Strategy needed

debt strategyI’m trying to get out of debt, and wonder, is it a better strategy to pay off the smallest debt first while paying a minimum to other debts, pay off the highest interest rate debt first, get some kind of loan and consolidate the debts, or just sort of pay something to all debts at once?

I was doing “pay off the smallest debt first”, managed to pay off one debt, then got hit with some vet bills and car repair bills all at once and had to put them on a credit card, so now have just as many debts, so I’m feeling pretty discouraged. Actually applied for a consolidation loan from my bank and got turned down. So now what? just keep plugging

we were turned down for a consolidation loan as well. it was very frustrating. do you have a family member that might be willing to loan you some money as a personal consolidation loan? i know one thing that has been helpful for me is the thought that when something goes wrong i am personally ABLE to cover it, even if it means putting it on a credit card, vs when i first started, everything was maxed out and i would have had to call someone to bail me out.

strategy depends on what works best for you. If you really want to save money in the long run then highest interest rate is best. However if you need to see progress then pay off some of the smaller ones first. There is a great calculator at called the paydown wizard that is what I use so I can see where my money is really going.

That is why, for those who subscribe to the Dave Ramsey (there are others) method, Step 1 is $500 – $1,000 in the bank as an emergency fund. What you described sounds like emergencies. What does not constitute an emergency is annual bills, replacing worn out tires, etc. Replacing a blown good tire is an emergency. You see, you should have planned on replacing worn out tires by saving for them.

Step 2, is what you were doing, pay of smallest to largest. We are still on Step 2 and have paid off 3 debts with 7 more to go. We were hit with several emergencies this month which brought our emergency fund down to about $100. I will now make minimum on everything until I get that back to $1,000. Then I will go back to Step 2.

Good Luck and do not despair! There are lots of people in the same predicament, hence this great group!

There is at least one site where you can set up a loan through an individual. It is set up to charge interest, but you could work that out if they would charge less than the (I think) minimum 6%. Do a search for for personal loan management…

I believe it reports your payments to help your credit score. Also that is another thing to consider… are you worried about your score, or are you worried about getting the most for you money (or losing the least rather) in the cards vs. other loans.

In that last few years my credit score has went up at over 100 points. Pay your bills on time always. If it’s going to be reported don’t be late at all. Apparently, according to one card I have that gives me my score free every month, somehow it also knows if you pay over the minimum (anyone know for certain on that) so always set it up to pay an extra $1.or so anyway. The mix does of types of credit does help your score, BUT if you are not especially worried about your score but more in bringing down the debt, then you would want to pay of the higher interest first.

Collections question when a lawyer gets involved

I have an account with citibank that’s been delinquent since December 2014, about 2-3 weeks ago it was sent to a collection agency. Today I got a letter from a lawyers office 2 hours from here(so within the state I live) stating they are trying to collect a debt for citibank, totally not the collection agency that just notified me a couple weeks ago that they had the account. I don’t think I’m getting sued, but I am confused.

The letter is written just like the ones I have received from the collection agencies, pretty much word for word, basically just stating the debt, saying I have 30 days to dispute it, that kind of thing. Nothing about a judgement or that they are sueing or anything. Can anyone explain this more? Is this the first step in getting sued because it’s from a lawyer or is it just part of a collection agency that is using their legal letter head from their legal department to scare me. Any insight would be great.

I apologize in advance if you don’t hear back from me right away when you respond. I’m headed to the hospital in the early morning to give birth to my 2nd son, so I won’t be back home until the coming weekend. I just didn’t want to hold off on asking about this until I got back home. So, anyhow, thanks in advance if you are able to help me out on this.

I’ve gotten them many times, they are trying to scare you into thinking you will be sued. They may still sue, but usually it’s a scare tactic. Still, if you wish, you may get a cash advance loan online to pay for lawyer services. This may help.

Funny this should just come up now. I just got THREE of those letters. I’m at a point of not caring anymore. I’ve done my suffering etc. I have just sat down and wrote letters to all three saying the debts are not valid. They are going in the mail by registered mail and then the ball is in their court.

Advise please!

envelope systemI am a single woman who is quite deeply in debt and does not wish to use credit cards anymore. i am also disabled due to stroke. so i guess the more simple the better. my income is 1400 and i am paying 10.000 dollars in debt. what are the best actions to take, and please can you tell me about the envelope system and its advantages.

