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Debt Relief – Insolvency – Bankruptcy Information » Debt Consolidation and Refinancing » Is there such a thing as a legit debt consolidation program out there?

Is there such a thing as a legit debt consolidation program out there?

Does anyone know of any real debt consolidation programs to reduce your monthly bills? I currently have a lot of short term, high payment/interest loans and I had to recently find a new job that doesn’t pay quite as good. I need to reduce my monthly bills (while maintaining my good credit of course) any ideas would be much appreciated. Thanks.

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4 Responses to "Is there such a thing as a legit debt consolidation program out there?"

  1. John C says:
    NO…NO…NO THEIR ALL SCAMS… DONT DO IT… LIE IIN THE BED YOU MADE… IF YOU CANT PAY THEM…THEN DONT, ONE BILL AT A TIME, DONT EVER GET/USE CREDIT…IF YOU DONT HAVE CASH YOU DONT NEED IT

    YOU NEVER NEED CREDIT IF YOU HAVE CASH…. IF YOU GO TO BUT A HOUSE, YOUR JOB AND SALARY WILL DETERMAINE YOUR QUALIFYING TERMS

  2. thestarvingdeejay says:
    John – first my apologies on the change in employment – i know things are tough.

    unfortunately, while many of the debt consolidators are legitimate – NONE of them can keep your good credit intact.

    Debt consolidators work on your behalf to call credit card companies and tell them that their client will no longer be making their payments (typically the person hasn’t been paying for awhile). The bank wants SOME money and is willing to work to reduce interest rates, freeze rates, create payment plans or write off debt so the delinquent party can payoff their balances.

    the problem with any of these things is that as soon as it happens, a charge off is recorded with the 3 major credit agencies and your FICO will take a HUGE hit.

    Your best bet is to make the minimum balance and, if possible, transfer balances off of high APR cards to lower APR cards to save you some $ on finance charges. It’s not fun knowing you’re flushing your $ down the toilet every month – but look at it this way – the same thing would be happening if you were investing in the stock market ;-)

  3. JohnnyHeaven.com says:
    Myth: Debt consolidation saves interest and you have one smaller payment.

    Truth: Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem.

    For more information on the truth about debt CONsolidation, visit http://www.daveramsey.com/the_truth_about/debt_consolidation_3035.html.cfm

    ———————————————————

    The only surefire road to financial freedom isn’t an easy one, but with the right discipline, it is very effective.
    Watch this video: http://www.hulu.com/watch/48522/the-dave-ramsey-show-may-2-2008

  4. Jeanne R says:
    Please do not consolidate. 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. There is a better way.

    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 holidays are coming and there will be plenty of temporary jobs available. It is better to have a no fun year or two than a no fun decade.

    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:Mimimum 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.

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