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Can you Credit card payments cut in half
Wednesday, Oct 24, 2007
Question: My husband has been off work since march with a work injury. We have lost half our income. Can I get my credit card payments cut in half with credit counseling, we just don't have that much coming in right now. Yet I don't want to file for bankruptcy. Will credit card co. let you pay a smaller amount each month?
Answer: You will find that the credit card companies are inflexible with regard to your monthly payments regardless of what your hardship might be - but there are many alternative solutions that you can pursue to get out of your debts and try to meet your monthly payment goals.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/
Now, let me outline some of your alternative solutions. It is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for a credit counseling or a 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.
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.
There are a variety of firms out there offering debt settlement. Bill is friends with the good folks at Freedom Debt Relief. They are a good organization and are members of the Better Business Bureaus. They can be reached at: 1-800-544-7211 or www.freedomdebtrelief.com Generally, I would make sure that any firm you choose is a member of the Better Business Bureau and get a sense for the quality of the organization (www.bbb.org
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.
There are a variety of firms out there offering debt settlement. Bill is friends with the good folks at Freedom Debt Relief. They are a good organization and are members of the Better Business Bureaus. They can be reached at: 1-800-544-7211 or www.freedomdebtrelief.com Generally, I would make sure that any firm you choose is a member of the Better Business Bureau and get a sense for the quality of the organization (www.bbb.org
)
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 : 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 offers a wealth of information regarding the various debt help options available to consumers?visit http://www.bills.com/debthelp/ for more information. I hope we can help you find a solution to your debt troubles, and help you Find. Learn. Save.
Best of luck,
Bill
www.bills.com
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 : 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 offers a wealth of information regarding the various debt help options available to consumers?visit http://www.bills.com/debthelp/ for more information. I hope we can help you find a solution to your debt troubles, and help you Find. Learn. Save.
Best of luck,
Bill
www.bills.com
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1. Posted by tammy on Monday 27th October 2008 09:20
hope you can help-i owe bank of america $6,000 when they wanted to up my percentage rate from 7.9 to 24.9 i put a freeze on my card and am making the monthly payments-i hate having this hanging over my head-yes i got in to a bit of trouble-i am on a fixed income from social security disability -is there a way i can get bank of america to cut what i owe atleast in half with out the intrest rate going higher?? many thanks tammy
2. Posted by Bill on Monday 27th October 2008 11:22
I don't think that Bank of America will be willing to settle on the debt just based on the interest rate increase. You could ask them for a settlement, but I doubt that they will agree, given that you are able to make your payments. Settlements are usually given only to those accounts that are past due by 6 months or more.