Debt relief question

blackredyellow

chime wrote:

blackredyellow wrote:

know1 wrote:

Check out Dave Ramsey's plan and stay away from Debt Relief companies.

Here are the essentials of his plan:

You make a budget of all of your income and you stick to that budget.

You make a list of your debts from smallest to largest and make minimum payments on all of them except the smallest. For that one you throw ALL of your extra money outside of the budget that you need to live. As soon as that one is paid off, you take all of the money you were paying there and throw it at the next smallest. As you go along, you'll pick up momentum from the additional cash of not having those other minimum payments.

If you're really dedicated, you should be able to pay it off in 3 years with a decent/average income.

Never saw Dave Ramsey's plan, but I did that sort of thing with my school loan debts, and it's amazing how well it works (and you actually feel that you are making progress with each loan that gets paid off).

A similar plan is to pay minimum on all except the one with the highest interest rate until it's paid off and then move on to the one with the next highest interest rate. Known as snowballing.

There is a calculator (it's a UK website but you can change currency) for calculating it all out http://www.whatsthecost.com/snowball.aspx

That makes the most sense financially, but I liked the progress of knocking off individual loans... It kinda kept you motivated to get the next one paid off and then the next one, etc...

If your highest rate is your biggest loan, it might take a long time to get the first one paid off...

he still stands

Jearlpam0925 wrote:

he still stands wrote:

here is what you do:

STOP paying your credit card bills!
realize that you're not going to be able to buy anything on credit for about 20 years.
if you have any assets that could be taken by the law sell them and keep the cash in a safe place, but not a bank.
only pay the bills that you absolutely need, i.e. your car, shelter, utilities.
Once they take you to court (in 1 to 3 years) make sure that you have no tangible assets, except your (secret) cash.
The credit card companies will look at you like they're trying to squeeze the blood out of a rock and give up.
Your credit score will be shit for at least 10, maybe 20 years. Oh well. Who needs fucking credit anyway? It is like a cancer.

This is by far some of the dumbest shit I've ever read.

Well, it works... especially if you have a spouse who keeps his/her credit intact. Stealing? Maybe (probably)... but I didn't intend to espouse the ethical qualities of the plan. Maybe I should have said "here is an option for you if you don't feel bad ripping off the credit card companies who've been charging you 22% interest and huge fees for years and who make billions of dollars every year through usury and shady business practices."

And if you have $4,000USD or less in credit card debt you can just walk away and they won't do anything except call you and send you letters. They won't bother going after you for that amount of money because it isn't worth the expense.

Me? I've never run a balance on a credit card but used to have one. They recently started charging me $150 / year just to OWN the freaking card so I cancelled it... I still had to pay them $40 or so for this fee. I do need to get one just to have if I travel abroad.

The irony? I'm an accounts receivable manager and call on bad debt every week.

blackredyellow

he still stands wrote:

Jearlpam0925 wrote:

he still stands wrote:

here is what you do:

STOP paying your credit card bills!
realize that you're not going to be able to buy anything on credit for about 20 years.
if you have any assets that could be taken by the law sell them and keep the cash in a safe place, but not a bank.
only pay the bills that you absolutely need, i.e. your car, shelter, utilities.
Once they take you to court (in 1 to 3 years) make sure that you have no tangible assets, except your (secret) cash.
The credit card companies will look at you like they're trying to squeeze the blood out of a rock and give up.
Your credit score will be shit for at least 10, maybe 20 years. Oh well. Who needs fucking credit anyway? It is like a cancer.

This is by far some of the dumbest shit I've ever read.

Well, it works... especially if you have a spouse who keeps his/her credit intact. Stealing? Maybe (probably)... but I didn't intend to espouse the ethical qualities of the plan. Maybe I should have said "here is an option for you if you don't feel bad ripping off the credit card companies who've been charging you 22% interest and huge fees for years and who make billions of dollars every year through usury and shady business practices."

I always hear about these terrible credit card fees and ungodly interest rates, but having credit cards for 15+ years, I've never been assessed any sort of fees, except once when I didn't pay my bill on time, but a quick call got that taken care of.

nuffingman

blackredyellow wrote:

I always here about these terrible credit card fees and ungodly interest rates, but having credit cards for 15+ years, I've never been assessed any sort of fees, except once when I didn't pay my bill on time, but a quick call got that taken care of.

