How to clear credit card and other debts?

Question

I have been searching the internet for a way to clear my debts brought on from my divorce. I have noticed a few companies which claim they can write 100% of debt off but @ a cost of £2000

Is there a way that i can do this myself without the exra cost of the £2000, as I cannot afford it.

Answer 1

Reduce your monthly outgoing by merging all your debts into one,

Here is a form that search for the best solution according to your circumstances:

http://www.financecomparator.co.uk/conso...

Answer 2

Start with the smallest debt, put as much as you can till it's paid off, then go to the next, put the money you were paying on the other on this one and so on!!!!!!!!!!

Ohhhh and when you pay them off...don't cancel them. AND DON'T use them either. It brings your fico score up!

For more free articles on debt relief and geting what you want, visit http://get-out-of-debts.blogspot.com/

Answer 3

Please don't pay all that money to get your credit fixed; use it to pay off your cards! You can take care of the errors yourself. I had wanted to improve my credit and had talked to different companies; all of which PROMISED to improve my credit all for the low low cost of a couple grand. Ridiculous! To me, it is silly to pay that kind of money (which I didn't have anyway) when with a little effort, I can do it myself. I got a "Do It Yourself" credit guide online (that my husband's friend had used as well and recommended to me) http://raisemycreditscorefast.com/answer

I have only just started but so far on Experian, I have gone form 14 negative marks to just 3....and it showed me that all of these are supposed to fall off by April 2009. I am now moving on to Equifax and TransUnion. I hope that this has helped :)

Answer 4

No matter what you do, you'll have to pay something.  Work out a payment plan.......

Answer 5

First off, I wouldn't contact any companies you find on the internet. They could very easily be scams, especially if they're asking for that much money. Not to mention that these companies NEVER get you out 100%. So claiming they can seems fishy to me. Open up the phone book and look for more reputable debt consolidators.

Debt consolidators simply consolidate your bills, which makes it seem like they're saving you thousands of dollars when, really, they're only cutting out the interest...if you're lucky. Say you have 20 thousand dollars on 4 cards... and they're all high interest (over 25%). so you've got 4 cards with a minimum payment each month of about 200 dollars or more (800 a month). What the consolidators do is get all of your bills together in one to give you one smaller monthly payment of 500 a month. You still have to pay your debts-- there's no magic service that will wipe out what you've charged. But they make your overall monthly payments lower because now you're only paying 1 or 2 bills instead of 5.

There are other forms of debt relief, too, where they negotiate with your cc company to get your interest down to extremely low percentages, like 3% for a year. The cc company agrees because while they aren't making as much money off of you, at least they're getting paid. it's better than nothing. and 29-31% interest to 3% interest is a HUGE difference in your monthly payment- hundreds of dollars. and almost ALL of your payment is going toward the principle balance whereas, before, almost all of it is going toward your interest, which is why no matter how much you pay the balance never seems to go down.

Your consolidator will negotiate a minimum monthly payment for you and you'll stay on the plan for however long the cc company agrees-- usually 1 year. in the case of discover card, for instance, when the year is up and you've paid down a lot of the debt because you aren't really paying interest (so that 5 thousand dollars on that card in now down to 2 or 3), they'll put you back to the original interest rate. in some cases, you may be able to ask for a continuance of the special rate.

however, there are some drawbacks. as someone who used to work for a credit card company, you need to be aware that the moment your cc companies find out you're even talking to consolidators, they'll close your accounts-- just for talking to them. you may not even decide to do it and you just call for information. If the CC company finds out, they'll close your accounts (meaning you won't be able to use those cards again, ever). When a debt company like these calls the cc company to see what your interest is and to get you on a payment plan, that's a warning to the cc company that you may be a payment risk and they may lose money. So they stop you from being able to charge anymore, usually permanently.

So while it seems like a great deal to be able to consolidate and pay off your debts at a substantially lower rate, remember that you won't have charge cards anymore, and you probably won't for at least 5 years.

you'll have to make all of your payments without missing any, as well. they're giving you a great deal by lowering your interest so much to get you to make payments, so they expect you to not 'forget' or have any problems. i'm not sure but i believe that if you miss more than 1 or 2 payments or are late more than a couple of times, they revoke the deal.

also, your credit is now pretty much shot the minute you have to negotiate payment. that's something you can work to get better, though. but while paying off the debts, which make take years, buying a home, a car, anything of value will be next to impossible. you could be denied jobs. You'll also have a hard time getting credit cards back after you've paid everything off. CC companies aren't going to want the same thing to happen again. So if they do give you a card, it will start at a very, very high interest rate. that's just something you have to accept going into it. but hopefully you'll never have this problem again.

So you'll have to decide what you want to do and if the situation is so bad that there's no other option. often, though, there are solutions you can try before going to the credit councilors.

Take a look at your cards and what they offer-- one may offer an extremely good deal on balance transfers (often you can find some that are 0% for a year). so transfer your 5 thousand balance on one card to the new card and cut out all the interest you're paying, not to mention that all your payment is going toward the principle, so that 5 thousand will go down pretty fast, as will the minimum payments.

Do you know someone with decent-good credit who would be willing to co-sign a loan for you? Getting a loan from a bank could easily pay off your bills, and paying the bank loan is MUCH easier than paying the cc's. Interest is tons lower and, best yet, it actually helps your credit as long as you don't miss payments. Your cards would be paid off and still remain open, your payments would be lower, you'd have only one bill and, if you pay it off without problems, it would actually boost your credit score.

and while it's kind of icky-- you could sue your ex. if the charges on the account are partially hers, then she's responsible for them as well. especially if her name is also on the card. then she's legally required to be responsible for half--- even if all the charges were yours.

Answer 6

All those companies do is take your money and make the payments for you (i.e. money management) and charge you a pretty penny for doing so.

It sounds like you inherited this debt, it wasn't from your lack of discipline.  In any event, you need to work out a budget.  Pay off the smaller debts first, then use the money from those payments to attack larger stuff.  It's not easy, but that's the way it's done.

Also, talk to your creditors and explain the situation.  If you are making a good faith effort and paying something, many of them will work out a payment plan or lower finance charges, etc.

Answer 7

these compaies will put you through an IVA, which is like a bankruptcy only you dont lose your house. - lets be honest chances are the divorce already did that anyway.

where IVAs are nasty are they run for about 5 or 6 years and still ruin your credit same as a 1 year bankruptcy. and you still have same restrictions put on what you can and cannot do.

but firms that charge you up front are not a good idea.  legally to spend money on your cards etc, knowing you are about to do an IVA is a criminal offence. I bet they ask you to pay on your credit card though.

companies with a good reputation get their fees from the people you owe the money to.

oh and 75% of the people you owe money to have to agree to it, they dont tell you that bit in the adverts either.

Answer 8

Don't fall for this scam. It's better to try work it out with your creditors.