You are in a far more dangerous position than what you wrote

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 (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:

  1. The front based companies
  2. the incentive (or performance) based companies
  3. 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.

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.

Determining the right company

Is there is a simpler way to determine the right type of settlement company?

So the answer is YES.

Here is a simple mathematical way of determining which of the three settlements options to use. But the to re-cap the three types of settlement companies are:

Front-fee based performance (or commissioned) based do-it-yourself

The math expression to determine if the above is correct do the following:

your unsecured debt total x 60% = the overall settlement figures


$30,000 x 60% = $18,000

$18,000 is what you will have to pay out including fees, interest and other penalties.

How to figure out how much a month you have save every month for this settlement use this:

the total settlement figure divided by the number of months needed to get through the program.


$18,000 / 35 months = $514.29 a month.

Now, a performance based company has to be quicker than a front-fee based company so the number of months to ideally get through a program, for most states is 30 — sometimes 25 months depending on the state. I.e. New York requires a 25 month program ideally.

Front-fee based can be longer.

On the front-fee based companies sometimes you find that savings required by that company are less than that, but it would not be recommended as it draws out the program longer than the banks will comfortably allow and opens up to heavy pressure and legal cases.

For do-it-yourself, instead of 60% you use 40%.

I would use the equation to see if you qualify for a performance-fee based company first. If you can’t save up the monthly need amount then look into a front-based company which is more extreme. And if you can’t afford that monthly savings then do-it-yourself is the best option.

However, do to recent passed laws, there are 10 states that debt settlement is illegal in. In those states you either have to do-it-yourself or use an attorney.

I hope that helps give you some guidelines go to by. Of course there are other considerations so it is not the end-all, be-all to determining the right company… but it is a start.

If you can afford a CCC, then you don’t need one

My statement “if you can afford a CCC, then you don’t need one” is very simple actually.

Right now you are snowballing your CC. This is one method and it protects and IMPROVES your credit as you go along.

Dave Ramsey and John Cummuta have excellent programs when it comes to snowballing debt (or as sometimes called: roll-up).

The problem with the Dave Ramsey and John Cummuta programs is they do not tackle the enemy of the debt.

I wrote about this before, but your Daily Calculated Interest is what you have to battle.

The amount of interest that you are paying every month is astronomical. This is why people never get out of debt, and then fall into submission and go into agreement with the saying “you have to have credit (debt) to do anything, blah, blah,blah…”

By dramatically lessening the balance in your debts (mainly credit cards) you will free up more of your cash which can then be put towards paying off your debts faster.

Dave Ramsey and John Cummuta’s programs eventually get around to that…but not soon enough for a lot of people.

It might like I am cynical of those two…I am not. I like their programs. I even recommend them.

CCCs are just not a good solution. They do hurt your credit despite what they say, and they DO NOT have the intention of getting you out of debt. They want you to manage it.

So when the minimum payments go up think of what I said here. Look to better alternatives other than CCCs.

Debt settlement is good only if you have a valid hardship and cannot pay your bills monthly, so don’t look to that option either…unless you really have to.

Does this answer your question? If not, let me know.

Settlement? Great Directory, Ugly Question….

Hello to all,

I was recently as of 8/05/15 diagnosed with cancer and have been out of work since then and have god willing made a fully recovery. Unfortunate part is I had to take on 50,000 in debt with Chase, Bank of America and Citibank on C.Cards. I have been able to come up with a settlement paid in full (on my end). I have been negotiating with them and I am seeing roughly 20-30 % off of my total balance. I am going back to work and do fairly well in the Software business.

I am now living with a relative and have minimal expenses. My concern as I have read on these posts is the seven to ten year flaw on my credit. I need one C. Card for expenses as I am in sales.

1) Can I obtain credit rather quickly after my settlements?

2) I need to lease another (AFFORDABLE) car for traveling and how will the auto dealers look at my accounts as “Settled for less’ rather than “paid in full” as I have read on these excellent forums.

I truly believe that I only need one Credit Card for SALES EXPENSES ONLY….and a debit card for my purchases.

3) Will I get wacked in interest with a new card?

My credit has been very good up to my illness.

Should I try to get the Credit cards to come down more on my settlement. My theory is they have been wacking me with high APR’s since 1997 and besides getting them to come down more cant hurt? I read on a previous forum here that I should try and get them to come up with the settlement as “PAID IN FULL’ rather than settled for less.

