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Thread: credit consolidation

  1. #1
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    credit consolidation

    Has anyone done credit consolitation? Or what do you think of the consolidation thing? Does this seem to work?

  2. #2
    Super Member mom-6's Avatar
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    When we had a lot of expenses to take care of that we just couldn't seem to get on top of, we refinanced our house and took care of it that way. Made getting our house paid off a longer process but kept the payments within our ability to pay and it was only a single payment each month. Down side, it was a single payment that had to be paid all at one time, no spreading things out over more than one payday (DH and I got paid on opposite weeks).
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  3. #3
    Super Member ptquilts's Avatar
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    Some experts would advise against that, taking unsecured debt and tying it to your home. Now if you can't pay, you may lose your home. On the other hand, you get a tax deduction.

  4. #4
    Super Member suebee's Avatar
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    Please just be very very careful. There are soooooooo many scams out there right now.
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  5. #5
    Power Poster ckcowl's Avatar
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    if you can get a (legitimate) loan from your bank to cover all of your bills- so you then have one payment to pay every month it can be a good way to go sometimes- but you need to really be (self-controlled) and not start any new debt- cut up the credit cards- cut back on everything- and make your payment on time every month-
    i had to get a consolidation loan when i had unexpected medical expenses, the car needed extensive repairs & things started piling up- i sat down with my bank loan officer with all of my bills- we rolled everything into one affordable loan- so i paid off everything- and had that one payment (which was about 1/3 of what my regular payments had been) bought absolutely nothing on credit- no new bills
    there are some (expensive) and dishonest agencies out there that offer debt consolidation but i recommend going to your bank- then you only pay interest- not hidden fees...and you have the control to make sure the bills are paid off- sometimes those (agencies) don't pay them like they should.
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  6. #6
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    I did it many times when I was younger and it worked great. We always did it through a bank and never had to have collateral as our credit history was unblemished. If you decide not to go that route you might want to talk to your insurance agent and have all of the bills to them ( homeowners, auto,Etc.) set up for monthly payments instead of 4 or 6 large ones due throughout the year. It costs 2-3 extra $'s to do this but so much easier on the wallet overall. Good luck to you.

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    Be careful regarding monthly, quarterly, etc. payments for house insurance: a few homeowners in my area have noticed the insurance companies are charging exorbitant fees for not paying yearly; $100 to 300 for installment plans.

  8. #8
    Power Poster nativetexan's Avatar
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    I used to work at a Bank in Houston and they always worked with consumer credit company who helped clients for free. the Bank is where they got their money. payment arrangements were set up and the Bank went along with it. see what you can find where you are. free and talk to a company you owe too and see what they say. anything to prevent people from going Bankrupt should be welcome.

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    If you have a credit union that's a good place to go, too.

  10. #10
    Super Member MaryMo's Avatar
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    Following Dave Ramsey's advice, talk to your creditors and attack bills by starting with the highest interest rate accounts. A Dave Ramsey course (offered through many churches) might be beneficial. It's not easy or fun but it does teach people/families how to budget. My thoughts are with you as you find a solution that works for you.
    Last edited by MaryMo; 07-20-2012 at 07:49 PM.
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  11. #11
    Super Member Sheila_H's Avatar
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    I looked into one time and they didn't have answer's to a lot of my questions, I ended up taking a free consultation with a Bankruptcy attorney and they will tell you want the best options are for you. The ended up arranging all of the creditors to come to an agreement a decent one I could survive on and not being afraid to answer my phone. Once an attorney is involved all I did was tell them here's the lawyers number you talk to him. It does still affect your credit score but it's better than bankruptcy and I was able to keep my vehicle and my home. I hope you find something that works for you.

  12. #12
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    When I was working at a local Woman's Shelter, we used to refer the women to a place here in town that was free. It was funded thru the United Way, so you might try checking with them. NEVER pay a fee... NEVER.
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    We don't own our home. I called our bank and they said that they don't do consold. loans any longer. With us being a little behind and a lot of credit do you think a bank or credit union give a loan to pay them off? And also do you to bank with a credit union? We don't bank with one.

