how to solve Non Profit Debt

Edwards Finance > Debt Help

Q. have unfortunately gotten into a credit situation where I have good credit but have two credit cards which are currently killing me and it won't be long before I have quite bad credit. Namely, a Visa card with ridiculous interest rates (because I apparently was late on two payments the percentage rate went from 11.9% to 25%)- Trying to dispute it did nothing for me. I am, of course concerned about my credit as i've spent years making it good. I already have a large outstanding (maxed out) card from my credit union so I can't get another loan from them to pay off the high percentage card until that is paid off- of which I have no $$$- so its a big catch-22. I know there are a LOT of "non-profit" credit consolidation and help services out there but I'm thinking a lot of them are a scam and will cost me a ton of upfront money and perhaps do little/nothing for me. Are there any actual reputable ones anyone can recommend? Government sponsored perhaps? If they all cost money what should they cost? Whats the rate for a legitimate non-profit these days to consolidate or help me out of my debt?

A. _You don't say how much debt you have, esp how much debt vs income. If you just have 2 credit cards, and you can make more than the monthly payment, you are probably better off working with the credit card companies yourself. Contact them, try to work out a payment arrangement at a lower interest rate, Most of them are amenable to offering a lower interest rate if you can offer a fixed payment. Be civil. However if there are several credit cards and a large amount of money and you are having a hard time making the minimum payments, a consumer credit service may be of assistance. They will meet with you, go over your bills and income, set up a budget and work with your creditors to get a lower interest rate (generally 9.9%), If you agree to work with them they will set up an autodraft from your checking account each mponth for x amount and distribute the $ to the various creditors. This really only works if ALL of the creditors agree to go along with the proposal from the consumer credit service, There are several reputable non profit services. Consumer Credit Counseling Services is probably the best known but i am sure there are quite a few others. DO NOT EVER (caps intended) get involved with a debt settlement company or any service which asks you for money up front. There are a lot of people here who will tell you to just go ahead and file bankruptcy. Think long and hard before you take that route, bankruptcy affects so much more than just you credit, for a long time. _What these companies do is gather up your bills, and pay them for you. You write them one monthly check. For this service, you pay a big fee up front (often equal to 1 months payment), and you pay a monthly donation fee for the service. They make big money from this. If you can write checks and lick stamps, then you have no need for this kind of service. You especially don't need to pay $500 to get started--you cannot afford $500 right now. There is an easy way out using a mathematical trick. You spend less than what you earn, and use the difference to pay off the debt. If the amount between what you earn and spend is negative, then you are going behind each month, and you need to move back home with your parents--you cannot afford you current life. If the amount is small but positive, then you have two options to make it bigger--earn more, or spend less, or both. You can always spend less, and earning more is often not that big of a trick. There are always pizzas to deliver, newspapers to toss, and courier package routes to drive after you get done with your regular job. _How about getting a small part time job for the next few months? A lot of places will be hiring seasonal people for the holidays now (or soon), and even if you worked 15-20 hours in the evenings or on a weekend at something just above minimum wage, you could throw several hundred extra bucks against the debt each month

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