This forum has great answers….. Bless you all and may your new year be “spent conservatively”

Warm regards.

You have good questions.

I don’t know why you have the thought that you need a credit card “for expenses” because you are a salesman. A debt card will do everything that a CC will do, but you are not using credit.

If the CC is a business card and the company pays for it, then it will not be a problem to get or use, unless your credit is really bad…I mean REALLY bad.

Banks want you in debt. The more you are debt the better for them. IN your case they will be more than happy to give you credit again after a settlement because they can charge you much higher interest which equates to profits for them.

So yes you can get a credit after settlements. It is usually quite easy to any kinda loan after settlement.

Remember that banks want you on debt.

If you lease a car then I will personally brand a big, fat “L” for loser on your forehead and make you carry a sign saying “I am worlds stupidest person” every where you go.

(Why people think they are getting a deal when they lease a car boggles my mind)

Get a good used car that you pay in full for. If it is good enough for Warren Buffet then it should be more than good for you.

From your post, it seems that you wish to get yourself right back in the same position you were before you got sick…didn’t you learn your lessen?

Credit is not good. Credit is debt. Debt on any account is a liability no matter what the get rich rich real estate gurus say. There is no such thing as “good debt;bad debt”. There is only debt…and it is a liability. PERIOD.

But hey, if you like pain then go get a credit card and lease a car…more power to ya.

Just don’t come crying to us for help. Ya made your bed and you’ll have to lie in it.

Settlement/cccs question

Hi guys, can anyone tell me the difference in reporting done to Credit Bureaus for a Settlement of 50% or a clear charge off. The amount is 6,000 and both will be reported but what is the difference in the score/value change?

Also if already off of cccs and now can work with the debtors direct…Is it a good idea to return to CCCS? Fab

The wordage that the creditor’s will use when you settle will vary as wildly as there are companies.

Most will state something in the order of “settled as agreed” or “paid as agreed”. This is a negative on the credit report as far as scoring goes.

How this actually will affect the scoring is not known as the the for-profit company that runs the software for derterminign this score (Fair Issac, Co or FICO) keeps this confidential.

When you do a settlement you are put into the credit category of R9 which means charge-offed account. When you are on a CCCS you are put into the category of an R7 which means in a management program. This is the same category that Chapter 13 bankruptcies are put into.

CCCS have often been called a poor man’s bankruptcy. See why above.

Usually, when you leave a CCCs on your own choice you can return back to it, but not all the time. If you have been kicked off for one reason or another, usually you can not rejoin again.

Most banks will see that you are doing a CCC again and will not allow you to do the program even though the CCC accepted you. That is your biggest danger if you decide to re-join a CCC.

But, as I have said many times…if you can afford a CCC then you don’t need one. There are other, more beneficial programs that will not hurt your credit and provide a much better service.

Hope that this helps.

I’m new here and was hoping you could expand on this statement or point me to some reading. What sort of programs? I don’t feel I need a CCC, I make my payments and snowball one CC at a time. But I am very concerned about the impending minimum payment jump and what’s going to happen then. I understand I got myself into this mess and am working hard to get out…just seems like a never-ending battle someday.

“if you can afford a CCC then you don’t need one. There are other, more beneficial programs that will not hurt your credit and provide a much better service.”

If you really want an education on debt reduction and some answers to your basic questions, please visit the recent archives section of this Group’s website. Read the messages from the last 2 weeks and you’ll gain an education.

Good luck and let us know if you have any questions that aren’t answered there.

Getting a Budget Started

I know how to Average my bills and divide them by the amount of pay periods in a year to come up with a weekly amount to put away strictly for home finance but I just cant figure out how to get it started. how to get out of this tornado where a bill comes in the mail and THEN I raise the money to pay it, or where most my utilities are a month behind, etc. I know how to make a budget on paper but how do I get it rolling when I’m behind to begin with.

How do I get an entire months worth of bill money saved up so that putting a weekly amount away for bills will give me the next months bill money at the BEGINNING of the month, So that when a bill comes in the mail I can just simply walk over to my desk…. Write the check…. seal the envelope…. and put it out in my mailbox for pick up???????????

Do you get a tax refund? If so catch up with that then, take whats left and build up with that. That’s what has allowed me to pay down alot of my debt, but still working on some old debt as well.