  14. #14
    Member NanaBass's Avatar
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    We actually just finished paying off about $12,000 in medical debt and credit debt. We sort of did it Ramsey's way, but my husband and I weren't on the same page until the end of the process, lol. We called all of the creditors and asked for reduced rates. In my case they were really great about things and in two cases the creditors went from around 20% down to 9% interest as long as we scheduled automatic payments. This helped reduce payments considerably. With the medical bills, I just took them one by one and talked to them. Keeping them in the loop will help keep them out of collections. One doctor took 4,000 off of the bill so it wouldn't be a hardship to us. (I have to see him every month and he is really a good guy! If anyone needs a pain doc...) Anyways, after talking to everyone we found that we no longer needed a loan. From there we paid a certain amount to each one and when one got paid off the amount that was paid to them got moved to the next bill.

    Good luck. And Keep the Faith, things will work out!

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    Because we are from one to two months behind they told me that we need to be current to talk about lowering the interest rates. So now we are current with 2 of them. One have them has lowered it and the other one said that nothing can be done at this time and I have to keep calling back to check with them.

  16. #16
    Junior Member cmg625's Avatar
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    Quote Originally Posted by MaryMo View Post
    Following Dave Ramsey's advice, talk to your creditors and attack bills by starting with the highest interest rate accounts. A Dave Ramsey course (offered through many churches) might be beneficial. It's not easy or fun but it does teach people/families how to budget. My thoughts are with you as you find a solution that works for you.
    Check out www.daveramsey.com and you will get a lot of useful information there.

  17. #17
    Super Member Latrinka's Avatar
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    Have used consumer credit counselling before, was about 25 yrs ago tho. It works, but you have to want it to work and work with them.
    If a woman's work is never done....why start?

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    I just checked all of my options trying to figure out how to get things back on the right track and stop robbing Peter to pay Paul. My ex walked out last fall and going from a multiple income down to 1 is hard, especially when you are the only responsible one paying the bills.
    First, I went to my credit union, most offer a free program to help you out. This is how the program would have worked for me. They already know what creditors they can get to lower interest rates and who wont'. We figured out my monthly expenses and all and then how much I'd have to have in my bank at a certain time each month and then the bank would pay the creditors. You have to have the money in the bank when the payments are due. They make sure they are paid on time so that does help. The deal is that you close all of your accounts and agree to not opening up any new accounts until the debt was paid off.
    The good part of this is that everyone would get paid; but I'm already up to date with bills it just was a balancing act each month to keep them all paid on time. The program is free and unlike some of those programs out there, the bills would be paid on time and I wouldn' have to worry about it.
    The bad part is that I still wouldn't have enough money left over at the end of the month to build a small savings incase an emergency came up or I needed something fixed on my house. Plus it can have an effect on your credit ratings to all of a sudden close all of your accounts but if your credit already isn't that great then it would effect it less. Mine isn't that great due to the amount of creditors I have; this also effects your rating even if you pay them all on time. Due to this reason even though I have over 100,00 in equity in my house I don't qualify for a consolidation loan at the time. They suggested me to sell the house but it will be paid off in 5yrs and if I sell it to pay my bills then I have to find a way to rent for the rest of my life. Not a good trade off as far as I'm concerned. I had to think of the future along with my issues now.
    Then I went to talk to a lawyer and basically I could file Chapt 13, but due to the equity in the house I'd still have to pay all the creditord in full (which I have no problem with) of course that is without interest. I'd still only have a couple of hundren left each month not enough to save for an emergency.
    Both of these two ways would have left me in the same boat. First one I would eventually get my credit score built back up but for at least 5yrs I couldn't open up any credit so I'd be in trouble if something came up and I needed too. The second one is the same except it would be on my credit for 7 to 10 yrs and really hard to build up credit in both ways.
    I decided for me since I'm on time with my bills and I can do it; it's just really hard, that I'm doing it on my own. Suze Orman once said everyone wants to pay their highest finance rates off first. She said to pay the ones off that are the smallest and then each month take the money that you would have had to pay in a payment and add that to the next bill that you plan to pay off. I'm hoping that soon I'll be able to go back to my old system. I'd write all of my bills down, the payment due and then add the monthly finance charge to that payment and that is what I'd pay each month. I never paid the minimum. I tried once before getting creditors to lower my finance rate and had no success but I will try again; they can just tell me no. I know that I kept saying my bank but I actually belong to a credit union and have for yrs and would never do banking with a regular bank again.
    Since I started this process last month, I got Ford to refinance my car that had no finance charge for the past two yrs, they did it at %5 which I think is really good. They lowered my payment by $200 each month by stretching it out over a few more yrs. This month I don't have to make a payment so I'm taking that money and my money that I got back from my escrow account and pay off a bill. I couldn't believe that I got that money back. We have owned our house for 20yrs and this is the first time that I've ever gotten an check. God must be looking out for me and letting me know that I'm on the right track; for me anyways.
    Check with your bank or join a credit union to see if they have a program that can help you like mine does; most of the ones around here do. I know it's so much stress and I wish you the best of luck.
    Judy

