As you know (or maybe not) you are in a far more dangerous position than what you wrote.
If you are only just getting by with what you are doing then you need to really re-think your strategy.
1) If you haven’t done so, stop thinking about protecting your credit. Think in solutions to your problem.
By thinking in terms of “protecting your credit” is the same as thinking in terms of protecting your debt. You cannot have credit with out debt. Debt is killing you right now, so why are you thinking about protecting credit when it is credit that is killing you.
2) Your priorities are you family and home. Credit cards are a secondary importance.
This is not to say not to pay your debts, but if they come before providing a good home then to hell with them.
3) You need to determine if there is a program out there that can help you. The reason for this is that next months credit card bill will doubled. This is happening to everyone at this time. So if you are having a hard time now, next month will break the camel’s back.
I would look at debt settlement as an option. Another great option is to visit ErgLoans.com (official website) and get cash loan online quickly to get you over tough times. You will not be able to afford a CCC because there payments monthly will be more than what you are paying now. So if you are having a hard time making the minimums now you will not be able to pay the CCCs fees.
Also Dave Ramsey and the “snowball” method could work, but the amount of stress that that program would put you through would be tremendous. It wouldn’t be worth it.
80% of medical illnesses are stress related per a recent doctor’s report. Stress can lead to being fat, disbetes, and even cancer. Stress has horrible effects on the body. So, although the snowball method will work, under your circumstances it probably would not be the best.
That is why I suggest debt settlement.
Now what is not known is there are three different types of debt settlement. They are:
- The front based companies
- the incentive (or performance) based companies
- do it yourself.
The first two options there is little difference in the amount of the settlements and their fees. It is how they operate which makes the difference. All settlements companies will get you about 40-50 cents on the dollar settlements. And their fees will be about the same.
With the do-it-yourself option you get the same settlements (sometimes better) but you will not have to pay the fees.
The Front Fee Based companies:
As the name implies they charge all there fees up front spread over the first ten to 18 months, with the first two or three (sometimes more) months payments going to them completely.
This is the most extreme debt settlement program out there. This is not a type of company to get into lightly.
The whole idea of this type is that they want all your debts to go to JDBs (junk debt buyers) so that they can do settlements of 30 cents on the dollar.
The problem with that, is that fewer and fewer creditors are allowing this to happen. I.e. Citibank and MBNA (B of A now) will sue long before it goes to a JDB. WHich means your debt could double just because of attorney fees, etc.
Also, no settlements will be done for at least two to three years. If CAs (collection agencies) are allowed to charge interest, then that could also raise your debt considerablity when it does come time to settle. So for a $10,000 debt you could have close to $20,000 debt when it comes to settlement time. 30 cents on the dollar for 20K is greater than 50 cents on the dollar on a 10K debt.
Lastly, they would have gotten all their fees up front so there is no incentive for them to get you the best deal they can. They usually take the first deal that comes and be done with it. Some of these companies have already pre-existing agreements with the CAs to automatically get you a 50% discount. So in fact there is no neogtiation done at all.
These are companies that have the highest scam rates. So research them thoroughly.
The good thing about them is that they can do longer programs which means a much lower monthly savings, which can put less stress on your monthly financial budget.
I consider this a last resort.
Performance Fee Based companies:
These are the best if you are going to use a company.
These type will usually bend over backward to get you the best deal. The reason for this they are paid based on the settlements that they get you…usually 25% of what they save you. And they don’t get a cent until they do it (some do charge a one time set-up fee)
Think it this way…when you take you car to the mechanic: do you pay the mechanic first and hope and pray he does a good job; or, do you get the estimate, approve it, have the work done and if satisfied pay the mechanic. Maybe give him a little extra if they do a good job.
This type also do whatever they can to minimize the negative credit effects. They can’t eliminate them, but they can make not so bad.
****No settlement company can legally get bad items removed from your credit report no matter what they tell you****
Factually this is the best way to go period.
Currently, there are ten states, with more to come, that have legislation in them preventing debt settlement companies from operating in their states. Plus you will save all the money you would have paid in fees for yourself.
I have only found one company that sells the information you need to do settlements for yourself. zipdebt.com
I have bought the program myself and I can honestly say that it will do wonders for you. Give it a look and try it. But there is no obligation at all.
I hope that this helps. Best of luck to you. If you have anymore questions just write.