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7000 Peters Creek Rd., Roanoke, Virginia
1-866-260-5994 |
CCCS of Southwest Virginia |
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Debt Consolidation |
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I have about 35 to 40 thousand dollars' worth of debt. I have
failed with Debt management agencies in the past. In addition, I have fallen
into another trap-- check writing with three different cash advance stores, and
I don't know who to repay first. Can somebody help? Randy
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Dear Randy,
We
consider bankruptcy as a last resort, but it is necessary for some people. One
reason debt management can be such an effective alternative is because it helps
teach people responsible spending habits-- something that bankruptcy does not
do. If you want to try a debt management plan again, please call 800-762-2271.
Your counselor might also be able to help you with some budgeting
techniques.
If you do choose to file, please understand that you will
have to be extremely committed to making some life changes so that you do not
get into this situation again. You should also know that not all debts are
dischargeable. Debts not dischargeable in bankruptcy will generally include back
taxes less than 3 years old, student loans, alimony, child support and debts
incurred through fraud. To avoid foreclosure or repossession, you must make home
and auto loan payments.
Best of luck with your
decision,
Susan
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What is better debt negotiations or consolidation? What is the
difference?
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One is not necessarily
"better" than the other, it depends on the individual's situation. Taking out a
consolidation loan works for many people, but is not the best choice for
everyone.
To obtain a consolidation loan, the first hurdle will be to
qualify for the loan. Your ability to get a consolidation loan will depend on
your basic qualifications (i.e.: income, credit history, etc.), the amount of
money you are trying to borrow and the collateral you have to put up to
guarantee repayment of the loan. If you have the three primary qualifications
which are, the ability to repay the loan, the credit background to verify your
repayment record and the necessary collateral to guarantee repayment, you should
get the loan. Lacking any one of these three qualifications could result in a
denial of your request for the loan.
If you do qualify, you may be able
to obtain a "good" interest rate and the interest may be tax-deductible (for a
home equity loan). However, you also need to consider the length of time it will
take you to repay. To understand the true cost of credit, figure out what you
will be paying over the life of the loan, rather than just looking at the
monthly payment. Be sure to factor in any closing costs.
Warning! If you
do choose a consolidation loan, be sure to close all your existing accounts. Too
often, the zero balances are too tempting and the consumer ends up twice as in
debt as when they started.
You might want to consider a debt management
plan (DMP) as an alternative. The DMP acts like a consolidation loan. It is a
voluntary arrangement between you, MMI and your creditors. Through the DMP, your
counselor should be able to negotiate a repayment plan with your creditors. This
may include such benefits as interest rate and fee reductions. You agree to
include your unsecured debts on the program and make one deposit each month to
MMI. MMI will then distribute the agreed amount to your creditors until your
debts are paid. To talk with a credit counselor, call 800-762-2271.
Best
of luck with your decision,
Susan |
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CCCS, A Division of Money Management International
Regional Headquarters - 7000 Peters Creek Rd., Roanoke, Virginia
Corporate Address - 9009 West Loop South, Seventh Floor, Houston, TX 77096 |
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