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One of my favorite parts of Get Rich Slowly is the weekly “Ask the Readers” section. It’s fantastic to see how well this community pulls together to help each other find solutions to financial dilemmas. Most of the questions come via e-mail, but last week I met a man named Aaron who reads the site. He told me that he could use some reader advice for his situation. Here’s Aaron’s story:
My girlfriend has managed to get in over her head financially. This is partly due to her own foolish spending patterns, but it’s also partly due to her family. She co-signed on a credit card with her father, and then he racked up a few thousand dollars in debt and stopped paying on it. Her sister has several kids and no job, so my girlfriend pays for her phone and car repairs, etc.
I’m not entirely sure of her complete financial situation, and she’s hesitant to disclose everything to me. I want to help her get to a stable point where she can:
- Pay all of her bills every month instead of putting them off, accruing late fees, and dodging calls from creditors.
- Actually start saving some money.
How can I help her to put a plan together to get all of this straightened out? I’m interested in non-profit consumer counseling services, but I’m also wary of companies that will just take money from her and not actually do any good.
This situation sounds tricky because it doesn’t just involve Aaron’s girlfriend, but her entire family. For some people, family comes first, even if that means sacrificing their own financial security. It’s a price they’re willing to pay. Still, it may be possible to help her.
First, I think it’s important to be leery of debt consolidation companies. These are not the same as consumer counseling services. When my brother got into financial trouble, he and his wife sought help from a debt consolidation company. They regret making this choice. The company didn’t do everything they promised, and in fact, made matters worse.
Dave Ramsey is wary of all debt consolidation services, but from what I’ve heard, there are reputable non-profit agencies that can help people with their problems. At MSN Money, Liz Pulliam Weston has put together a short guide to credit counseling. A recent Consumer Reports article suggested starting with these two organizations:
- National Foundation for Credit Counseling
- Association of Independent Consumer Credit Counseling Agencies
I’ve also heard people recommend United Family Services. Also, the U.S. Federal Trade Commission has an on-line guide to choosing a credit counselor. (And don’t forget to that Dave Ramsey’s Total Money Makeover has helped many people turn their lives around — including me!)
One final note: It can be difficult to approach these subjects with a loved one. You mean well, but your partner or family member may not always see it that way. When speaking with his girlfriend, Aaron should be careful not to damage the relationship. (And this means different things to different people, of course.)
Do you have any advice for Aaron? What would you do in this situation? How can he help his girlfriend take control of her finances and turn things around? Also, do you have any experience with debt consolidation and/or consumer credit counseling? If so, please share your story.
This article is about Ask the Readers, Choices, Debt, Relationships Friday, 24th April 2009 (by J.D. Roth)
April 24th, 2009 at 5:14 am
I would suggest enrolling her in Financial Peace University. An open, group-based environment can be very encouraging, especially in her desperate situation. He could even go to it with her.
Non-profit counseling is obviously preferable, however I’d really try to avoid either, at least at first.
I think both of these things can lead to someone putting off the responsibility. The best thing in the world for her (like me) would be for her to really have to come to terms, accept responsibility, and realize she has the power to change it. If you let someone else fight your wars, it’s easy to never change the base habits.
Either way, good luck! She’s lucky to have you right now to help her through this.
April 24th, 2009 at 5:15 am
Normally I would also say to stay away from credit counseling, but this girl is in need of an independent 3rd party. It’s amazing how we’ll listen to “professional” advice even if it’s the same advice that would come from a loved one.
This girl not only needs to learn how to manage her money, but at the same time she must learn how to keep her money separate from her family’s money. You won’t fix the root problem with a debt consolidation.
April 24th, 2009 at 5:22 am
Stay away from debt consolidation. My sister was in a similar situation and ended up consolidating debt without changing overspending habits and got in worse. In the end the solution was to go to a free debt counselling service (in ireland this is a government run service) and these negotiated repayment terms on all her debts for her, (effectively no new interest will accrue, and she pays off a small amount if her arrears every month).
