“Dear Steve,
My name is Andrew and I need help. I used to be really good at budgeting and saving money. At age 20 I had $7000.00 in the bank and a credit score of over 750. I screwed up really bad. Most was my fault but some was not. I lost my job due to the economy back in 2009 and lived off my credit card for over 3 months. I found another job and things started to improve a little. I paid of some credit cards but then again that job laid me off a year and a half later. So i was back at square one. Found another job and checks started bouncing and he eventually closed his doors. I have found another job and part time as well. But roughly 9 months ago I got a couple payday loans out and have had to get them over and over just to make end meet.
So to finally get to the point I have roughly 26,000 dollars in debt including my current payday loans and student loan. My student loan is 3500 and is current. so minus that I’m sitting at 22,000. So to sum it up I need a $12,000 to settle most of those bad credit loans. That’s a saving of over $10,000. But my credit really sucks and I can’t seem to find a loan. i Can pay roughly $500 a month on the loan as it will take my current payments off of everything else except my student loan which has great interest and I’m not worried about that one at all. So do I have any options or do I just need to keep trying what I”m doing and end up paying the 26,000 in debt in the long run?
Andrew”
Dear Andrew,
Life happens. Don’t beat yourself up over it too much.
You seem to be wed to a settlement approach but I have no clue if that’s even the best way forward for you.
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.
Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.
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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I’ve looked at all my options and this would be the best suited for me. I’ve even contemplated bankruptcy however I want to get this out my self. I’m doing Dave’s Snowball effect now but I was hoping to get a loan to knock my debt down to roughly 10,000. I don’t want to pay somebody for something I can do myself.
You make an interesting point when you say you don’t want to pay somebody else for something you can do yourself but when you take out a loan you are paying someone else for the service of borrowing money.
If your credit score is above 680-700 then a debt consolidation loan is available as shown in the calculator.
But, if you have a low credit score it is doubtful that you are “suited” for a loan since no legitimate lender will consider you.
What is your current credit score?
Equifax 518, TransUnion 530 Experian 524. I was in the 470’s a year ago but Its slowly moving up. I was just hoping maybe there was a way to squeeze a high interest loan that I could get to knock my debt to income ratio down. But I figured it is probably impossible to squeeze one in under 600 credit score. Like i said earlier the “snowball effect” is working but I was just hoping to speed up the process.
And in regards to paying somebody else for the service of borrowing money If I had money I wouldn’t need to borrow however I have the knowledge and skills to successfully negotiate with my creditors but no money to meet the negotiations.