Question:

My husband I lost our business/jobs a few months ago and got behind on our credit cards. What can we do?

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We signed up for credit counselling to consolidate, but they are charging service fees (supposed to be non-profit). We are so behind on our utilities as well that we'd rather pay the utilities right now than the credit cards. I just wish they can remove the late fees and huge finance charges they added to the amount we actually borrowed then we may actually be able to pay it off. We don't owe that much but the fees they added made it huge. We want to pay it, but how can we if the fees they are adding is bigger than the payment we can afford? We're just trying to get back on our feet.

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6 ANSWERS


  1. Check out this website and their free evaluation form ; they can help:  www.totaldebtsolutionsllc.com    My mom used them with some success.  Good luck.


  2. I suppose it's too late to suggest "living within your means", then.

  3. Ok, sudden job loss is horrible, but there are things you can do. Pay the utilities, that is a smart move, contact your state's attorney general's office about the non profit charging you, that's a criminal offense. Call the credit card company, explain your situation, if you can borrow the money to pay the credit card off completely, from relatives, or friends, do so. Get the card off  your back as soon as possible. When you call the state's attorney general's office, report what your credit card company is doing as well. Call, do not write. OR you can email, report fraud, etc.

  4. I wondered about those supposed non-profit credit consolidation ads.  It didn't seem logical that they could be doing this without making a profit.  

    I don't know if it is the same in all states, but in some, if you make a payment to them every month, even if it is only $5, they can't take any legal action against you.  They will keep on adding those terrible fees, though.  If you can hold out until Obama gets into office, that's one of the things he plans to stop, predatory lending practices.  With the way things are right now, there are no limits on them.

    I'm not certain about this, so you will need to check, but I think that if you close the credit cards, they have to stop adding on.  At least it used to be that way.  You will have to tell them in writing.  Pick out the name of a lawyer in your town, and put cc:  lawyer's name, Attorney at law on the letter, and keep a copy.  You don't have to necessarily go see the lawyer, and if he doesn't know you or hasn't dealt with you, he will probably throw it away.  But that isn't the point.  The point is to make the creditors think you have a lawyer and that you are going to make trouble for them if they keep adding on fees once you close the card.  As long as you don't actually make any claims about the lawyer having done anything, you are OK.  Just tell them in the letter that you want the account closed and that, if they add on any additional fees, you will turn it over to your attorney and sue them for usury.

    This used to work, and I hope it still does.  Anyway, it is definitely worth the price of a postage stamp to find out.  They will continue to call and write and make all kinds of threats, but if you pay them something every month, they can't do anything to you.  If you don't have a phone with an answering machine on it, or have caller ID, you may want to get one so you can screen your calls, because they will be calling constantly.  Good luck!

  5. Pay your utilities first. A non-profit agency can charge a set service fee to cover their own expenses. If the agency you used is charging a service fee every single month thru the entire life of your plan then that is fraud on the agencies part. You can contact the Attorney General of your state and report them.

    It sounds like you might already be at the point where you might need to file bankruptcy. Many of the more reputable bankruptcy attorneys offer a free consultation.

    I've been down that same road except mine was caused by a potentially serious illness (walking pneumonia) brought to work by an ex-employee. I started out with a debt management plan that I signed for when I went to credit counseling. The agency I used was also a non-profit, Money Management International. They did charge a flat $120.00 fee (paid in 3 monthly installments with the regular payment) to cover their own expenses. I did eventually have to file bankruptcy (Ch 13) a few months after my employer cut my hours. I didn't really want to because it damages the credit rating. ..but the more I thought about it the more I didn't care about the credit rating because all the worries were negatively affecting my health and my life.

  6. STOP USING A CREDIT COUNSELOR.

    Most of these are scams.  They want you to pay for stuff you can do on your own.  The best thing you can do is confront your creditors.  If they know you are trying in good faith to pay your debts, they will work with you.  Rarely, debt consolidators will ever save you money.  They simply lower your monthly payment by a fraction, only to have you paying way more over time.  You are better off paying the late fees imposed by creditors than some of the scam artists

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