51 PM
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Advice: Get out of your debt sooner?

Like Earl always says, this is a family. So it'll be great if anyone has this kind of knowledge shares abit with me on the svx web family.

This is not the first time I received this type of letter. Well, I received a letter from a debt relief agency today. Basically, the letter says it will help you get out of your debt sooner and cut down your high interest rates alot. I gave a call to the 1-800 number. Basically, the agency will help you cut down your high interest rates alot and help your save money in your debt. It kind of sounds too good in everything......of course, they'll make your money in btwn from the % interest rate. The program is like ask you to stop doing payments on your credit cards and settle down to one payment to them from your account. Apparently, it sounds good and for example if you have ten thousands loan and it will help you cut down paying more than 60%.

My thoughts is what kind of drawback on this program? Well, how did they know I now have high balance loans on the cards? Is this a good program and not a scam that will harm you?

One thing I don't like is they will ask you to stop payments to your cards and you're forced to close your other accounts. Please share some advices if you have this type of knowledge. Thanks.
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  #2  
Old 03-13-2006, 11:57 PM
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ensteele ensteele is offline
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I have heard that they charge a fee to do what you can yourself. The way that most of the debt people advise is to get whatever money you owe onto a 0% interest if possible. If you can't do that, pay minimum on the lower interest cards and the most you can on the highest interest cards. Then as soon as you get it paid off, you put all that savings into the payment of the next higher interest card until all are paid off.
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  #3  
Old 03-14-2006, 12:15 AM
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I tried one of these things back in 03. Turned out the company was fake and it was a big scam. I paid them almost $2100.00 before i realized they werent paying my creditors. Then, they disappeared. I was paying them with ACH debits from my checking account, and my bank was kind enough to help me get back about 60% of the money by filing some paperwork.

Do yourself a favor and research this carefully. Make sure the company you're doing business with is on the up and up. Also, take note that using one of these services will generally have a negative effect on your credit.

Mike
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  #4  
Old 03-14-2006, 12:16 AM
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They haven't told me what fee they will charge. But from the debt he said he could shave off for you is alot. What they will do/are going to do that I can do it myself??? If I know what they will do, I will try to do it myself!!! I don't think that I will be able to get 0%APR anymore at this point. As my score getting lower, those banks are like suckers, they raise the interest rates even much, much higher! In that case, a lot of the payments you do will take care of the interests and will take very little care of the principles. Therefore, you'll be taking much longer times to finish your debt.

Paying minimum on the lower int rate cards and paying the most I could on the higher int rate cards is the way I can do now. If I know what they can, I can do it myself, I will definitely try. Also, I'm really keen to find out what the drawbacks if people get into this type of program. He sounded pushy on the phone and like a typical salesman so I told him...I wasn't decided anything now...
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Old 03-14-2006, 12:45 AM
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The trick they use is to write to your creditors and say "Mr X cannot afford to pay his monthly payments of $1000 so we will be taking over his debts and paying you $600 per month"

They then write to Mr X and say "We have negotiated your debt repayment down to $750 per month. Please sign the enclosed standing order."

5 years later Mr X finds that the debt is still outstanding, has been accruing high interest and is now more than the initial figure. Mr X also now has a bad credit rating.
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  #6  
Old 03-14-2006, 07:45 AM
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It came in the mail, just burn it. If you want out then go look for a reputable company.
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  #7  
Old 03-14-2006, 07:54 AM
dcarrb dcarrb is offline
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I agree with Earl: No sense paying someone to do what you can do yourself. If you're really in a bind, YOU can (and should) contact creditors to negotiate arrangements to settle your debt. Reputable lenders will consider reasonable input, unless you've stiffed 'em for so long they've begun repo/forclosure proceedings or turned the account over for collection.

Debt-consolidation loans might make economic sense in some instances, but remember that you can't borrow your way out of debt. (I figured that out years ago when I started cash-advancing on credit cards to pay the mortgage.)

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  #8  
Old 03-14-2006, 09:56 AM
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debt snowball

See this site: http://www.daveramsey.com/

If he isn't on a radio station you can receive, try the online broadcast of his radio show. It is the most entertaining, yet informative, finiancial advice show I have listened to. He admits he doesn't have any new advice - just stuff our grandparents knew.

What you need to do is the system Dave Ramsey calls the "debt snowball".
Double (or more) the payments on your lowest balance debt while paying the minimum on all the others. When that debt is paid off, apply it's payment, plus what you were paying, to the next lowest. Contine until all debts are paid in full. Oh, before you do this - stop charging anything! Cash only! Use debit card for online parts purchases.

