Living on a Budget, Saving Money/Debt reduction-cards

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Question
Due to an ill wife (practically bedfast), I have very limited hours of work and a very limited income, and the wife is on Social Security SSI disability.  Due to expenses, I have total debt from a few credit cards of $43,000.  Some interest rates are such that the minimum payment (all I can currently pay) is more toward interest than the debt.  I pay about $300 in interest a month.  The debt figure slowly increases rather than decrease.  I have had ads, etc. from a number of companies offering lower interest rates, and some offering debt "forgiveness".  I am concerned about fraud or loss of credit rating from these (I have a good rating, except for only paying minimum amounts.  I have missed NO payments.)  What would you recommend for better debt reduction, lower interest, and possible debt "forgiveness"?  Our total monthly income runs about $1,300 for 2 adults plus a nearby daughter that occasionally needs some help.  Thanks!

Answer
Its tough when life happens!  I will start at the ads you have heard about.  Any loan that offers lower interest rates will lower your monthly payments but keep you in debt longer. They like when you do this because you wind up paying them more by the time you pay the debt off.  It cost you more and keeps you in debt, and at risk longer.  Debt forgiveness will usually require you pay them a fee to handle your debts.  You pay them a fee then send them monthly payments. While you think you are paying debt off they are actually not paying you creditors. When you get behind on your debt, while ruining your credit, they will settle with the money you have been paying them monthly.  You can stop paying them your self and and wreck your credit without paying them for that pleasure.   

The options you have is to make a list of all the debts you have, smallest to largest.  Do what ever you can to earn as much money as you can first. You maybe could sell some things on the internet, do any extra work you can fit in your schedule, or sale anything that you really dont need right now.  Do what you can to increase your income.  Make a budget, prioritize it. Pay your necessities first, food, clothing, shelter, utilities etc. The most important to the least.  The least being credit card debts. Your most important debts are mortgage, and car if you have them.  If you dont have enough some months the creditors dont get paid.  You must eat and have utilities.  Don't worry about garnishment unless they take you to court and win. If they do you have options. Get a lawyer if this ever happens. But you are a long way from that now (this was worst case scenario).  With any money left after all the necessities are paid, attack the smallest debt with all the extra money you can and pay the minimums on the rest.  If you do get behind on them contact them and let them know how and why you are behind and what you are doing to dig out.  Just keep contact with them. You can call the creditors and tell them your situation and request they lower your interest rates. If you are the wheel that squeaks loud enough the may help you out.  Since your credit is good you may can switch to lower interest rate cards.  If you do get a consolidation loan attack it with all you have. These are just a few suggestions, since I dont know you total financial situation.  Let me know if you you have anymore questions.  Keep plugging away at it and get that debt out of your life.  

Living on a Budget, Saving Money

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Tim West

Expertise

Budgeting, credit, collections, basic insurance and investing. Small business budgeting basic will and estate planning.

Experience

Financial coach since 2009. Help coach people in personal and small business financces.

Education/Credentials
Head of financial ministries at Grace Fellowship of Augusta,Dave Ramsey Certified financial counselor and 20 years of doing it my self.

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