I am in over my head with my credit card debt and am making all of my on-time payments, which add up to $2800 a month, but it’s not getting any better. I don’t want to file for bankruptcy and have my hard-earned possessions taken away from me. I’ve been trying to pay my bills on time; after paying for all of my bills, I have no money left over for groceries, petrol, other household expenses or medical bills. I owe more than $80,000. Does anyone have any advice about the available programs?
J.G. Wentworth? Relief from national debt? Licensed?
Please refrain from doing so as it can ruin your credit (I can attest to this from personal experience; I was desperate). Instead, phone each lender separately and let them know that you are unable to make your payments. They will assist you by reducing the debt or halting it to enable you to make up the difference through their hardship programs. If all else fails, you can negotiate a lower price and settle with them, but doing so will result in the account being closed. Best of luck
Here’s my usual response
When you see services advertising “debt consolidation” or “debt relief,” they’re often referring to debt settlement, not true consolidation. Genuine debt consolidation means paying off your debts with a new loan, typically from a bank or financial institution, combining everything into one payment.
Debt settlement, on the other hand, is a different process. Companies use terms like “debt consolidation” as a softer way to describe it. With debt settlement, you stop paying your creditors for a while, hoping they’ll accept less than the full amount to settle the debt. This approach can severely damage your credit for up to seven years due to delinquencies and charge-offs. Because of these risks, I rarely recommend debt settlement, as many companies in that industry are also unreliable or shady.
Additionally, any forgiven debt is considered income by the IRS, so you’ll have to deal with taxes on that amount.
Personally, I suggest bankruptcy over debt settlement because it’s a legal process, and while it impacts your credit, the effects aren’t worse than debt settlement, and it’s much more straightforward.
A better option might be a Debt Management Plan (DMP). With a DMP, you pay off your debts in full but with reduced interest rates, allowing you to make real progress without damaging your credit long-term. You can start looking for a DMP through the National Foundation for Credit Counseling (NFCC), a non-profit organization that connects you with trusted providers.
Lastly, be cautious about who you get advice from. I don’t work in finance or debt services, and my DMP recommendation points to a national non-profit, not any specific company. Be mindful of those pushing debt settlement, as they may have their own interests at heart.
It would be better if you declared bankruptcy. You won’t be able to tell the difference after two years.
I have been informed that my boat and Haley will be seized, sold, and the proceeds used to settle debts.
Really, you ought to sell both and use the proceeds to pay off the debt. The remaining amount might then be obtained using a better interest rate personal loan. With Sofi, I completed everything, and it went well. It’s acceptable to purchase toys once you can pay for them with cash. Otherwise, if you are paying the banks so much interest, you would never be able to advance financially.
Before all of this debit, I paid cash for both of them more than six years ago. I don’t know what went wrong, but two or three years ago, I only had about $10,000 in debt. It didn’t help that I lost my work for four months and that my savings account was completely depleted.
I apologise; I believed you were suggesting that was the source of the debt. Even so, I would sell to pay off as much debt as I could. then rebuild your assets.
Many people don’t fully understand how debt consolidation works and may have received bad advice from someone with poor financial experiences who didn’t finish the program. Debt consolidation provides immediate relief by reducing your payments and typically settles debts for around 50% of what you owe. The payments are structured, so each one helps you work toward paying off the debt, rather than just covering interest. Depending on your goals and current credit situation, it can be a good fit for you.
Filing for bankruptcy can cost around $4,000 in retainer and trustee fees, depending on your income and state. Debt resolution, on the other hand, is performance-based, meaning the company doesn’t get paid unless they successfully settle your debts. I had a great experience with debt consolidation because I wasn’t focused on maintaining credit during the process. By the time I completed the program, my credit score naturally improved to 690. I then disputed the paid-off accounts with the credit bureaus, and within a year, my score was in the 750s. I used Accredited for my program. The only downside was an early graduation loan offer with a 27% APR, but I avoided that by paying it off early with no prepayment penalties, finishing the process faster than expected.