This has allowed her to live again, but her credit score is irreparably damaged, and she will continue to repay these debts for 40+ years (You cannot wipe personal debts through bankruptcy in Ireland)
April 24th, 2009 at 5:43 am
At risk of sounding heartless, I would be more concerned about whether he intends to have a long term relationship with her. If her family is that out of control, it could wreak havoc on a marriage. Unless she is willing to put her foot down and separate her finances from those of her family, I would be very cautious about anything long term.
I would agree about the National Foundation for Credit Counseling. Anyone not affiliated with them, and especially any of these “debt settlement” agencies (the ones that advertise they’ll tell you what the creditors don’t want you to know - what a crock), stay far away from.
April 24th, 2009 at 5:45 am
It kind of sounds like more a family issue than a financial issue. Does she have access to an Employee Assistance Program at work where she could get some free counseling?
April 24th, 2009 at 5:49 am
I was in a situation that was similar, and the results were not encouraging.
Long story short, people who irrationally presume that resources are infinite do NOT make good relationship partners.
Get out early, cut your losses and breathe a sigh of relief.
If you stick around your paycheck will disappear before you even get it; your credit cards will be maxed-out before you can even say “Eighteen Percent Interest” and your life will be living hell from which no escape will be possible.
Women who do this inflict what I call the “Delightfully Indulgent Daddy Syndrome” on the men in their lives. Simply stated, ‘Daddy’ will indulge his princess incessantly, which will build the expectation that the man in her life must do the same. Even if she snags a very wealthy boyfriend/husband, the spending will exceed even those ample resources. In short spending will always outstrip income/assets and the end result will be that she will dump you the minute a bigger, better deal comes along.
April 24th, 2009 at 6:01 am
As far as practical help goes, I think that making a Statement of Affairs would be a good first step. This means listing all bills/outgoings and amounts, all debts and their minimum payments, and balances owed and interest rates. I’d add to the list the amount of money that she actually spends on contributing to her family.
Any reputable organisations looking to help get her out of debt will need this information, and it’s possible that in laying it out on paper she’ll be able to see solutions that aren’t obvious currently.
April 24th, 2009 at 6:14 am
I’ve tried helping friends and family in the past with financial issues, gambling issues, addictions, emotional drama, hoarding … so many issues that never get resolved by ‘helping.’ The more you try to help, the more it keeps them going on their own destructive path. Think about it - what kind of father would force his debts on his kids? Yes, some families are tight-knit and help each other out, but I have a hard time believing it’s been mutual. How long has her sister been relying on her to support her kids? Any plans to change that on the horizon? There’s a never ending demand for free money, and unless Aaron wants to support a family of 5 before he even has his own kids, he should stay out of it. Aaron should be very careful about becoming an enabler to a bad situation. His girlfriend is hesitant to disclose to him, and it doesn’t sound like she’s even asked for help here. So don’t. He should keep his finances completely separate from hers and, if and when, she wants help, then begin with giving her information about co-dependent relationships and financial abuse within families.
April 24th, 2009 at 6:23 am
I’m with Jen. He needs to figure out if this is a train he wants to ride. She doesn’t trust him enough to share her numbers but she trusts her family enough to let them hold her down. That’s a sign to cut and run in my book.
April 24th, 2009 at 6:29 am
I went through credit counseling a few years ago. After racking up too much debt, then going to grad school I just couldn’t keep up with payments. It’s not that I didn’t have the money. I didn’t take the time to keep up with each card/loan and my money in general. So things fell apart. I hit the bottom, credit cards calling my work-study employer? Yeah, bad. I signed up with a credit counseling organization (ACCC) and all I had to do was make sure I had enough in the bank to cover their one payment each month. They automatically deducted it and I could finish my degree in peace. They were very helpful and understanding as well. Still the trick was learning how NOT to spend money to begin with (and that included not lending money to family, it was hard, but they, your family, will understand). I finally payed the whole thing off and am now free of consumer debt. Student loans are another thing.
April 24th, 2009 at 6:31 am
I agree there are family as well as financial issues going on, and that EAP counseling mentioned above(which is indeed free)is a good idea. I would also give Consumer Credit counseling a try, however, and not dismiss it out of hand. If the first session doesn’t feel right, a person can just decline their services, without having lost anything.
