Do I need to have delinquent accounts in order to qualify for credit card debt consolidation?

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One Response to “Do I need to have delinquent accounts in order to qualify for credit card debt consolidation?”

1. Jeanne R on: 24 June 2009 at 4:40 pm

   Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plot. If you work the plot, the plot will work for you.

   A. Have a garage sale and sell anything that you no longer need or want.

   B.Get a temporary part time job, if you have one, get another.

   Here is a plot that can help you. If you work the plot, the plot will work for you:
   1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Place everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

   2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

   3.Pay the minimum due on all of your debts and then place your extra money towards paying off the highest interest one first. After you get that one paid off, you place the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off quicker. When that is paid off, you place all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

   To start :
   Debt #1 (highest interest): minimum payment+ extra payment
   Debt #2 (middle interest): minimum payment
   Debt #3(lowest interest): minimum payment

   Debt #1: paid off
   Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
   Debt #3: minimum payment

   Debt #1: paid off
   Debt #2: paid off
   Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

   That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

   4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Place that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

   5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a huge screen, or dinners out, whatever goal you want. Remember to delight in your life.

   5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plot at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

   5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

   You can do it and it isn't as hard as you reckon. Just follow the plot.