When I was single after going through a bad divorce I accumulated approx 25k in credit card debt. I was able to pay the the payments every month on these cards of course until the credit card companies looked at how much my debt was overall and decided to decrease all my limits to what I owed causing me to look like a bad risk and in turn taking my 11% & 14% interest rates and shooting them up to 30% which is making my payment higher and the balances are never getting paid off. I wanted to see about consolidating with a debt relief company but I was told by several people that was a bad idea. Please help to tell me how to get off this financial treadmill
What is the best way to get my credit card balance paid down and do you recommend a debt relieft company for help?
It does not sound like bankruptcy is the first solution to consider here so let’s take a look at other approaches.
First let’s look at debt settlement. In a debt settlement program, if you don’t have at least 50% of the debt on hand as cash to settle you’d need to stop paying your creditors to pay the debt settlement company fees and save money towards settling your debt. That’s going to put your accounts in default, collection activity will start, you may get sued and get your wages garnished. It will result black marks on your credit report as well. So that’s not really an option here.
Instead I think you should first explore a credit counseling solution. In a credit counseling program your cards would be closed but depending on who your creditors are the interest rates would be significantly lowered. So in your situation my suggestion would be to first explore credit counseling. if you click here for credit counseling information you’ll find the company I’d like for you to contact.
Let me know if you think this approach is reasonable and what your results are with the credit counseling company.