  19. #19
    Super Member karate lady's Avatar
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    I just did a small consolidation....I have 3 credit cards and I paid off one with the other ( the third is my quilting supply card--no bodies business smile). put it on the smaller int rate one and it is easier to get it all paid off that way. At least it is for me. The other card is put away.

  20. #20
    Super Member vickig626's Avatar
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    I've used Care One Credit and it's been a Godsend for us. They are able to reduce your interest rates quite a bit depending on the company and get a reduced payment amount. Overall you can get a manageable payment and pay off these debts much faster.

    We used one years ago and it was a nightmare so definitely find someone reputable.

    Some people complain about CareOne because they don't listen to what they need to do upfront. The first month can be hard because you need to make a payment on your bills as well as the "new" overall payment to CareOne. After that, you're good to go. The reason for this - it's take about a month to get all the processing done. If you time it right, though, you might not have to do this step. You also need to call our creditors and have the due date changed a few days passed the CareOne payment that goes out. This also gets people in trouble causing late fees.

    If you want to contact me off list, feel free. I've been working with CareOne for about 3 years and they've been great.
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  21. #21
    Senior Member nclauri's Avatar
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    My husband and I racked up a large amount of debt. Our reasoning was we could afford the payments. Then the credit card companies jacked up the interest rates to 29% and would not tell us why (probably due to the large debt we owed). Over a couple of years I would call all the companies and ask them to lower the interest rate and they wouldn't. We continued to pay,never being late and never missing a payment. We were getting nowhere on the principal because our entire payment was going to interest. I called again. The representative told me the ONLY way they would lower the interest is if we missed a payment. Once we missed a payment they would refer us to a debt consolidation company. They (Chase) only worked with one company. I told the representative that I didn,t want to miss a payment. He said that was the only way they would lower our interest rate. I asked how low the would lower it to and they said 6%. we didn't want to miss a payment but at 6% we could actually start reducing the actual debt. So we missed one payment. That was 5 years ago. We were referred to Novadebt in NJ and they were absolutely wonderful. They always treated us with respect. We paid off over $100,000 in debt in 5 years . It was NOT easy. There were times we lived in substandard housing to make sure we could pay that monthly debt. We had two incomes, no children in tHe home so that helped. But, I will say every month one more payment was made, the debt lowered and it is now PAID IN FULL! It is such a liberating feeling. The debt consolidation did not hurt our credit. We have been able to buy a car and a very nice house. Good luck in your decision.

  22. #22
    Super Member kathdavis's Avatar
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    We refinanced the house for a lower rate and included other expenses in the mortgage and came out ahead.
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  23. #23
    Super Member ptquilts's Avatar
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    "My husband and I racked up a large amount of debt. Our reasoning was we could afford the payments. "

    This is where so many people get into trouble. If you could see, when you buy something for $1000, that over time you will be paying $1500 for it by paying over time, it doesn't look like such a bargain.

    Always better to save up for it and pay cash or equivalent.

  24. #24
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    If a consolidation company is accredited with the BBB are they still ok to deal with or do you still have to take the chance?

  25. #25
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    So far I have been trying to call consol. companies but the local numbers have been going out of town. My husband really wants to physically see someone locally. Our bank no longer does consolidation or personal loans. Are ther lawyers out there that consolidate other than the bankruptcy?

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