Have you cut up your credit cards? Can you cut up your credit cards? Sometimes we use credit cards for things we really need. Do you use them to cover the gaps most of the time with an occasional self indulgence? If that is true, perhaps you need to look at your biggest expenses first.

Can you conceive of moving into a home that costs less? What other expenses do you have that are negotiable. Medicines and food are not so negotiable, you have to take care of yourself.

You might have to make a few changes and get yourself on a budget. Budgets are hard to keep and maintain and you might consider automating your financial management so when you’re feeling fiscally weak, you can’t easily make a damaging purchase.

thanks for the advice, i will cut up my credit cards today, i have just been scared. you know what i mean?

Freedom Debt Relief opinions needed

has anyone used a company such as “Freedom Debt Relief” where they negotiate with the credit card company’s to get you out of debt?

I have used a consolidation company before, CCBC I think. They were great and helped a lot a few years ago.

I would definitely like to consolidate the debt somehow. For now I have figure out a pretty good budget and I’m proud and a bit relieved to see that we have money to put where we need it most.

My husband is in the Navy and will be getting out in about a year. We are not sure how much he will be makingin the civilian world, so I’m sure we’ll have to adjust. Obviously then, the less debt, the better.

We hired a company called Elite Financial. Here we are 1-1/2 years later and only one small debt has been negotiated. Our original balance was $2200, which climbed to $3300 with all the interest and fees tacked on, and we settled for $2600!!! Plus we had to pay them $153.00 on top of that.

We have just hired a financial planner we found on Dave Ramsey’s website and we will pull out all the funds we have in the account they set up and use it for our snowball.

I’ll keep everyone posted on our progress with the financial planner using DR strategy.

I’m not sure I understand what you mean by how? I was able to allot money into all the important catagories and even for X-mas shopping so I’m not hit by that all at once. I should have enough for bills, extra to pay on credit cards, savings, etc. etc. Before I just lumped all the “extra” money together. For example, after paying bills I usually had about $600 leftover each check. That was money for gas, groceries, etc. Well it probably went towards etc. more than anything, and then the money was gone. We didn’t feel like money was tight, but never felt like we had any extra to put in savings. I was amazed to see that I could actually put money aside to save and still be able to buy gas and groceries and breathe.

New ere and looking for budgeting advice

budgetingHi All, My name is Kate and i am 29 years old, married to a great guy named Alex for 7 years (Jan. 15, 2000) and i want to learn how to make a budget. So i hope all of you can help me. I have add, adhd, OCD, and bipolar so saving money for me is hard so i thought i would try to join a blog for help. SO i am open to any suggestions. Thanks in advance.

i found this web site last night when i was looking for a “simple budget” using google. i was looking for a simple budgeting form or spread sheets.

im checking out “my budget planner” under the “budgeting worksheets” tab at the top. it’s 19 bucs but it looks promising. it looks like it has things that i want for doing my budgeting.

if all else fails, use google to find all kids of info about budgeting, including spreadsheets. it has been my friend lately for finding all kinds of useful information on budgeting, including spreadsheets.

i hate to say this but, microsoft is one place that has downloadable budgeting spreadsheets.

there are tons of spreadsheets on the internet that you can download. be careful, some could contain viruses and other nasty things.

Does any know a good website, not for sheets necessarily although that would be nice, but how decide how much should be budgeted for everything. How much should get to go toward certain things or no more than etc..? Obviously, some things will be worth more to certain people or have to be more (medical bills) or necessary private schooling etc… but they must have some basic ideas. I did find one from crown ministries but wanted to check more also.

One of the hardest things for me and my wife was to maintain the discipline part of a good budget. Some months we would both be working together and other months all it took was one of us to fall short. We created our budget then the next step was to have an automatic transfer to a separate checking account which was set up with bill pay to automatically cover each of the bills. The left over money from each paycheck was ours to spend and if we over spent one month, nothing bad really happened, all the important stuff was taking place somewhere else. I originally called it the Idiots budget. We have been able to save money while my wife stays at home with our kids.