In any event, the crucial focus is to live within one’s means. I think a relationship, if it’s going to be healthy and long-term, has got to embrace that principle; it’s like a law of nature. I’m a former counselor. See this short piece on crafting a happy marriage http://www.diamondcutlife.org/diamond-cut-sustainable-marriage/
April 24th, 2009 at 6:42 am
I have been using credit counseling services from GreenPath (a national non-profit CCC). They have been great and have lots of information on their website.
He could try showing her the website or another one like it to get a feel for where she is emotionally before trying to solve her problems for her. When I first met my husband, he wanted to rescue me, but I was very resistant because I didn’t want to feel like I owed money to someone I love.
Eventually though, he convinced me to at least go meet with the GreenPath people and it was the best thing I have ever done. The most valuable thing they did was to get my interest rates lowered, so my top one went from 36% to 8%. I only have one more month of payments left to go!
April 24th, 2009 at 6:43 am
If his question had been, “My girlfriend really wants to get out of debt. How can I help?” I’d have a different answer. But for now my answer is to let her sink. She has to WANT help and be actively and intently seeking it before any sort of program will improve things. For now I think the best thing Aaron could do is to model good financial behavior and not pay for things for her.
April 24th, 2009 at 6:55 am
Paying someone else to fix your mess doesn’t change the underlying behavior - especially with most of these “credit counseling services”. You very often get no counseling for the fees you pay.
Have her start reading some books on personal finance or link her to some PF blogs. Maybe she’ll get interested and take some initiative on her own. Good luck.
April 24th, 2009 at 6:55 am
Aaron can’t do much of anything until his girlfriend can admit that she has a problem and decide that she wants to do something about it. You can give all of the financial advice in the world, but until someone fully commits to change - nothing will improve in their financial situation.
Admitting to being in financial trouble is not something that comes easy; people do not like admitting failure. It helps to communicate to people that they are not in this alone; lots of people have run themselves into equally troubled situations. In addition, there are countless stories of people who were able to get themselves out of debt and change their lifes.
Once his girlfriend is on board for change the first exercise that needs done is listing out all of the in’s and out’s - how much money is coming in and how much is going out. Today she has more going out than going in and thus she is in debt. The goal is to develop a plan for tomorrow to take more in than she sends out.
Good luck.
April 24th, 2009 at 6:59 am
Sorry to say, my best financial advice to Aaron is to get out of this relationship.
His girlfriend will never get free of her freeloading sister and irresponsible father without damaging her relationship with them, and regardless of her decision, it will always be a source of contention between herself and Aaron.
April 24th, 2009 at 6:59 am
I’m also a big fan of Dave Ramsey’ TMM and agree with others that taking ownership of the problem yourself leads to fundemental changes in how you view and use money. If you push that job off to someone else you may solve the immediate problem but you don’t change how your emotional connection to money and you’ll likely be back in the same spot at some point.
Regarding family dynamics, that is a tough one. A lot of people say you shouldn’t lend money or give money to family but I have lent money, given money and borrowed money within my family and while I’ve not always been paid back I wouldn’t change my decisions at all.
April 24th, 2009 at 7:06 am
I would suggest credit counseling and possibly even straight up therapy. Sounds like she needs to set boundaries, learn why she’s overspending, and use that knowledge to say no to the family and get a handle on her own finances. Aaron shouldn’t pay her bills.
As a woman married to a former compulsive debtor and spender who’s turned his life around dramatically, I can safely say people can change, but really have to hit bottom and need an impetus to change. I wouldn’t kiss off the relationship entirely. She sounds like a generous person.
April 24th, 2009 at 7:08 am
P.S. I think it would also help Aaron and his girlfriend to sit down and talk about where they got their money attitudes, their family’s influences, and what they believe about money now.
April 24th, 2009 at 7:09 am
Debt Consolidation companies = bad.
Consumer Credit Counseling agencies = good.
Some 5 years ago we (wife & I) got into some dire straits for a variety of reasons, but found a local office through: http://www.creditcounseling.org
Disclaimer: No affiliation, just a satisfied client of their central New England office.
