debt consolidation loans

I am wondering if anyone has advice about shopping for a debt consolidation loan? For example, they always ask about income, what if your income is tax free such as disability? Feel free to PM or to reply normally.

I can't find the one I used. It was over 10 years ago and I don't remember their name. It was non-profit. I'd suggest only non-profit ones. The reason they want to know your income is so that they can come up with a comfortable monthly payment. They will ask you a lot of personal questions and you'll have to be open with them.

Also, you can work out deals with some creditors directly and even renegotiate interest rates. I t can't hurt to call and ask.

BTW, these are not "loans". You don't get a check. You never get any money. You sign an agreement with the agency that they will pay your debts off (immediately), close these accounts and you will pay them back a fixed monthly amount for a specified amount of time. That's why non-profits are better. Mine charged me $10 month for their service.

EDIT: I found old paperwork. They're called SafeGuard

https://www.safeguardcredit.org/

Although is has been 10 years since I used them so I'm not sure if anything changed about them. Although, they're still non-profit.

I would first see if I could come up with my own plan:

https://money.usnews.com/money/perso...o-pay-off-debt

I tried myself and failed. Not enough discipline, I guess. Doing debt consolidation worked for me. A single, fixed payment every month and all accounts closed so there was no way I temptation to spend money.

Part of the agreement with the agency was that I will not open any more credit cards.

You do have the option of simply defaulting on your debt. It's not illegal to do that, and you won't get put in jail for doing that. After a certain number of years (which varies from state to state) the statute of limitations on the right of your creditors to collect runs out. At that point, they can't even sue you for the money.

This is an option that I think low income individuals ought to really consider. Doing this will get you a low credit rating, but you might have a low credit rating already, anyway. Being able to keep your income for the necessities of life is more important than trying to save your credit rating, which may be unsavable.

If your only income is from SSDI, issuers of consumer credit can't sue you to make you pay.

They can sue you if you owe them a lot of money before the statute of limitations kicks in. They sell your debts to a collection agency and they often sue if it's worth the money.

Although, if you get sued and prove hardship the judge may rule in your favor.

No, Zigy, how much you owe has nothing to do with anything. Creditors who are owed a lot of money have no more rights than creditors who you only owe small debts to. Your check from SSDI or SSI is "judgement proof," as far as consumer debt goes. Read the following article: https://www.disabilitysecrets.com/page1-18.html

Yes, creditors will likely sell your debts to collection agencies. They'll bother you a lot. But they aren't going to pay lawyers to sue you for money that no judge will give them.

Part of why debt collectors call and bother people is because they realize that many people don't know their rights and get unnecessarily scared. Never be scared when a debt collector calls. And know that it is not illegal to hang up the phone on a debt collector.

I did stop paying most of my credit cards because my only income is Ssdi. This however did not provide relief from the guilt I have about it. I have to live with the guilt for as long as my state allows. Credit scores are important with getting employment and new housing. I wish I had dealt with the debts diffferently

Few years back, I stuck on big debt. But gradually, I pay off my all debt by searching some pay off debt tips. Now, I found veri helpful blog post that share some important tips on how to pay off debt.

I think what you are talking about is along the lines of a consumer credit counselor or agency. Here in NJ its called "consumer credit counseling of NJ" and they negotiate with your debts and consolidate it into one monthly payment. I used them years ago and the thing that bothered me was it was still a ding on your credit. Its not like you were taking out a loan to pay them off and then paying one payment to the lender. They advocate on your behalf to allow you to make a consolidated payment to one place that gets disbursed to all your debts. If that is the route someone wants to go then its definitely better to go non-profit with your state or county. BUT if you want to pay them all off and have that reflect positively on your credit report and have one payment you will have to borrow the money. At least I think this is the way it works.

I assisted my friend who had a bunch of consumer debt that he got behind in, after he got seriously ill and suddenly could no longer work. He was leaving his phone off the hook a lot. He defaulted on a bunch of debt. He did manage to pay off a few things. He had a couple of credit cards that he could still use. I told him to pay for everything with a credit card, but pay off the credit cards in full each month. After doing that for a few years, he now has a very nice credit rating of over 800. Every week he gets offers from banks wanting to lend him money at attractive interest rates. Rebuilding credit is more possible than one might imagine. Banks whose credit cards he defaulted on 10 years ago now want to issue him credit cards again.

What banks care about is what they think you'll do in the future, NOT what you did in the past. They only care about past behavior, if they believe it predicts future behavior. But they are very open to being persuaded that a person's behavior has changed, IF they see evidence of a sustained change in how a person handles money.

Lots of extremely successful people have gone through bankruptcy. 0ur economic/legal system is designed to allow people to take chances and fail and start over again . . . even repeatedly. If everyone was so cautious and careful that no one ever risked getting into financial trouble, we'ld all still be wearing loin cloths and living in caves. Dump the guilt. You're allowed to try things that don't work out . . . and then try again. The banks and businesses you weren't able to pay back were founded by men and women who had the same thing happen to them. A rich, strong bustling economy depends on people willing to take risks that don't always work out. That's why we got rid of debtors' prisons. It's wrong to lie in order to get a loan. But if you fill out a credit application honestly, it is partly the job of the bank to not lend you money foolishly. Banks have been guilty - sometimes - of putting a ridiculous amount of temptation in front of people who lack financial experience. That is wrong. Handing out too many credit cards to college kids is wrong for banks to do. But they've done it. Companies that lend money have a moral obligation to act responsibly. They're supposed to discourage unwise borrowing. "Payday loan" companies do the opposite and offer cash the way drug dealers offer dope. All the blame does not belong on debtors.

I second Rose76's previous comment regarding just letting accounts go into collections.

I've done exactly that before. I lived without a verifiable income for most of my life so they wouldn't have been able to sue me if they wanted. Now that I'm a student and have a federal work study job (that pays crap BTW), if I were sued and had my paycheck garnished (IDK if they can even do that since my job is part of my financial aid), I would just quit the job and go back to donating plasma or trading MMORPG currency for bitcoin like I used to do which they wouldn't be able to detect and take.

I say this only because I may be faced with a similar situation in the upcoming months. I've got myself into a bit of a nasty cycle because I struggle with school due to my mental health so I've taken lots of time off work because it's a struggle for me to cope emotionally with 4 classes and a job. As a result, I ended up having to live on credit cards during the end of a semester and last summer (because I decided to take an 8 week math class which I could NOT handle with a job). I then had to take a student loan to pay off my credit card debt. Of course, I finally learned from my mistakes and dropped my courseload down, but the damage is done.

I currently have 3 credit cards. The only card I'll go out of my way to pay is the Capitol One card because they will upgrade your card automatically every 5 months without considering your credit history IF you make your monthly payments on time every month. The other 2 cards are garbage with their high annual fees and the fact that they won't give you automatic increases means I'm not going to go out of my way to pay them over let's say using the money to improve my life in some other way.

Besides, in 10-15 more months, I could get a $6000 limit out of my Capitol One card which is the most credit I'll ever need in my life, considering I don't intend to ever get a mortgage or a big fancy car loan.

Avoid a 'debt consolidation' - particularly through a bank. You can instead reduce your payments by getting the assistance of debt reduction organisations. Most of these are free and run by volunteers. What happens is these people act on your behalf and approach your creditors about reducing your interest costs and even the principal on your obligations. The result is a significantly lower monthly payment and a more rapid schedule to pay it off. The bonus about this is that you can avoid bankruptcy - which generally sticks with you for seven years. Basically you are restructuring your debt instead of taking out additional credit to consolidate it.

If you've borrowed from different lenders, a debt consolidation loan could help you take control of your finances.