I can relate to this. My husband makes the money and I manage it. Most of the time it works great. However, my husband is in the Navy and away from us 90% of the time. So since he doesn’t keep track and know how much money we have, sometimes he’ll spend it and then we come up short. Things have been better though when we can communicate and he asks before he uses the debit card. He has an “allowance” that he can withdraw and use each payday. (as cash). He is planning on getting out of the Navy soon and it will be a lot easier when we are actually “together”.

Try (Money Magazine) (Market Watch) (Suze Orman’s website)

I think all three state guidelines. So does Jean Chatzky (she is on the Today Show a lot) and Melanie Hobson (she is on Good Morning America all the time).

Re2: I’m in deep trouble! Please advise ASAP!


I am from South Africa and here, the debt collectors are not allowed to access any funds from your account without your knowledge and consent. I am not sure how it works in your country.

I suggest that you check with your bank with regards to their banking policies especially when it comes to who is allowed access to your account and funds. Here, only your bank and the Internal Revenue Service ( in the US) are allowed access and even then they have to ask permission before taking any funds from the account.

With regards to your debt collector requesting a money order for $9000-00 so that you can get your own money back, this is definately a scam. If you give them the money order, you will never hear from them again and will be $17200-00 out of pocket.

As an ex-police detective, I have dealt with a lot of fraud matters and this sounds like a scam that has been in SA for many years.

I suggest that you query whether the debt collecter, be it an individual or ‘organisation’ is legit or not. This you can do by contacting your Registrar of Companies/Businesses (do not know what it is known by in your country) and querying their practise number or licence number etc. As far as I know, all debt collectors need to be licenced to collect debt or they cannot practise.

If you can find no information what so ever on the debt collector, you are then dealing with a fraudster and I suggest reporting this to your local police department for further investigation.

Like I said above, I do not know how things work in your country and I hope this helps.

If you wish, you can send me more information regarding the matter and I can do a bit of research from this side which might help you more.

Thanks for your advice. My lawyer filed an exemption to the County Sheriff department and there will be a court hearing in the next couple of weeks if they object. Hope my lawyer gets the money back for me at court. The debt collector agency is legitimate. They filed a court order in an attempt to collect debt by suing me and I never showed up then the default judgement was filed against me and this is how it all happened. I guess this is legal in the US if you don’t show up at court. But still… I don’t think this is morally right.

Anyway, I’ll let you know if I get it all back.

Re: I’m in deep trouble! Please advise ASAP!

Please wait for advice from people more knowledgeable in the list, but since you already doubt the sincerity of the debt collector, I would advice you not to trust the scheme they propose that you send them a money order for $9,000, for them to return $8,200 to your bank. It sounds like they will attempt to keep $16,000 rather than settle for the lower amount.

We have been dealing with a debt consolidation program for several years. A couple of years ago Discover took us to court. Since then, they (even though they know that we are working with a debt consolidation company who is trying to work with them) have garnished our checking account several times taking everything out of it each time.

We are only notified of the garnishment after the fact through a letter from the sherrifs dept which usually arrives 2-3 days after the garnishment(the garnishment releases after 30 days and the bank unfreezes the account).

We have limited income and because they garnished our account, there were several times that I was unable to have the money needed for my required heart medications.

We have resorted to only keeping 50 or less in the checking account now, and paying cash or getting money orders for everything just to keep from losing everything again.

If you open another account at a different bank, they will eventually find you there too but probably not for 30-90 days. All I can tell you is what we have done and it’s not easy. We have done away with all our credit cards though, and it feels good to think that hopefully in a few more years we will be debt free.

Thanks for your advice. I went to see a bankruptcy lawyer yesterday (Saturday) and he said he can file an exemption in the next few days since it has not been 10 days yet and try to get the $8200 back for $500 service fee only. The sheriff department or the debt collector will most likely object but the lawyer said we could fight this in the court with a judge if they object. There is a good chance of getting it back because I did not incur the debt. My brother did while I was away for three years. Plus, $5000 out of the $8200 was a tuition check for my wife from the church. The lawyer also said he will make a few calls to Resurgence Financial debt collector and settle the account for me at no additional cost. Think this is a pretty good $500 deal.
I’ll let you know how this goes…

I’m in deep trouble! Please advise ASAP!

Yesterday, the debt collector took all my money ($8200) from my checking and savings accounts and left me a $0 balance. It was an old chase credit card debt that was charged off about three years ago.