After looking at 2 DC firms (one who filed bankruptcy and got a class-action suit piled on them afterwords), we got good input on the CCCS in our area, and it was helpful that they offered local seminars (free) on budgeting, purchasing, and (at the time) a buddy system if “you felt the urge to splurge”.
Check your State registry boards and the BBB, and I’ll bet you find good reports on a regional CCCS type entity in her area, but “less than stellar” reports on DC companies.
As a few opined: Tough step to take, but worth it in the long run: IF one finally MAKES that decision AND sticks with it.
In my bad English: The problem don’t go away on its own.
April 24th, 2009 at 7:15 am
This sounds like a family issue more than a financial one. Frankly, Aaron needs more information and numbers to be able to give responsible and prudent advice. (sister’s unemployment benefits? welfare? what’s the budget look like? what’s going on with dad?)
If the girlfriend won’t say, or–heaven forbid–she doesn’t even know, there’s really not much Aaron can do (without making things worse by his own uninformed decisions) except step aside and watch gravity takes its course. It’s ultimately up to the girlfriend whether she wants to learn the hard way, or the harder way.
Lastly, if she realizes what she needs to do, she should get help from more people than just Aaron. Strength in numbers.
April 24th, 2009 at 7:16 am
I have had to use credit counseling service twice…once after I graduated from undergrad and once after grad school. I had to pay for everything on my own and although I was still working full time, I wasn’t able to keep up with my expenses once the student loans ran out. I went through a very helpful organization (Money Management International) that worked with the credit card companies to reduce my interest rates making my monthly payment manageable again. I made my final payment about 6 months ago and my credit score has not been damaged in any way by using a credit counseling service and in fact it’s pretty good!
When I met my boyfriend he had deferred his student loans in order to make sure he was able to just pay the minimum payment on his credit cards after he racked up debt from college. He’s a year into the program and is once again able to make his student loan payments and can see the light at the end of the tunnel.
We have been able to live credit card free and have also manged to finally save some money. If I had to do it again I absolutely would. One thing to note is if she were to use a credit counseling service, one part of the agreement is you cannot use your credit cards. Your accounts will be closed and if you open a new credit card the counseling service will find out, you will be removed from the program and your interest rates will go back to what they were before. She will have to learn to live without them, but they will teach you how to do that. If she’s ready to commit to it she should consider a credit counseling service.
April 24th, 2009 at 7:21 am
Do not marry her until she has gotten this straightened out. And if she is not willing to get this mess sorted then run don’t walk to the nearest exit.
You do not want to take on this burden of supporting her entire family. And if she is not willing to put herself, you and your relationship before freeloading relatives then she is not old enough to get married.
Now I need to call my dad and tell him what a wonderful guy he is. I haven’t had to go to the Bank of Dad in over 15 years because he taught me how to avoid that indignity.
April 24th, 2009 at 7:22 am
Aaa em, in my best Dave Ramsey voice: Counseling and consolidation are not the issues. Credit counseling won’t do anything for her that she can’t do for herself, namely negotiating with creditors and getting on a plan. Why pay someone to do if for her. Secondly, consolidation won’t solve the problem if she doesn’t change her spending. Financial Peace is a great idea, but short of that get Dave’s book the Total Money Makeover and follow the Baby Steps. It’s not rocket science, spend less than you earn, get and stay current on your debts, and and pay your debts down to zero, starting with the smallest.
April 24th, 2009 at 7:23 am
As many have said - get out of this relationship, get out now! If Aaron is responsible with his money why would he want to be in a situation where his partner could be so crazily irresponsible??!
On top of that, as well all now from the success of the various 12-step programs you can’t help someone who doesn’t want to help themselves. It appears she is very reluctant, if she does go along it will only be because of his insistence - that never leads to a good result.
Stop trying to “fix” someone! You’re not her Daddy. Unless she makes a dramatic about face and comes begging for help get out as quick as possible. This is only an indicator for many other underlying problems.
