How To Budget Blog

I have a lot of school loans from my two children. I keep getting letters to consolidate them. Some one was telling my husband to take out a home equity loan to pay them off as then we could write off the interest on the home equity loan. Any opinions on that? Any suggestions about consolidating them with the Sallie Mae company where they were taken out? I need to do something before the interest rate goes up again. I am just not sure what all the options are or which way to go.

Thanks, Kathi

I think you might be forgetting about certain debt settlement programs. The way debt settlement programs work is that they take over handling all communication with your creditors for you, then they set up a saving’s account for you to put a pre-determined amount of money into each month to go toward paying a “settled” amount to your creditors after a certain time period, say 2 years. What happens in this time is your accounts to get charged off unless for some reason the creditor is ruthless and never charges the account off and just continues to try to collect, which is unlikely. But, if you go through a legitimate debt settlement agency and you get it in writing before you sign the contract that
once your debts are settled with the creditors, that these charge offs will be stricken from your credit report, it is possible to do it that way as well. Some creditors will not be willing to do this but if you know your stuff and “harass” them as much as they harassed you, then you might get your way. I’ve found that the best way to deal with creditors is to call them as much if not more than they call you and call the same person over and over and over again. Get a supervisor and talk to them. Record every call. Speak professionally and don’t let them upset you. Keep calm and collected and stay on top of your emotions. If you can do this consistently for a pretty long time, you can often wear a creditor down enough that they will eventually do for you what they were putting so much effort into getting you to do originally. This is only possible after you’ve settled your debts and paid them off but you must get a guarantee in writing from either the debt settlement agency (not many of them will take this part of the deal into their own hands so it’s most likely up to you, but they will communicate this for you and make it a condition of the settlement, say be willing to settle for slightly more money on your behalf if they are willing to guarantee in writing that they will take the charge off and late payments and so forth off of your credit report and if they do not, then they will not receive as much as they want). This is all a big process but in the end it’s worth it if you’ve fallen on hard times and can’t pay your credit cards and your accounts do get charged off. I’m dealing with this right now and I’ve been doing quite a bit of research enough to learn that if you keep your cool when dealing
with a creditor, you can almost always frustrate them into doing what you want in order to get what they want, or if you don’t frustrate them, by simply being courteous and professional to them, they’ll be more willing to give you what you want since you aren’t acting like every other deadbeat piece of trash they have to talk to every other minute who doesn’t pay their bills. Not everyone who doesn’t pay their bills is a deadbeat. I’m not, but I’m a college student who hasn’t been able to work because of a car wreck and while I’m seeking settlement my cards are going into charge off status which I really can do nothing about except tell this to the creditors every time they call… most don’t listen because they think it’s an excuse. The truth is, that I intend to live a cash life after I’m able to work again, after having back surgery, and whether or not I have to spend months or every a couple of years slowly fighting the creditor battle, I’ll do it but in the meantime, I won’t need to worry about credit because I intend to work hard enough to pay for most of what I need with cash. That’s the only best way to do it anyway. Granted, credit is a good thing if you’ve got the cash to back it up, but lets face it, if you had the cash in the first place you wouldn’t need the credit to begin with and you wouldn’t have gotten into this mess. I think the only true way to get out of this mess is to let a debt settlement or credit counseling bureau handle the harrassment and you just change your budget and your lifestyle in order to make yourself more money and spend less. It won’t be easy to let go of some of the comodities you might have enjoyed while living on credit, but in my opinion, the biggest commodity of living a cash life is being stress free. I dunno. I’m a stupid poor college student so what do I know anyway right?

Hi,

You can contact the credit report agency to tell them something isn’t right. The agency will contact the creditor to attempt to get it corrected. Sometimes it gets corrected right away. As for other things they will stay on your report for seven years. Things like bankruptcy can stay for ten years.

Vi

Сrownroyal3cubes wrote:

I just got a copy of my credit report. I have four charge offs accounts
listed. How long do charge offs account stay on your credit report?
What is the best way of getting them taking off? I have heard about
calling the company and asking for a settlement, and if so how would
that effect my credit rating.