Settlement question

When figuring out your offer-do I take what I originally owed and go 30 percent of that, or the amount I owe now with all the late fees and over-limit fees? Thanks for the help.

Very good question. You should try from the original debt first. Sometimes that will fly, other times it won’t. But it never hurts to ask. Let me know how it goes. In 10 states, if I live in that state I can not have a settlement company represent me? But I can still represent myself? Where do you find these laws anyway? It seems to me that there are way to many differences state to state, it is so confusing and I’m starting to believe they want it that way. I would call my state attorney, but I don’t even know what to ask them let alone if I’m calling the right office. Thanks.

If you live one of the states that have recently passed laws barring for-profit companies (which all debt settlement companies are) it is illegal for any debt settlement companies to settle your debts….

even if they are in your own state.

Of course, that stop most companies from trying anyway. If you do go with a company you run the risk of the FTC shutting them down and leaving you high and dry…and the FTC will shut them down. They have a long history of doing this.

You can still do a settlement yourself, or you can use an attorney to do settlements for you.

Watch this video with some tips:

A word of caution, there are some debt settlement companies out there that say they are an attorney, but really aren’t. An attorney may lease out his name for the purpose of the company, but it will NOT be an attorney that settles your accounts. Also the attorney has to be liscensed in your state. Most attorney debt settlement companies do not have licensing in all 50 states.

My advice is, if you use an attorney make sure you can physically walk and talk with him/her.

Of course this is a very expensive route. Better to do it yourself.

Every state does have different laws when it comes to debt. Even though bankruptcy a federal mandate, there are still state laws that govern these procedures.

CAs are not only mandated federally but in the states themselves (not every state though) despite the advice that has been posted here to the contrary.

You must understand that banks have only one purpose: That is to put you in debt. And legally they have only one responsibility…

To make as much money as they can.

So, they accomplish this purpose with two agenda:

…to figure every way they can to PUT you into debt, and

…to figure out every which way to KEEP you in debt.

The new bankruptcy law was bought and paid for mostly by BoA. By one report I read BoA spent over $140 billion dollars themselves. This money went to your congressman/woman. Your representatives are getting rich because you voted them into office.

These states laws are just extensions of that.

Factually, by passing these new laws in these states, your congress is basically saying that they want you to stay in debt…brutal but true. Your congress is not working in your best interest.

The good thing is that laws can be changed and/or repealed. But you will need to step up. Remember we fought for this country’s freedom because of unfair taxation…is this any different?

Maybe this is not the best news, and I am sorry. But there are things that you can do. Don’t vote for those that will rob from you, and do the settlement yourself.

Mvelopes… anyone?

Does anyone use MVELOPES or know of anyone who has and their thoughts and comments on it? Thanks!

Nope, but I did checked it out because I thought you had simply mispelled the word envelopes 😉

Looks very good but a little expensive to me. I just recently switched to Quicken 2006 and I think it has a very good budgeting tool and the online capabilities are very good. I’ve been impressed by how much information I now have control of.

After digging around the Mvelopes site as well as the fact that they are affiliated with ministries it looks like a very good but fairly expensive plan. If I hadn’t just bought Quicken I might be *suckered* into it myself.

I have just been reading posts for a little while. I recently became unemployed and was worried about finances. I have used Quicken but never was happy with the budget part. Currently, Quicken 2006 retails for nearly 60 dollars. I do not have a spare 60 bucks. I just signed up for a 30-day free trial of Mvelopes. Here is my take.

The system is based on the “old fashioned” envelope/cash system. If you got a paycheck of 1200 dollars, you would cash it. Let’s say you had 12 expenses each month like rent, phone, gas, water, rent etc. You would take the 1200 dollars cash and put money into each of 12 envelops (distribute the cash as needed for each bill) Cash today is a cumbersome thing. Can you conveniently pay for rent/mortgage with cash? Mvelopes makes an envelope system online. When the paycheck is deposited into your bank, it registers as “cash pool”. You set up your envelopes/money based on your bills. When you pay bills online, the transactions are matched and deleted from the “envelope”. You always know how much you have in each envelope. If you spend more money than you made for in the budget, you must take it from another envelope. At the bottom of the screen, there is the real-time balance of your bank account. You cannot overspend. For me, finding a tool that is both a one-stop-shop for all my bills (there is an online bill pay option included) and offers real-time tracking of my checking account is well worth the 13 dollars a month.