April 24th, 2009 at 7:32 am
If she is open to accepting Aaron’s help, I think the best place to start is organization. Can you help her to start a list of all her debts, order a free copy of her credit report to make sure she knows about all her debts, go through the stacks of bills that are probably all over the place and determine what needs to be kept and dealt with and what can be shredded or trashed. If she is willing, then go at it determinedly, but understand that it will be difficult and she’ll probably want to quit several times before its over with. I also think the comments about counseling and FPU or some other program that helps the individual retain/find control of their financial situation rather than takes control is great advice. I used to work for a big bank and talked to people who were in truly heart breaking situations b/c of credit consolidation places. They were sopping up all these folks’ money and then paying their bills late and accruing more fees in their name. I would be extremely cautious with any consolidation. Best wishes!
April 24th, 2009 at 7:43 am
Roxanne, we need more dads like your Dad. Give him a double dose of thanks from the wider world.
April 24th, 2009 at 7:46 am
I agree with Albert- this is more a family issue because he might get his GF help but can he change her whole family?
I married someone whose 2 siblings had never learned anything about finance and self-support but to keep asking for money. His parents indulged these “kids” until almost the end of their lives- when the kids were in their 40’s and 50’s(basically supported by parents!). My in-laws were not wealthy either. When it appeared that my sister-in-law hoped to continue this process with my husband, I realized that it was very good that my husband and I had separate accounts. I was very diligent about savings accounts for our kids’ education. I told my husband that he had to pay his portion of our bills and also take into account that I would not take up the slack in our family accounts for money he would give a sister who basically refused to work(because “I am not like you, I can’t punch a clock or let someone else tell me what to do”-but being her own boss didn’t work either- cost my in-laws a lot though ). he gave her a few thousand and then cut her off. It did result in some extremely nasty phone calls and at least one more than crazy ranting letter. So will the GF be willing to stand up to her family?
April 24th, 2009 at 8:03 am
As a debt collection attorney, I see this situation all the time. Just reading Get Rich Slowly and Dave Ramsey will provide more than enough info to create a “get out of debt” plan, although a debt counsellor may be helpful. As for debt consolidation companies, once it gets legal they are almost always counterproductive. Debtors assume the legal process has stopped, and then discover that judgment has been entered against them. About the defaulted credit card, get it taken care of (pay off or get into a payment plan) ASAP. Once in default, the interest rate skyrockets, late fees accrue, and eventually attorney fees and court costs may well be added to the debt.
April 24th, 2009 at 8:43 am
I have to agree with the other commenters, she needs to figure out what is right for her. One of the things that I would like to note is that almost all of the “Debt Consolidation” companies that you will find out there aren’t actually debt consolidation. When you think debt consolidation you think “oh I’ll get one big loan to pay off my small loans, and it will have smaller interest”. That is completely not what these people do. Most of them are debt negotiation firms, where you pay into a savings account every month and STOP paying your bills. At that point, they take like $75 a month or something and pool you together with hundreds of others who are also in bad with the same companies and try to negotiate with them to write you all off as a tax break. I’m of the opinion that it will happen less and less as the market is bad because it will make the banks look bad to not have those assets on their books, marking them as a write-off takes them off the books for them and they look worse.
As a bonus, the people at these “debt consolidation” companies are super pushy salespeople. I tried to call some of them up looking for classic consolidation, and they seriously kept me on the phone for way longer than I wanted. I’ve got a blog post about my experiences a few years ago at http://base0.net/archives/30-debt-consolidation-scam-scum-or-sweet.html which has garnered a bunch of comments both pro and con on debt consolidation.
April 24th, 2009 at 8:44 am
Albert I will send dad your love. As my mother used to say they would not have a pot to piss in if it hadn’t been for him.
What that guy can do with numbers and finances is amazing.
He is the type of guy who when I was a teenager would make me write out the mortgage checks for the year every January so I understood how things work. $86.00 a month.
I can’t fathom a father that would financially screw up a kid.
April 24th, 2009 at 9:03 am
MYOB. Seriously. You want this for her, but nowhere does it say she wants it for herself. Until she does, you’re just coming across as patronizing and controlling and wanting to “fix” her. This is who she is right now. You have to decide if this is the person you want to be with, even if she never changes, because YOU CAN’T CHANGE HER. Until she specifically asks for your help, stay out of it.
