Debt consolidation question (specifically paying off credit cards)?

Is she in default on any of them? This is a very interesting article on credit card companies accepting less than full value of cc balances: http://www.nytimes.com/2009/06/16/yo...20cards&st=cse

What is the hit to your credit score for consolidation?

Is he talking about those debt consolidation companies, or ust taking out one largre loan at a lower rate and payin off all the cards in one fell swoop?

That wouldnt have any credit score hit would it?

K

She may be able to get a bank loan from some of them, I believe wells fargo financial will help out with something like that. That should bring the rate down alot depending on her credit.

24% + fees and things, thats pretty terrible.

Why don't you just pay them off for her in exchange for principal and goodwill? She is your mother after all...

borrow from home equity? most are variable and benchmark rates are very low right now...

I'm no expert, but I don't know how you're going to find someone to shell out $23,000 in unsecured credit to someone with presumably bad credit at 6%.

You may be able to find some CC companies willing to take her on at teaser rates, or lower rates, and you should xfer all balances around to take advantage of the lowest rates. Bear in mind that every new card she gets, though, is another opportunity to spend, so keep an eye on her, and that it's also going to ding her credit to keep opening new accounts.

As others have mentioned, some banks may help out with this, but they're likely going to want some sort of collateral. Can she take out a home equity line?

Also, be careful with your math and don't take any shit from her. If she has $10K coming in it should be a $13,000 bill, not $23,000. Don't let her fudge you on any numbers. People with bad credit will fudge numbers to make it seem like they're doing better than they are... and so they can keep on purchasing. This has a lot in common with other addictive behaviors; I have seen it.

Settling for less than the total due is a possibility, and might be worth considering, but understand that it will have a major negative effect on her credit going forward. She will have a very tough time getting a home loan any time soon if she does this.

Good luck, and again, though it sounds like I'm being harsh, be firm with her. She may not be able to do this alone, and if you really want to help, you're going to have to check every account and balance every statement. The rigor will keep her from cheating on the program, and it will also help her realize where the money is being pissed away.

awesome, glad things are progressing, and i hope it works out for mom.

I hate to hear that CC companies are fucking people over. 24% + is absolutely absurd.

I have about $7k in debt on 4 cards ranging from 15.5% to 24%. I just consolidated at 10.5% with a signature loan at the credit union. I make my first payment next month. Just $162 a month (for 5 years assuming minimum payments). Credit unions all the way, man. Just gotta suck it up and live on H&M shirts and APC jeans for a few years.

I did the same thing as you. Unfortunately, credit card debt is nothing like student loan debt. Someone said they managed to consolidate to 10%, which is pretty damn impressive.

+1 to what Douglas said....if you care about her, keep on her and scrutinize all of her finances. Outside of rare exceptions, you don't get to 23K debt without a decent amount of fiscal irresponsibility.


I don't really see how it's fucking anyone over. You know what you sign up for when you get a credit card. If you're dumb enough to carry a balance, you deserve what you get.

People file for bankruptcy = credit card company doesn't get paid as it deserves to = moneys gotta come from somewhere = everyone else pays the price.

Bullshit, they were taking advantage of people who didnt know any better for years with those zero 0% cards.