Don't sell the SVX!
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  #9  
Old 03-14-2006, 12:02 PM
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Quote:
Originally Posted by TN_fwdsvx
What you need to do is the system Dave Ramsey calls the "debt snowball".
Double (or more) the payments on your lowest balance debt while paying the minimum on all the others. When that debt is paid off, apply it's payment, plus what you were paying, to the next lowest. Contine until all debts are paid in full. Oh, before you do this - stop charging anything! Cash only! Use debit card for online parts purchases.
This is good but I would pay off the highest interest debt first.

eg. Credit Card @ 20%, Line of Credit @ 8.5%, Mortgage @ 7%

Makes more sense to pay off the credit card first.
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Old 03-16-2006, 02:49 PM
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My brother was suckered into one of those places promising huge interest rate cuts. Out of 7 credit cards they took over payments on, the most the interest was lowered on any of them was 1.25% Most were .5% reduction. Not much when you are looking at 18-25% interest rates. Then they have the $49.99 Monthly Membership fee, a $2 per month per account management fee, a $5 per payment fee for each creditor, and a $12 per month fee to ACH the money from his bank account. That adds up to $110.99 per month to "save" about $75/mo. in interest.

The best advice I can give is to go talk to the lender that you have the best payment record with. Take them your other bills and ask them to offer a consolidation plan to move all your debt to them. Secure it with everything you can (furniture, tools, TV, stereo, roller skates, etc.) to get a secured loan interest rate. Check if there is a rate deduction for ACH payments or if you have payments taken every two weeks instead of once a month.

Then make a realistic budget. No CDs, no eating out, buy the cheap booze instead of the top shelf and then save that extra money to have fun out once in a while. You have to allow yourself some fun, but only using the cash you saved.

In no time you will be back on your feet.

Good Luck. I've been through it and I'm more financially responsible because of it. Its hard, but it can be done on any income level.

Another tip is to place a bright sticker on everything you bought on a credit card. TV, stereo, computer, etc. Then you will be constantly reminded that you still owe accumulating interest on them because you didn't save up for purchase. The stickers start to eat away at you until you realize that you didn't need this particular item or that one and that helps you from buying stuff on credit in the future.

Doug
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  #11  
Old 03-16-2006, 06:53 PM
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Avoid those agencies.
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  #12  
Old 03-17-2006, 01:00 AM
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Thanks for your knowledge shared, people.

I'm always responsible for my credit payments. I have a good long credit payment history, I think. Maybe two years ago, if I applied for any credit, my line of credit was easily to approve for five digit numbers. I believe my score was above 800, but as of right now is probably around 650 or below. No, I didn't crazily spend to get myself into this situations. I guess I was a brave guy. When I had a really good score, they all kept sending me 0% APR for 9 months or a year. Wow, they're letting me use their the money for free!! This was so attractive to me as I always love to have the idea of "using money to make money." I used leverage plus leverage to have some investments(equities, etc). Well, leverage could be your friend but it's also a hidden double-sword. It could just kill you overnight if you're not careful. Those stuff went south and I'm getting myself into troubles.

That's much likely how it comes from. I don't plan on selling my svxi. Even if I sell both of them, they won't help me at all. Even if I have 12 and sell them all, it still won't help me at all. My unsecured loans are really high. I will only sell my svxi when I have to move or go somewhere.

After some ideas over here, I called one of the highest creditors and tried to negotitate with them for a lower int rate. Chase was so nice to my credit and today it's the worst to me, a 29.99%APR. They said they can't do anything at this point. It's not good that when the APRs% went up and gas prices and stuff keep going higher. Plus, I have no luck with my yellow x, the repairs were not right and the unsuccessful swap drained my budget a lot.

I'm still at school and only work part-time at nights. I hate that when I'm already at high balance, they're not helping but keep raising the rates. This will imply, a lot of payments will go to the interest charges and not much to the principals. And, it will therefore take much longer times to pay off! And, I keep thinking that damn the interest fees I pay monthly, I can easily afford a big house payment or a really nice, nice car.

I don't think that I'm going for the debt consolidation service now as it will get me negative effect. I'm trying to cut down my expenses and doing my best, pay more than minimum payments and try to pay them earlier before the due dates to save some financial charges. That's all I can do right now. At this rate, it'll still take me years to finish. I'm thinking to find a good pay job in the summer and do more stuff/get money down the payments. And, if any rate, if my investments(,,etc) happen to be good or anything strategies work out, getting down those payments will be in much, much quicker time.

I will try to check with citi banks as they're the best to me and I still have a 1.9% fixed APR. I may try to check with them if they allow me to have any bigger room with transferred in some balances. Any ideas but any creditors are very easy to apply/deal with? I may try. But as my credit constraint right now, I ain't sure if I will be qualifed for any 0%APR introductory rate.
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