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consolidating credit card and lowering monthly payments..

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I owe about 30,000 to various credit cards. My credit rating is actually excellent--764. But I find myself with hospital bills, child care, mortgage, etc that I cannot keep up with. My credit card interest rates are as low as the companies will allow, yet I still pay out 650 per month to these companies. If I settle, how will that effect my credit rating? What is the best way to settle? Is settling this debt actually going to lower my monthly payments?

Settling will damage your credit. I'm not sure for how long though. Have you thought about consolidation? Give one of the counselors here a call & they can point you in the correct direction. I wish I could tell you more, but I'm not sure which of those can be put in a program. Someone else will be along soon with more info, but give the counselor a call-its free!!

Sub: #1 posted on Thu, 07/10/2008 - 20:10

lawn1016 lawn1016

(Posts: 676 | Credits: 70.59)

You can not settle a debt unless the debt is in default. Basically if you are being a good little customer and paying your bill on time at the rate they are sticking you with then they have no incentive to settle a debt for a lump sum. The only amount they would take is the full pay off amount and I doubt they would even lower your interest rate if you asked.

One option you have that won't hurt your credit is to consolidate your debt into one bigger loan. Usually this is done with collateral like a second mortgage. I advise against transfering unsecured debt to your home but you could try to get one credit card to accept all the others into their balance and just pay that one card.

This option will destroy your credit score. The only way you will get a credit card company to start considering settlement offers is to quit paying them for a while. After a few months they might accept a lower offer but generally they won't until the CC charges off the account. At that point you are left dealing with a collection agency which will generally settle over a period of time for a lesser amount than what was originally owed.

Sub: #2 posted on Thu, 07/10/2008 - 20:13

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