I have a mortgage on my house, I do not want touched, or my house to be used as colladeral, and I owe about $2000 on my car, which I also do not wish to be touched.
What is the best thing for me to do?
You have a couple different routes you can take:
Consolidation: either getting a personal loan to pay off the individual debts or use a consolidation company. However, be careful regarding the company you use, as there are many scams out there.
Negotiations with your creditors: This can be very effective for lowering your monthly payment and/or interest rate. Get all agreements in writing.
You can look at filing for bankruptcy, although this may be an extreme solution in your situation.
There may also be a state law program (in Wisconsin we have a debt amortization plan).
I would strongly suggest you contact a local bankruptcy attorney, as they will be well versed in your options and can give you direct advice based on your individual circumstances.
Consolidation-where you repay the debt is option one
Calling the creditor to ask for an interest reduction and a lower payment may work but agreed get it in writing.
Chapter 13 bankruptcy and repay debt without interest paying off your car also. A good bankruptcy attorney will go through all your options .
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First things first, loan consolidation generally does not work. It is based on a scam that repays credit cards with the lowest balance first. In the mean time, the other cards are not waiting around so they increase their interest rate can sue you.
Unfortunately, $8000 is the minimum amount to owe to consider filing bankruptcy. So, you may want to get a lower interest loan maybe even secured by your house.
Mr Schwartz is correct, most consolidation loans are a scam at worst and a poor financial decision at best. I would contact Consumer Credit Counseling Service of Buffalo to discuss a possible payment plan for your credit cards: 1-716-712-2060.
IMPORTANT POINT: I am NOT advising you to contact just any debt consolidation/credit counselor. Many, many, many are total frauds. In particular you do not want to contract with any "debt consolidator" who is out of state (think of it this way, it is much tougher to get your money back from someone in Texas who has defrauded you than it is from someone around the corner.)
CCCS is a legitimate service (United Way Agency) they will review your expenses and income and propose a repayment plan.
Yes, it is possible to settle the account and pay less. However, as a general rule you would need to be behind to resolve the account. If you choose to use a debt resolution company it is my strong suggestion to see if they are licensed in your State to do business, that they maintain an office you can go to and that they are not taking any money up front from you. Try to find a reputable attorney to help you.
Best of luck.
Nothing in this shall be deemed legal advice in any way and is meant for general informational purposes only. No attorney client relationship has been established.
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