April 24th, 2009 at 9:11 am
Did she ask for help? If she didn’t, then you can’t help her. Do you want to marry her? If your answer is, “I’m not sure yet”, then this is none of your business.
If the answer is “Yes, definitely.” then sit down and have a talk with her. Let her know that you love her and could see a future together, but you have concerns about her finances. If she wants marriage with you, then she needs to address these concerns. Do not tell her what she has to do - that’s for her to decide. If she asks for your opinion and advice, give it to her. Your job is to let her know you care about her, and what your concerns are. If she is unwilling to make changes, then leave. You will be entangling your finances with hers and her family problems forever if you marry her. That’s even if you get a divorce later. In divorce, you will still bear the scars of anything that comes out of it. Probably a broken heart and a pile of bills. Don’t marry her thinking things will be fine “if only if…”
You cannot fix her problems. She has to fix it. However, you can make your situation as messy as hers.
April 24th, 2009 at 9:18 am
I went to one of those non-profit credit counselors years ago. They were not hugely helpful - I was already doing everything right, I just didn’t make enough money to live in LA. However, having them confirm what I already suspected gave me the impetus to finally ask for (and get) a raise at work that kept me from sinking further.
My BF went to a debt consolidation company. It was a ripoff. He paid the same amount but the money never got to the creditors. He ended up filing bankruptcy.
I am also really offended and disgusted by family members that would deliberately destroy each other financially - especially parents!!! but I know it happens all the time.
I am fortunate to have a Dad like Roxanne’s and all my immediate family members are reasonably sane and functional. 
However my inlaws, while managing to do well enough for themselves, somehow failed completely to pass their acumen on to my husband, who is a bit of a flake. He gets better all the time though. 
April 24th, 2009 at 9:18 am
Based on my own experience when was in mountains of debt, the only people who deal with these sorts of situations that *aren’t* just scam artists are bankruptcy attorneys (I never did end up filing bankruptcy, though).
I agree with the “you can lead a horse to water, but you can’t make her drink” assessment that other people are mentioning, though. Until she asks for assistance, anything you do will probably just be looked at as annoying and invasive. If this is a huge deal to you, but she doesn’t care about it, go find yourself another girlfriend that shares your values. You’re either going to break up eventually, or you’re going to get married, and it’s not a good sign for a marriage if you guys have completely different viewpoints on matters like this.
April 24th, 2009 at 9:28 am
Enroll her in Dave Ramsey’s Financial Peace University or get her his book. She needs a completely new way to think about and approach her finances — NOT the bandage solution that credit counseling will give her. She also needs some serious boundaries with her family members. Until then, her finances will never be stable and neither of you will be free from drama. In the long-run, you need to really think about whether you want to build a relationship with this woman. Unless she seriously changes, you’ll never have financial peace and you’ll be married to her insane family.
April 24th, 2009 at 9:41 am
I was one of those women who couldn’t manage money, who spent incessantly and ate out on the credit cards every day. Somehow I managed not to get so bad that I couldn’t pay it off sporadically and then start again. No matter what you blame it on, relatives, your own needs, timing, etc, there is an underlying problem that needs to be addressed through therapy, in my opinion and personal experience. Much like alcoholism the person has to hit bottom and decide for themselves that they want to change. Since the whole impetus fopr change seems to be coming from Aaron, I don’t think a plan to help the girlfriend will work. You can’t push people into change. I’m afraid my answer is to break off the relationship but to be lovingly honest about why.
April 24th, 2009 at 9:43 am
This post struck a cord with me because my husband’s brother has played the role of your girlfriend’s family for years. Unless your girlfriend is willing to stop supporting her family by giving them money, there is no solution. It’s painful. It will get ugly. But it’s the only way.
For you though, I agree that you can’t help someone who won’t help themselves. That one piece of advice can save you a lot of time and pain. Take stock, decide what you want from the relationship and act accordingly.
April 24th, 2009 at 9:52 am
I would be very careful when talking to her about money because her family obviously depend on her a great deal. She will have to make the difficult decision as to whether or not to keep giving them money, and it’s a lose-lose situation.
Either she stops and it damages (for a short while, at least) her relationship with her family. Or she decides to keep helping them and it damages her financial position.