+1. It's amazing how flexible they become when you say you're going to transfer to another banks card if they charge you for being a little bit late.

81

he still stands wrote:

here is what you do:

STOP paying your credit card bills!
realize that you're not going to be able to buy anything on credit for about 20 years.
if you have any assets that could be taken by the law sell them and keep the cash in a safe place, but not a bank.
only pay the bills that you absolutely need, i.e. your car, shelter, utilities.
Once they take you to court (in 1 to 3 years) make sure that you have no tangible assets, except your (secret) cash.
The credit card companies will look at you like they're trying to squeeze the blood out of a rock and give up.
Your credit score will be shit for at least 10, maybe 20 years. Oh well. Who needs fucking credit anyway? It is like a cancer.

disagree 100%. they will take you to court, get a judgement and garnish your future wages.

81

he still stands wrote:

And if you have $4,000USD or less in credit card debt you can just walk away and they won't do anything except call you and send you letters. They won't bother going after you for that amount of money because it isn't worth the expense.

oh, they will come after you for $4k. don't kid yourself.

The Juggler

he still stands wrote:

Jearlpam0925 wrote:

Well, it works... especially if you have a spouse who keeps his/her credit intact. Stealing? Maybe (probably)...

god forbid your spouse ever lost her job or was forced to take a pay cut and needed your income to qualify for something down the line...jesus man. way to pull your own weight in that relationship.

jamburger

Good website to peruse... http://www.debtconsolidationcare.com/help.html

Lots of do-it-yourself advice and moderated forums.

he still stands

81 wrote:

he still stands wrote:

And if you have $4,000USD or less in credit card debt you can just walk away and they won't do anything except call you and send you letters. They won't bother going after you for that amount of money because it isn't worth the expense.

oh, they will come after you for $4k. don't kid yourself.

according to the Collections Law class I recently took, you are wrong.

he still stands

The Jeagler wrote:

he still stands wrote:

Jearlpam0925 wrote:

Well, it works... especially if you have a spouse who keeps his/her credit intact. Stealing? Maybe (probably)...

god forbid your spouse ever lost her job or was forced to take a pay cut and needed your income to qualify for something down the line...jesus man. way to pull your own weight in that relationship.

I'm not talking about my personal life here... why would you NEED credit anyway? Don't you save money?

he still stands

blackredyellow wrote:

I always hear about these terrible credit card fees and ungodly interest rates, but having credit cards for 15+ years, I've never been assessed any sort of fees, except once when I didn't pay my bill on time, but a quick call got that taken care of.

yes, if you always pay on time you should be okay... if you get tight with your cash flow and are slow on a few payments the interest rate automatically goes to 22% or higher and is likely to stay there forever.

The Juggler

he still stands wrote:

The Jeagler wrote:

he still stands wrote:

god forbid your spouse ever lost her job or was forced to take a pay cut and needed your income to qualify for something down the line...jesus man. way to pull your own weight in that relationship.

I'm not talking about my personal life here... why would you NEED credit anyway? Don't you save money?

you don't think this guy needs credit? how do you expect him to rent a house or an apartment? how do you expect him to eventually purchase a home one day? nah, you're right. he should live with his parent's long enough to pay off his 30k of debt and save enough to purchase a home outright.

whether people like it or not, your credit score is one of the most important aspects of your life.

The Juggler

he still stands wrote:

blackredyellow wrote:

I always hear about these terrible credit card fees and ungodly interest rates, but having credit cards for 15+ years, I've never been assessed any sort of fees, except once when I didn't pay my bill on time, but a quick call got that taken care of.

yes, if you always pay on time you should be okay... if you get tight with your cash flow and are slow on a few payments the interest rate automatically goes to 22% or higher and is likely to stay there forever.

congress just passed new laws making it more difficult for credit card companies to continue that kind of practice......however this probably means higher fixed rates for everyone though.

he still stands

81 wrote:

disagree 100%. they will take you to court, get a judgement and garnish your future wages.

have you ever seen this actually happen? Hint: It almost never does unless the debtor is holding $20k or more in debt. Under $4k there is absolutely nothing to worry about, and after five years of no payments they can't come after you any longer by law. Also, all you have to do is write to the debt holder saying to cease all communications and they can't call or write you, again, by law.

