Bills.com > Manage Debt > Deal with Debt > Debt Relief Q&A > Help for $60,000 in credit card debt
Question:
DEC 12, 2011

Help for $60,000 in credit card debt

i have about $60,000 in credit card debt, I own a home with no current equity in it and my credit rating is fair. I am looking

Read full question
Bill's Answer: Bills.com Resident Expert

First of all, there is no perfect solution. If your credit is fair or bad, getting a really good refinance loan for debt consolidation could be tough. Your other alternatives (credit counseling and debt settlement) will negatively impact your credit. BUT, I will help you walk through your options and decide which alternative is best for you.

Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: http://www.bills.com/debthelp/debt/

Since debt consolidation comes in many forms, it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.

Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you.

Credit Counseling

Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts – but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report… and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy – or using a third party to re-organize your debts.

Debt Settlement

Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.

Debt Consolidation Loan

Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high… but the monthly payment will be lower than other options and there is no credit rating impact.

Net-net: while there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.

Bills.com makes it easy for you to apply, by following this link: https://www.bills.com/debthelp/debt/

Hopefully, one of the several options I have described above may be able to help you. I encourage you to explore the Bills.com website, http://www.bills.com/debthelp/ to read more about these and other options available to you.

I hope this information helps you Find. Learn. Save.

Best,

Bill

www.bills.com

Comments (4)


Avatar
Bills.com
November 02, 2009
Your rights depend on the state you reside in. Please read Collections Advice to understand the rights of creditors and debtors when a debtor defaults on unsecured consumer debt.
Renee .
November 02, 2009
I am on permanent disability my husband and I have credit card debt,mostly because of medications we both need.what would happen if we dont make the payments to the credit card collectors will we lose are home and cars?
Bradg .
January 10, 2008
there are several options for people who need to get debt help but cannot qualify for a loan. Since bankruptcy is out (you have too much equity), you should focus on either debt settlement or credit counseling. Give Freedom Debt Relief a call and see if they can help you lower your payments and cut your $80,000 in credit card debt. they are at: www.freedomdebtrelief.com or call them at: 800-544-7211 Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: http://www.bills.com/debthelp/debt Online debt consolidation comes in many forms, so it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors. Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you. Credit Counseling Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts – but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report… and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy – or using a third party to re-organize your debts. Debt Settlement Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money. Debt Consolidation Loan In a debt consolidation loan, you exchange one loan for another. Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In case you do not own a home, then your option is limited to an unsecured personal loan. Your ability to find a lender willing to loan you money will depend of several factors, primarily your credit score, your income, and your assets. You state that you do not own a home, which means that you cannot take out a home equity loan. However, if you have other assets, such as a vehicle, you may be able to borrow money using those assets as collateral. Interest rates on secured loans tend to be significantly less than unsecured notes, which is especially helpful for those with credit problems. Net-net: While there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.
Sally Q.
January 09, 2008
my husband and I have $80,000 in credit card debt. we own a house with $150,000 equity. We tried to get equity for our house but not approved, we tried to refi with cash out also no luck. Now we are bad credit because we are 60 days late with our credit card payments. What can we do and what are our best option?
Waiting for comments to load Loading more comments
Thanks for your feedback!
 
Articles Ask Bill
Thank you for subscribing!