Whatever she chooses, it’s her money and you must not be judgemental. Lead by example, rather than trying to persuade her to do anything, and accept what a difficult situation she is in.
April 24th, 2009 at 9:55 am
I once thought that love conquered all, but that was before I had a husband that could make money vanish. We both had good jobs, but he managed to make more than $50k/year vanish without much trace. Hobbies, hotels, giving it to friends, eating out, over tipping, etc - we bled money. I dared not spend much and eventually we fought more and more about money, and it was a major factor leading to us splitting up. His family were frugal so no idea where it came from. So beware - I think making sure you are compatible money-wise is as important as making sure you agree on children, and religion.
Especially important - do NOT buy a house together!
April 24th, 2009 at 10:33 am
Another thing to consider with this relationship is all the emotional burden Aaron and his girlfriend will have to carry because of this. Financial problem often leads to feuding among family members and I can totally see that happening sooner or later.
April 24th, 2009 at 10:59 am
Bluntmoney - You got it exactly right. Just wanted to second your comments. Girlfriend needs to want to change, boyfriend can model good behavior and not enable. Beyond that, it’s not his business.
April 24th, 2009 at 11:10 am
Why not try one of Dave Ramsey’s Certified Counselors? They can help walk her through the situation and teach her how to handle this herself for a fraction of the cost of the monthly fee that it included with consumer credit counseling services. Also, doesn’t working with a credit counseling agency negatively affect your credit score?
April 24th, 2009 at 11:16 am
Folks, people who are so far in debt they can’t see their toenails aren’t going to read this blog.
I say bring back debtors’ prison.
Yup, you betcha, lock ‘em up.
That would get a major rise from the folks in Washington.
Bozo
April 24th, 2009 at 11:16 am
Unlike many commentors, I don’t believe it’s time for Aaron to abandon ship. I think he honestly loves his girlfriend and wants to help her. He’s not doing this for himself!
Obviously he should keep his finances completely seperate from his girfriend’s for the time being. And he should really make sure she WANTS his help.
DO NOT LEND HER MONEY. She will not be any better off and he may never be paid back. If he is really serious about helping her in the long run, he should put any money he is willing to GIVE her (not lend her) into a savings account. That way she is building savings, he is helping her out, and she is not building more debt. Perhaps this savings could be used as an emergency fund in case she ever gets in REALLY bad trouble, or maybe as part of a downpayment for their first home or wedding.
Sounds like this girl needs a budget! Make a list of every bill she has each month (including credit card payments), how much it is, and when it is typically due. If the amount varies, guess HIGH. If the due date varies, guess EARLY. Set aside the money to pay these bills in an envelope, a special checking account, just somewhere where she knows the money is SET ASIDE for BILLS not fun/family bailout. It has to be somewhere she must consciously withdraw from, knowing that it is her bills fund.
If she really needs fun money, start setting aside the late fees and/or interest she AVOIDS into a fun money envelope. For example, if she pays a bill on time and avoids a $20 late fee she usually incurrs, let her buy a $20 clothing item, or whatever. Aaron may want to donate to this fund to reward her smart financial choices.
She needs to have a good long talk with her sister. Set a maximum amount that she will give to her each month, and limits on what she will help pay for. Transportation and phone calls sound reasonable, but make sure she is not driving a Lexus and talking on the lastest iPhone. Be very firm about the maximum, and never EVER give her more than that. Only give her money when you are sure she is doing something proactive, like looking for a job or taking the father to court. Her sister needs to know that she isn’t a magical never-ending money tree. If possible, set a date (maybe 1-2 years in the future) at which point all money-flow to the sister will STOP. This should help spark Sister into getting her act together.
Well, this ended up being rather long, but I really wanted to say something useful. People just saying “RUN” are not helping. Love is usually a lot stronger than greed, and I think the girlfriend really loves her family (although she may still be mad at dad) and doesn’t care if she’s broke. Aaron also really cares for his girlfriend, and despite her financial woes, he doesn’t want to leave her. Rather than break her heart, let’s try to fix her bank.