They said they filed a court order and processed the case with the county sheriff’s department to take all the money out. I never received any notice because I was out of the country for almost 3 years. My brother spent the card and never paid it back. I knew there was a charged off account but I never thought something like this would happen. I waited because my brother said he would take care of it through a debt consolidation program. Next day, I called up the debt collector (Resurgence Financial) and he said the money that they took will be frozen for a week or something and asked me to come up with another lump sum ASAP so the account can be settled. The original balance on the Chase card was $10500 and now it’s $16000 with interest. I said I might be able to settle it for $9000 so I could pay $800 more to settle it but he said that’s not how it works.

He said to call him back when I have the money order ready for $9000.

He said if I send a money order for $9000 within a week then he can release the $8200 back into my bank accounts. Is he telling the truth here? What if he takes my $9000 money order and keeps the $8200 he took from my bank accounts? Will he really release the $8200 back into my account? What should I do? Can I still settle for less? What if I do nothing? Will they get the $8200 and try to get more from me? How can I negotiate better with him? Can some expert out there advise me? I also told him that I was not on any company’s payroll or have a stable income and my wife is 3 months pregnant. All the money they took was the maximum amount that I could borrow from friends and relatives before I came back. Please help. I don’t want to be used in a bad way if someone out there can give me a good advise. Thank you.

First, check with your bank to see if court papers were properly filed, if not, close the account immediately and never give that info to debt collector. Actually, close all accounts at that bank and move to a new one.

Second, do not count on ever seeing any of the $8,200 again.

Third, and this is unpleasant, if your brother used your card without your permission, he is guilty of fraud and you must file a police report, then turn it over to Chase’s Fraud division. You cannot be held liable for fraudulent purchases. Will it cause problems with your brother, probably, but he stole your identity abused your good will.

Fourth, tell the debt collection company you will take no action, make no promises, do nothing until you have a written agreement from them. Only when they put it in writing will you discuss the account.

This is your chance to make a deal. Use only money orders to keep the collection company from knowing where you bank and make no payments until you have a written agreement you can live with.

Would that be like a cash out refinance?

Would that be like a cash out refinance?

In the long run though, wouldn’t that extend my credit card and car debt longer than it would be worth? For example, I figure we could pay off the credit cards and car in about 5-10 years with the payments we’re making now. But if I roll them all in with the mortgage, then that would extend the term to 30 years, right? Wouldn’t I end up paying a lot more in the long run than neccessary?

Is that still risky though? With having it tied to the house?

Just curious.. I’m definitely open to ideas.

I’m pretty confident that if I were to do the home equity loan I could get it all paid off in 5-10 years.

The bathroom is the first thing I’d want to finish down there. We actually already even have a tub. The basement was already framed when we bought the house and the owners even left paint, doors, vents, outlets, and a few other supplies. I’d imagine if we finished the whole basement, we would recover most costs. As our house is now, we have 3 bedrooms, 2 full baths, a living room, den and kitchen. Finishing the basement would give us 2 more bedrooms, 1 more full bath, a family room, a rec room and a storage room. (1500 sq feet). My uncle doesn’t mind living in the basement as is, and he doesn’t pay rent at the moment. It would just be “nice”. It would be nice for us to enjoy it as well.

So what if since this is through my credit union, I have them set up an automatic payment plan and allot it for the $345? Or I believe I can allot that amount to go to the loan through my husband’s pay.

yes it would. it should reduce your payments down quite a bit, but you need to run all the figures. that might be a good idea as well.

Just some things to consider. . .

If you are not actually selling the house, it is spending money though.

Which is fine, you can’t take it with you, but obviously we all want to be careful not get ourselves into trouble (again for some of us.!) and use money the best way possible.

Are you in debt other than your house? If so, should you consider paying those off or down first, before getting into further debt?

Also keep in mind, while things like the bathroom structure itself will always be valuable, the decor may not be. Even very nice decor could go out of date, so consider that also in how you remodel if you do.

Also, don’t know what is going with the relative, but should he be paying some sort of rent? Maybe he shouldn’t but if he really should, don’t be afraid to say you need to arrange something.

Yes that is very true.

Yes, we have other debt. We have 2 car payments and 4 credit cards to pay off.

At the moment the relative is not working. He works off and on temporarily and he helps pay the bills. When he is working again full-time there will be a rent arrangement.