These are all suggestions for small debts, not that I'm saying they're ethically okay... but creditors don't have you by the balls like you think they do...

and again, this is because I've taken Collections Law classes... not my personal situation or what I'm advocating. I would have thought there would be less people who are sycophants for the credit card companies...

81

he still stands wrote:

81 wrote:

disagree 100%. they will take you to court, get a judgement and garnish your future wages.

have you ever seen this actually happen? Hint: It almost never does unless the debtor is holding $20k or more in debt. Under $4k there is absolutely nothing to worry about, and after five years of no payments they can't come after you any longer by law. Also, all you have to do is write to the debt holder saying to cease all communications and they can't call or write you, again, by law.

These are all suggestions for small debts, not that I'm saying they're ethically okay... but creditors don't have you by the balls like you think they do...

and again, this is because I've taken Collections Law classes... not my personal situation or what I'm advocating. I would have thought there would be less people who are sycophants for the credit card companies...

yes. at my old company, i could dig into the payroll system and see garnishment info.

he still stands

The Jeagler wrote:

whether people like it or not, your credit score is one of the most important aspects of your life.

yeah, if you're poor at managing your finances. I literally haven't had to show my credit score to anyone for at least five years and I own my house, my car, and pay cash for everything because I save/invest $300 every paycheck (plus my 401k and son's college funds). Credit scores are important for people who need credit because they don't know how to manage their personal finances. In short, if you're checking and/or showing your credit score to a creditor more than once a year, you're doing something wrong.

The Juggler

he still stands wrote:

The Jeagler wrote:

whether people like it or not, your credit score is one of the most important aspects of your life.

yeah, if you're poor at managing your finances. I literally haven't had to show my credit score to anyone for at least five years and I own my house, my car, and pay cash for everything because I save/invest $300 every paycheck (plus my 401k and son's college funds). Credit scores are important for people who need credit because they don't know how to manage their personal finances. In short, if you're checking and/or showing your credit score to a creditor more than once a year, you're doing something wrong.

what you are describing is an ideal situation that most, including the op, do not find themselves in.

if you don't mind me asking, when you first bought your house, did you pay for it or did you mortgage any of it? and roughly how much was the purchase price? for tax purposes alone, i would hope you took out a small loan on it. i talk to dudes all day who could pay off their mortgage at the drop of a hat, but choose not too.

and i will add that even though you own everything free and clear right now, you don't know what the future holds. something horrible (god forbid) could always happen to you or your family and you might need more funds than what you currently have available. if that situation arises and your credit score is poop....you, and your family, would be screwed. so it's always good to maintain a high credit score. it's just irresponsible not to.

---

hopefully you don't need to worry about that, i'm just saying shit happens in life and you never know when you'll need help.

so again, op---don't listen to this guy

blackredyellow

he still stands wrote:

Credit scores are important for people who need credit because they don't know how to manage their personal finances. In short, if you're checking and/or showing your credit score to a creditor more than once a year, you're doing something wrong.

That is a pretty inaccurate statement... Even the richest people use credit, and do so to their benefit.

For tax reasons, it can be much more beneficial to take out a loan for a portion of a large purchase instead of buying everything outright.

The Juggler

blackredyellow wrote:

he still stands wrote:

Credit scores are important for people who need credit because they don't know how to manage their personal finances. In short, if you're checking and/or showing your credit score to a creditor more than once a year, you're doing something wrong.

That is a pretty inaccurate statement... Even the richest people use credit, and do so to their benefit.

For tax reasons, it can be much more beneficial to take out a loan for a portion of it instead of buying everything outright.

correct.

81

he still stands wrote:

The Jeagler wrote:

whether people like it or not, your credit score is one of the most important aspects of your life.

yeah, if you're poor at managing your finances. I literally haven't had to show my credit score to anyone for at least five years and I own my house, my car, and pay cash for everything because I save/invest $300 every paycheck (plus my 401k and son's college funds). Credit scores are important for people who need credit because they don't know how to manage their personal finances. In short, if you're checking and/or showing your credit score to a creditor more than once a year, you're doing something wrong.

insurance uses it.