AboutBill Bauer Expertise I can answer questions about debt and debt management. I can also answer questions related to collection agencies, abusive debt collection practices and how to defeat them using the federal court system.
Experience I have been helping people with debt related problems, mortgage forclosures, credit card debt and most other types of debt and collections problems for more than 20 years.
Organizations Jurisdictionary, J-accuse
Education/Credentials Paralegal and practical training and education My web sites have been on the internet for about 10 years and have been very instrumental in helping hundreds of people resolve their debt related problems which have ranged from simple solutions such as the sending of a creditwrench debt validation letter to more complex solutions such as filing lawsuits against debt collectors in federal court. Our students have been very successful indeed. One student has filed more than 40 federal lawsuits and lost only one. Another student has filed multiple suits and has never lost a single one. We have two types of courses available for our students. The first and most basic teaches how to gather evidence of wrong doing by debt collectors which can be used against them in court if need be which it usually isn't. If you would like to become a creditwrench student all you have to do is call me at 405-616-7901 and start your learning process with our series of powerful anti-collection letters. You can also visit our web site at http://www.creditwrench.com and you can visit our message board at http://consumers.creditwrench.com and you can also join in our regular Friday night conference calls and discuss your problems with our students.
Question I recently saw Suzie Orman on a talk show where she said with today's recession situation, CASH IS KING! If you do not have 8 mos. worth of savings and you owe credit card debt, it's better to pay the min on the credit cards and keep the cash in your acct verses paying off the card. We have a significant amount of credit card debt which we will be able to pay off in a week because we have sold a piece of property. Our plan was always to take this money and pay off the debt. However, we have no savings. So my question is, is it better to put the money into a savings account and NOT pay off the credit card debt? Or do we pay off a portion of the debt and put a portion into savings. Suzie mentioned that what the credit card companies are doing to folks who pay off their debt is closing down their accounts and not allowing them to reopen them. Our fear is that if we pay off the credit card debt and the credit card companies close our accounts, with having no savings, we'll have no safety net (or credit cards) to fall back on if needed. What are your recomendations, we want to do the right thing with the money we'll be getting shortly.
Answer It is a tough call. I do agree with Orman on her point that cash is king and you do need a cash cushion but at what price? With credit card companies charging up to 30% or more interest these days paying off just the minimums can easily end up eating up all your savings in a while and you won't have paid the debt down much if at all. I'd say you should pay the cards down about 10% of their credit limits then use the cards every couple of months and keep them paid up promptly. Figure out when the statements are going to arrive each month and pay off as soon as the statements arrive each month. Don't wait for the due date to pay off. Pay as soon as the statements arrive to avoid interest charges or other fees.
