Not sure if this is the right forum, but figured this is where the financial savvy roam, so it would be a good spot. To make a long story short, I have a 21 year old younger sister that has gotten herself into debt. She has racked up over 10K in credit card debt and can't pay it off as she is in college and only works part time at the university. I have no idea how she got a line of credit over 10K, but anyways, my parents and I helped her out once already almost a year and a half ago and helped her pay off almost 3k in bills. Now she is getting multiple calls per day from collectors and she doesn't know what to do. My parents are refusing to help her out again, so that she can learn her lesson. I have offered to help out a little again, but don't have that kind of cash laying around and think she needs to try to work to get out of the problem on her own. My question to you all is what options does she have? I see these "credit help" numbers advertised on TV that supposedly settle your debt for you if you have over 10k of debt. Are these for real or just another scam to get your money? Any advise here would be appreciated. -B24
yes ,it sounds like she is a great candidate for credit counseling. This will stop the calls and get her on a plan to recovery. You have to have her buy in though and I'm not sure if she makes enough money to cover the minimum payments. I have a friend who works for one of these companies, I'll see if he has any recomendations.
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I think I can get her to buy in. I will just make a deal to help her out with the min payments, assuming they aren't enormous, if she allows me to view her credit report and take possession of all of her credit cards. I would like to think that if she is getting all of these calls she probably doesn't qualify for any further credit?? I think she would buy in anyways, she called me crying the other day because a collector called her and started yelling and cussing at her on the phone. I think it shook her up pretty good. I guess he told her that she needed to pay or she was going to go to jail. Can these people really pull stuff like this? I mean, I understand that she owes them money and they want to get paid, but there should be a line drawn somewhere, I would like to think. I guess the same number was calling her 8-10 times per day and she never answered. She finally got sick of it and that is the response she got from the guy. She says she gets between 15-25 calls every single day from multiple numbers. It sounds terrible to me. I would like to think that would be motivation enough to stop with the credit. I appreciate your response and please let me know what your friend has to say.
Thanks for your response. Is it smart to keep a balance on one card. I know she is obviously going to have a balance on multiple for quite sometime until this gets paid off, but I have heard that you need to keep a small balance on your credit card if you have bad credit that you are trying to repair. Also, do you need to use the card in order to repair your credit? If it goes unused for an extended period of time, does it hurt you?
If she is getting calls that means she is behind. Her rates are not at 19-26% and she gets charged a late fee and most likely over the limit fee every month. She needs to call a credit counseling agency asap, there should be no buy in or up front fee. Debt negotiation plans dont work as you have to come up with 50% of the debt and pay the company a fee. If she cant afford the monthly payment through credit card counseling have her file bankruptcy. Once she gets a house or a full time job they may not let her. 2 years from now she can get good basic financing and 7 years down the road it will be just a bad memory and hopefully lessons learned. Thats the problem with college, they dont teach you a damn thing about credit or financing or how money really works. Then they let all these credit card companies set up a booth giving out cards with a balance they know mom and dad will have to pay.
tell her to go get a job at the local strip club. $$$ to be had there. Plus if she's in college she can take out student loans...use that money to pay off credit card...she doesn't have to start paying the loans off til she is finished with school and will be at a low rate.
Too many Americans get themselves in trouble with overspending. Let her deal with the problem herself. He mess up credit will screw her up for at least 10 years of her life. If she doesn't give a shit about it while she was charging up the cards , why should you guys care.
School of hard knocks..
School of hard knocks..
So you are saying she would have to come up with $5K up front in order to settle a $10k debt, not including the fee? Ouch, this might be tough. I was thinking maybe they settled for standard payments over a shorter term of maybe a year or two. How will filing bankruptcy hurt her in the job market when she gets out of school?
She would have to come up with at least 5K. Debt negotiation is usually not less then 50% and paid in full up front. That still shows on her credit as "paid for less then full amount" for 7 years. The only way to setup standard payments is credit card counseling company such as http://www.careonecredit.com/ Due your research though, I just googled that one. If its not in collections they will bring the accounts current again, stop late/overlimit fees, and set her up with a payment plan. The payments are going to be close to what they were when she was current. Probably 2.5% of the debt so around $250 a month. By keeping the payment the same (trick to getting out of cc debt) she should be out in 3-5 years. ****It may show on her credit report that her accounts were closed by a consumer credit card counseling company*** Some banks dont like this. Bottom line, there is NO easy way out. CC companies have been bleeding us dry for years, they are made to keep you in debt forever IE
ayment holidays, lowering your payment, 0 due this month. If she has to make sure she wont need a new car for a few years and have her file. Depending what field she goes into it wont effect her getting a job. If she is a nurse they dont care. If she is dealing with financing they may ask.
ayment holidays, lowering your payment, 0 due this month. If she has to make sure she wont need a new car for a few years and have her file. Depending what field she goes into it wont effect her getting a job. If she is a nurse they dont care. If she is dealing with financing they may ask.
