Need some debt resolution advice

As near as I can figure, I have about $5,000 in old debt, divided among two accounts.

One account, I haven't been able to reach the creditor yet.

The other I just talked to on the phone. They want $3,200 from me, of which about $1,200 is accumulated interest, and won't even CONSIDER a settlement agreement until I give them detailed information about my place of employment, income, etc. -- which, according to the research I've done, is a bad idea.

Is there a decent way I can resolve this myself, and quickly, or would my best bet be a debt management plan, like here: http://www.debtadvice.org/index.html I've heard that debt consolidators are, by and large, scams or otherwise not worth it, but is there one out there that can help me?

and it worked out fairly well. I had about $12k in debt, and they helped me set up a payment plan. Eventually I refinanced my house and paid off the remainder, but it did help me out at the time.

Were your guys the same as, or have anything to do with, these guys --> http://www.debtadvice.org/index.html ?

and I think they're only licensed in MN and WI.

...though just barely. ;)

so in a way, they're barely in MN, too! :D

Pull your credit report and find out your FICO rating. You may be suprised to find out your credit history isn't as bad as you think. It's not done across the country yet but most states will allow you a free credit report from each of the Credit Unions once a year. And whatever you do never, ever pay the minimum for your credit cards. Even if you pay on time, if you only pay the minimum it'll affect your rating. I know it's tough but even if you just round it up $5 you won't get dinged for it!

And if you can - use the credit card industry to your advantage. Many companies will offer your a 0% APR transfer for like 6-12 months. If you can then swap your debt over to the new card (and cancel the old - don't let yourself have the temptation of a paid off open credit card). If you're not paying interest then it'll be easier to get the thing paid off. They can't stop you from swapping.

Plus it helps to find all your unnecessary expensives and cut them back. For me it was digital cable (geez I was paying like $100/month for TV!!) and silly things like buying coffee at a coffee shop everyday (Mine was Water - everyday I would pay $2 for a big bottle of water. I still buy water but I drink the free water available to me at work and even fill my reusable water bottle before I go home). Instead of paying $60 a month for water I now pay about $10.

I never worked with a credit councillor but you definately need to shop around before signing up. The credible ones not only should be non-profit but should not be asking for massive fees to help you.

The thing is - when you work it all out, it feels good to be out of debt!

First of all, I don't currently have any outstanding loans or open credit cards. All of my debt is a few years old. I was young(er) and stupid.

Second, since I don't have credit cards, I can't transfer any of the balance to them.

Third, I did pull my credit report. It didn't include my credit score, but that was bad enough for me to be denied a personal loan last month from the bank I've been with all my life. Le sigh.

Credit card companies are fairly loose with thier lending, so it's still an excellent suggestion. Instead of getting a 0% transfer card, get a 0% introductory card. If you get approved on one and the approced balance isn't high enough, apply for a second the same day (before the new card shows up on your credit). Pay your debt off with the credit cards, and IMMEDIATELY burn or shred the cards. They should strictly be used as a vehicle to convert overdue debt into current debt.

Personally, I have to recommend that you avoid credit counseling services if at all possible. Using a service like that does negatively impact your credit, and $5000 is a small enough debt load that you should be able to convert it into another form with just a little work.

because Personal Loans usually don't have the collateral needed to back them up and thus the banks are taking a greater risk. At least with a mortgage, if you default they're getting your house. As for Credit Cards they just charge you outrageous rates and bump you up everytime you miss

1-Write down all debts, monthly bills, income, living expenses.
2-Do a budget. Assign every last dollar a spot to be spent. Cut out any unnecesary expenses such as cable, cell phones, coffee on the go, luches or dinner out.
3-Pay neccesary expenses first such as housing, food, utilites, transportation. Then make minumum paments on all others bills except for the one with the smallest balance. Go after this with as much money as you can throw at it. You don't have to wait and pay once a month. If you have $25.00 left in your bank the day before pay day send it off. A balance of $3200 should take less then a year to pay off. In fact if you really put your mind to it more like 6 - 10 months.

I am working on paying off about $8600 in credit card debt accumulated over the last year because of sick pets, car issues, stupidity. I make a scheduled payment of $400 each month but by cutting back on extras I have been putting more down each month. The balance is down to 7000 now and I am hoping to complete it by year end. That is if nothing more happens!!!

I live in a part of the country where the costs of living, and thus wages, are pretty low.

Nonetheless, some good tips. Thanks. :-)

your credit often ends up WORSE after them, not better! Check out these sites for info: www.artofcredit.com and www.creditinfocenter.com .