Two charge offs are duplicate accounts that have beed paid. Should these accounts be on my CR even though it been paid?

Thanks in advance for any advice.

I just got a copy of my credit report. I have four charge offs accounts listed. How long do charge offs account stay on your credit report? What is the best way of getting them taking off? I have heard about calling the company and asking for a settlement, and if so how would that effect my credit rating.
Two charge offs are duplicate accounts that have beed paid. Should these accounts be on my CR even though it been paid?

Thanks in advance for any advice.

I have never use MVelopes so I cannot comment on it, but I have used Quicken for many years. I have put logon & PIN/Passwords for all of my accounts and when I click On-Line Update it goes out and updates my accounts from my primary bank, my 401k with Fidelity, my Money Market with USAA and American Express Credit Card. It does not update my wife’s checking, my secondary checking or any of my other CCs. That is because those banks do not grant Quicken that kind of access. So, when I want to update those, I open the account in Quicken and click the update link which takes me to the bank website and I have to do those manually.

I have somewhat complicated set-ups with Quicken and have a some trouble, but overall I still recommend it. My only real
recommendation, is learn how to manually memorize transactions and turn off the automatic memorization.

Good Luck,
Larry

hi everyone,

how will i start, i have 8 credit cards,my present salary is not enough for the minimum amount due of my credit card debts. Will i go for debt management program, the APR here in our country is very high 42%. Any advice on how to egotiate with credit card companies, do i have to be in default to negotiate with them. I am trying very hard to pay my minimum amount due by resorting to borrowings. I am getting tired of this race.

thanks

I have used it for years. I also have used Microsoft money, and I find Quicken much better.There are certain things I want to do that quicken allows me to customize and money does not. I also find it much easier to navigate. I can ustomize it to see only the things I use and have all of them just one click away. I am not a fan of how both Quicken and money do budgeting. I created my own excel spreadsheet that has my month by month budget all on one page.Both are good but I feel Quicken is much easier.

Steve

Hi,

I was studying for a class and must have been thinking about your situation in the back of my mind. Lately I’ve been trying to consider each purchase in the terms of how many hours I have to work to earn the money. Like my car bought a month ago is equal to what I earned by working 341 hours. Compare your husband’s purchases in terms of how many hours he works to pay for them.

For example, say he earns $10 per hour. He buys tools worth $1,500. He must work 150 hours or 3.75 weeks (40 hour work week) to pay for them. Or say the rent is $1,000 a month. That’s 100 hours or 2.5 weeks.

Don’t know if this helps you but it’s been helping me when I want to buy things. There’s a book I want to buy that is equal to 2.5 hours of my pay. It’s the only thing keeping me from buying that book; thinking how long I’d have to work to earn the money to pay for it.

When I bought my laptop last year I made sure Microsoft Money was on it for budgeting. Well I wasn’t able to update it last week through my bank so I called them and they said they only support Quicken now. So I went out and bought Quicken. I was only able to play around with it yesterday so I’m not sure how I like it yet. How does anyone here feel about it? I really wanted to try Mvelopes but since my DH had never heard of them he felt we should go with what our bank recommends.

Please tell me I made the right choice?

I’m feeling pretty cynical today, so keep in mind that’s where this response is coming from.

But first, the positive stuff: give yourself a pat on the back for making the first step and communicating! That’s major progress! Second, I’m not so sure it’s a bad idea to scare him with fearful numbers and show him he spent twice what was budgeted. If you do this in a kind and loving way, it might get through. I’ve learned that with some people (namely, my dear spouse) the nice, subtle messages just don’t work. Saying very bluntly “I’m worried about our xpenses from last month–we spent double what we made, and I’ve got a real problem with that” might actually work. Again, I really really empathize with you on this. We are going through similar struggles and it’s very frustrating. I’ll reiterate my plea to the group: if anyone knows the magic formula to getting one’s spouse on the same financial page, please tell us!