When my husband and I had two incomes, we never were able to save. I always heard people talk about how a budget helps. In the past, I tried to pretend I used a budget but never was held accountable. With Mvelopes, there is online accountability. Every bank transaction, ATM withdrawal, deposit, and debit is registered. If I spend 75 cents on a Diet Coke, I cannot “forget” about writing it down, as it will show up in my register on line. I must account for all my money and balance it. Since I started the Mvelopes 2 weeks ago, I have managed to create an envelope for vacation and for savings! Now, with less money, we are saving 10 percent and putting some (maybe 3% ) away towards a vacation. I think it is well worth 13 dollars a month. More important, my husband cannot forget to tell me he made an ATM withdrawal or wrote a check! That blew our checking balance on more than one occasion.

I am very fiscally undisciplined. That is why I am having money woes now. I was a slave to the idea that if I could make the monthly payment, I could afford the item. That did not account for job loss or decreased income or car repairs or sick kids/ emergency room visits or anything else that life threw my way. Now, I am learning to live with less, account for more, and really budget my dollars. I feel that this tool is good for those who are undisciplined with money. I have not made my first 13-dollar payment, but I feel it will be well worth my time to make this system work for me. I see it as an investment in my future.

Good cccs alternatives

Thank you for your last response very helpful What are the alternatives to cccs that would help someone. I have contracted for a home (now renting) in an innercity whichh will be worth alot in a year or so. But my credit score is slowing my qualification.What program can I joiin to show good faith so I can be given a qualification. I have already found some city money based on income but to qualify for the final 70,000 is a killer. Need advise for the programs to go to.

The program is called “make more money or buy less house”. There are no easy solutions to “fix” this. If you are trying to buy something that you can’t afford (banks have formulas that work or they wouldn’t disqualify you…trust me. They want all the loans they can get) then you might just have to realize that now isn’t the time to buy that house.

The way we all got into this position (debt) is buying things today with tomorrow’s money. Nothing like a foreclosure to make sure you avoid it in the future.

Please stop and think before you stretch too thin.

You are looking at “quick fixes” and I just don’t any that are reputable.

Fixing credit or establishing credit takes some time. You just must get out of of the GRQ (get rich quick) mentality if you ever want to succeed. Sorry, I can’t help you there. Maybe there are others that would know something. Me…I stick to the tried and true.

Can a CA do a payroll garnishment? I have not had any judgment notices.

No, a CA cannot garnish your wages.

The only way your wages can be garnished is by court order. So you would have to have had a judgement against you before your wages could be garnished.

If a CA said this to you then they violated the FDCPA and you should report them to the FTC, your states Attorney General office, the BBB and other consumer organizations. If they continue to do this then sue there butts. You may just get enough money out of them to pay off yoru debts:D

I hope that this helps.

Please read the Fair Debt Collection Practices Act for information on your rights and what a CA can and cannot do.

I guess I appreciate your response

I believe you are right credit messes up people’s lives terribly. It appears you may have read my message at a bad time personally. So, if I buy a car and keep it up to 200,000 miles how can someone negotiate a reasonable monthly payment as I am shelling out a large lump sum for my settlement.

It would be nice if all of us could “OWN EVERYTHING’ with no debt anywhere keeping in mind real estate is somewhat the best risk.

In agreement to your reasoning I just saw someone blow all the liquidity from a house on ridiculous credit cards. Sad to watch. I do very well believe that a cash debit card is excellent. NO APR’s for the vicious creditors. So, I will reevaluate my thinking to this. So It is wise to say if you don’t have cash immediately in the bank don’t spend what you don’t have……

So, if I buy a car and keep it up to 200,000 miles how can someone negotiate a reasonable monthly payment as I am shelling out a large lump sum for my settlement.

=== This is not she but I believe that what she was trying to say is leasing a car is not your best option. I am not sure what you are trying to say in the above statement.

What kind of vehicle are you driving now? Could you continue to drive that same vehicle and save up what you would have paid each month to purchase a “newer to you” car?

Just some ideas for you.

What you said may be hard to swallow, but you were right. Work on changing your thinking toward not buying what you don’t have money saved up to pay for. I “amen” everything he said. 😉

I know that I came off strong, but I really wanted to impart that message. And, Yes, if you don’t have the cash for a purchase right then, then you can’t afford it.