PostHeaderIcon What should I do about unsecured debt?

I have about 23,000 in unsecured credit card debt. I recently lost my job and had to take one making a lot less per month. I went a debt consolidation program that got my payment down to about 700.00 per month. The problem is i am only bringing home net about 1200.00. I then have a mortage utilities and insurance etc so i am running in the hole. Is debt settlememt a good alternative. I do not want bankruptcy . I know settlement will hurt my credit score but at this point I need a way out. I have heard that settlement companies make you hold off on payments and the credit card companies will keep hounding you? Is this true? Does anybody have a suggestion to my dilema

3 Responses to “What should I do about unsecured debt?”

  • Judy says:

    Spend the money on a good book such as
    Debt and Credit Repair for Dummies – very good book.
    They’ll have a chapter on how these debt settlement companies work.

    If you choose to do this yourself that book will be worth its weight in gold.
    They will teach you how to negotiate, settle, or reduce payments on your own.

    And yes, the settlement companies hold off on paying your bills to make the creditors more nervous.
    Meanwhile you are charged more late fees and interest.
    Some creditors settle – others don’t and you can end up in court anyway.

    Also you can go to a non – profit governement service to help you get out of debt
    There is no charge for this non profit organization.
    They will put you on a Debt Management Program – the reviews are excellent.
    If you choose this option, go to the site and call the 800 number and make an appointment with a local office – don’t do this by email

  • Debtgurus says:

    It really depends on how much you can afford. Debt consolidation is more for people that can still afford their payments. Debt Settlement is more for people that are behind on their payments. Both programs will have a negative effect on your credit score so the best thing to do is just find a program that can get you out of debt as fast as possible so you can start rebuilding your credit after wards.

  • YahooAnswersProfile says:

    You need to call each creditor and explain your situation. You need to tell them that you can not afford to pay this amount every month. you don’t have money to do so. you tell them that you want to continue paying towards this debt but only way you can do this is by paying $ X every month. you tell them that either they reduce your payment or you wont start paying and see if they are ready to lower your monthly payment. Also try to have garage sale and sale everything you can. Try looking for better paying and/or another job.

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