“Dear Steve,
I tried to run my own business and failed, got sick and am only now ready to return to work.
With over $45K in credit card debt, another $40K in home equity debt, $15K remaining on my first mortgage and another $20K in loans from my life policies, I have dug myself one hell of a hole.
Franklin Debt Relief offered the following advice:
Maintain at least one card with less than a $1K balance that is not part of the debt relief.
Negotiate the $45K to $27K and take 36 months at $750 a month to pay it off. Expect my credit to be ruined for some period of time, but rebuild it and show every creditor that I have taken steps to deal with my debt and make regular payments.
Pay Franklin a $9K fee to perform this service, as part of the $27K. So, my debt is being settled for 60 cents on the dollar, with only 40 cents of the dollar going to my creditors.
Escrow three months of mortgage payments, and stop paying my mortgage. Go to HUD and get on some Obama program that will redo my home loan and home equity line of credit on a 30 year.plan at 1% interest, and still avoid foreclosure.
Gregg Wright never fast talked me, just shared stories about his own failures and
seemed genuine. But, at a $9K fee, what the heck am I getting myself into?
Should I even consider this plan, or am I setting myself up to be a debt pariah for life?
Robert”
Dear Robert,
If you could provide me with some additional information that would help me better answer your question.
How much is your home worth do you think?
Is the only obligation against the home the $15K mortgage and $40K home equity?
Do you have a job that you are returning to?
Please post your responses and follow-up messages to me on this in the comments section below.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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My home is worth roughly 145k; the 40k line of credit cannot be
extended any further. Â We asked our bank to consolidate the line of
credit with the mortgage (currently about 4.25%) at a lower rate.
 Denied.  These are the only obligations against the home.
As for the job, I am going back to work this month, but it is all
commission once again, which is part of what led me into this mess.
The HUD information does not seem logical. Defaulting on your mortgage, especially with as much equity as you have could easily set you into a tailspin.
On the debt, let me help you get some clarity on the reality of dealing with it.
Let’s start with the basics.I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.Then use the free How to Get Out of Debt Calculator to review your options.After that, come back here and comment about what seems to make the most sense and let’s discuss that.Does that sound like a reasonable approach?Steve