Should I make payments on my debts?

Question

I owe 15 companies a total of 4000 dollars and my FICO score is in the 400's. If I start paying each company 5 dollars a month...and set it up on automatic bank drafts, will this help me? How much will it help me? Is the amount so low it won't help? When you see 15 debts but I'm making current payments does that look "good" or is 15 debts so bad the payments don't even matter?

Answer 1

Can you pay the min. on all but the lowest balance and put the rest towards that one?  Then you can roll that into the next lowest  once the lowest is paid off.  It's called the debt snowball.

Answer 2

if you don't pay at least the minimum on every card they're going to put negative reports against your credit. have you considered a credit counselor or a reputable debt consolidation company to try to combine them all into one lump sum? that way it would be easier to pay everything off. good luck!

Answer 3

You need professional advice.  These folks can help.  Confiidential and secure.  http://www.mb01.com/lnk.asp?o=1495&c=217...

Answer 4

ok you need a debt snow ball. Take the smallest amount owed and stay current withe every one else (which you haven't been judging on your scores) and pay them off as fast as you can. Then take what you were paying them and ADD it to what you are paying the next lowest amount and get them done faster and ADD that  one and just work your way up and pretty soon you can clear these little debts and be debt free and don't s***w yourself in the future

Answer 5

Is $75 a month really all you have available to pay off these debts?

Answer 6

Unless you are paying the minimum amount due, just paying $5 per month on each debt won't do you much good.  You'll still be delinquent and bill collectors aren't too impressed with token payments that don't make a dent in the amount you owe.

Your basic problem is that you are either unwilling or unable to contribute a large enough amount each month towards eliminating your debt.  You are thinking of making only a total of $75 in payments, but the interest alone on $4,000 in debt is over $80 per month, assuming a 25% interest rate.  At that rate, you are just digging a deeper hole every month.

So, to make a workable payment plan, you need to raise the amount of your payments.  Make sure that you are paying at least the minimum on all 15 bills in order to avoid late fees.  If you have anything left over, pay extra on one of the debts, preferrably on the one with the highest interest rate.  With 15 creditors and only $4,000 in total debt, your average debt is only $267 per creditor.  It shouldn't take long to start eliminating the smallest debts.

Good luck.