One thing to look into is what the statute of limitations is for credit in your state. In my state it is 4 years. If the SOL has passed, they cannot legally force you to pay. also, if it has been sold to a debt collector, as opposed to dealing with the original creditor, they often buy the account for a fraction of what it is worth, and information like that can help you know how much room you have to negotiate. also, do not pay ANYTHING until you have an agreement in writing stating that they will give you a positive result on your credit report. Often, people negotiate the dollar amount, but then on the report, it shows that it was settled, rather than paid in full, and that is still a black mark on your rating.

Both of the above websites have active discussion communities with very knowledgeable members who like to help. Please check into all your options before paying them a dime, and before hooking up with a counselor that could end up hurting your credit even more.

SoL is 6 years in my state. So if I were in your state, I might be okay, but here it expires in about 18-24 months, and one of my creditors has already mentioned legal action against me.

Second, I am nevertheless aware of these problems with credit counselors, and will mention these concerns when I meet one next week. Nonetheless, I think it's my best option right now, particularly since I can get the counselling itself free through my EAP.

Check the sites I mentioned. Why make your credit worse, when there is a lot you can do on your own and end up better for it?

I cannot deal with the stress of the self-help route. I have tried it, and I simply cannot do it. I am *THAT* close to the edge of my sanity right now.

see on TV. There's one that has been around for about 40 years. Sometimes Goodwill has that service (even tho I hate Goodwill), at least they will help for free.

Don't do it alone. Get help. Call Legal Aid. Call someone.

I'm on a debt management thing, but here's the thing, at least mine--if you are into collections, you have a very, very hard time getting anywhere. The collections agencies tell me all the time they don't negotiate with credit counselors, but the credit counselors say "yes they do". :shrug:

I'm on my third collections agency with one card, and my credit counseling is still trying to negotiate with the first one. :eyes:

They did get my largest creditor to go along with it (Bank One you rock) so that's good.

maybe I should get their card. I get about two offers a week.

I pretty much have perfect credit nowadays, but when I was younger I royally f***ed up my credit reports. I ran up credit cards, financed a car, and then blew it all off when "more important" things came up. By the time I was 19, I had nearly $20,000 in collections. I went to a credit counselor at first, and it ended up being the biggest financial mistake ever.

The credit counseling company, for a fee of several hundred dollars, got several of my creditors to agree to place me on an interest free payoff schedule, with the stipulation that I never miss any payments and that I not apply for any additional credit until they were paid off. Two other creditors refused to work with the company, so the counseling service advised me to STOP PAYING THEM, and to refer them to the counseling service to "pressure" them into agreeing to a plan. Once the creditors got a whiff of that, they sued me. They won, my wages got popped, and I lost the ability to pay off all the negotiated loans. Two of the negotiated loans immediately went back into collections, and a third sued me as well. By the time everything was said and done, I ended up right back where I had been BEFORE the counseling service got involved, except I found myself a bit poorer for the effort. It took me a few years, but I did eventually get it paid off.

Here's a few things credit counseling services wont tell you. First, creditors really don't have to work with the companies if they don't want to, and many don't. Large companies are more likely to work with them, while smaller ones will probably ignore their overtures in favor of pursuing you personally. Second, negotiated settlements often are left marked as overdue on your credit report. If you arrange a three year payoff plan, your credit report may end up showing that the bill was late for three years straight. Third, creditors sometimes resell debt accounts after credit services have negotiated payoff plans since those plans largely eliminate their profit margin. The debt purchasers are under no obligation to honor it, so you could pay off half the amount and find yourself back in collections anyway. Fourth, federal law says that debt and collection accounts can only be listed on your credit report for seven years from the date the bill went overdue. If you pay it off yourself, that date remains legally established as the date you missed your first payment. If you go to a credit counseling service and later run into problems again, creditors can actually RELIST your debt and start the seven year period over again. Finally, the very mention of a credit counseling service on your credit report will make you a credit pariah for seven years. You will not be able to open any credit accounts, purchase cars or homes, or take out any loans. Many creditors look on credit counseling services as the equivalent of bankruptcies and won't even consider extending credit (or if they do, they will charge you a sky high interest rate).

As stressful as it may be, credit counselors ultimately have no more legal rights and abilities than you do, but using them can often do more harm than good. In my case, they made absolutely no difference.

I have to reiterate what I said in the other post. While I realize that it can seem like a lot when you're not making much, $5000 really isn't an incredible amount of money. Many people are in the hock for ten times that amount before they consider asking for outside help, so to screw your credit up for seven years over such a relatively small amount seems like a huge mistake.