April 24th, 2009 at 12:29 pm
I am going to have to agree with Cathy’s post #33 and many others like it. If the GF hasn’t asked for help, advice is not going to do anything.
Aaron has to make some decisions. Here is where $$ and the heart have a hard time co-habitating. Aaron will need to take a look at his situation and decide whether he is in it for the long and bumpy road ahead. Aaron needs to protect himself first. There is a reason why she is not forthcoming with information. What is she hiding? Aaron should be careful of getting involved to the point where he becomes legally financially responsible for some of her debt before even knowing what her net worth is.
I know it sounds harsh but you gotta look out for # 1 first and then help others. This is unlike Aaron’s GF who looks to help others first. Which although admirable, will lead to stressors in her life
If her finances start becoming a major issue in the relationship (which appear to be happening, hence the request for assistance), Aaron will need to prepare a plan of attack with outs along the way if she does not follow through.
April 24th, 2009 at 12:56 pm
I’m too lazy to read every comment but I wanted to add my one cent. Sorry, but we’re in a recession. I’m keeping the other cent for me.
I used Consumer Credit Counseling Service a few years back and wouldn’t recommend to anyone. A few phone calls to your creditors will get you the same thing. If you want to just send them $20 to get them off your back, you can do that yourself. You don’t need CCCS to do it for you.
This problem is deeper than that though and will involve breaking habits and possibly isolating or damaging relationships with family. Tough call. The only person who is capable of deciding what to do is your girlfriend with your help and some informed opinions. Good luck
April 24th, 2009 at 1:43 pm
I agree with Courtney (#45): there’s a lot of general advice here, but not much in the way of specifics. While I completely agree that Aaron can’t solve his GF’s money problems for her, I do think there are steps he can take to get her to start thinking about this stuff.
Doing some preliminary research on his own so he can give guidance if/when she wants it (like assessing the credit counselors) seems like a good idea.
Taking her out to dinner and working into the conversation that she seems stressed out about money and if she wants to talk about it he’s available to listen and will work hard to not pass judgment seems like a good idea.
If she’s interested in talking about it in more detail, helping her to focus on her own habits and spending first seems like a good idea. Once she starts to get a handle on her own money, she may be able to start thinking about her family.
It’s a shame that her dad was so irresponsible, but at this point, it seems like what was done is done and since she co-signed, she’s unfortunately responsible. So she’ll probably just have to account for that in her own budgeting, and hopefully come to the realization that she shouldn’t do that ever again.
In other words, maybe there need to be some “prenatal” steps before getting to the baby steps of paying down debt and setting up an emergency fund–and could also come before arbitrarily making the decision to leave the relationship.
April 24th, 2009 at 2:00 pm
I hate to disagree with some posters here but Credit Counselling = Loan Consolidation.
Keep in mind, when you sign up with Credit Counselling services a note goes on your credit bureau and it will impact your credit score and opinions of prospective creditors.
The benefit of working with them is the lower rate and single payment, but beware of other impacts.
At the same time they do not perform any counselling per se, they actually just consolidate your loans (hence the equation in the beginning of the post).
Despite being non-profit, their primary goal is to make money (by charging banks part of the settlement funds), which is why so many of them eventually end up in courts.
I have dealt with Credit Counselling agencies from the professional stand point rather than a customer, so my opinion could be a bit skewed.
April 24th, 2009 at 2:12 pm
“In other words, maybe there need to be some “prenatal” steps”
Wonderful idea. Folks who can’t pay their bills should be cautioned about having children.
I suspect there is a connection between deadbeat parents and deadbeat children.
However, given the fact Washingtonians pay deadbeats to have more children (I’m thinking welfare here), it’s a lost cause.
Have a nice weekend.
Bozo
April 24th, 2009 at 2:22 pm
I agree with J Ro.
1) Do NOT marry this girl until she has cut off the strings to her family.
2) Do NOT give her $.01 until she is completely open and willing to set boundries with her family.
3) If she sinks Aaron has to give tough love and let her sink. Do not help or let her borrow until boundries are set and she is willing to limit her giving money to family.
April 24th, 2009 at 2:30 pm
Run, Aaron, run!!!
When she is ready, Dave Ramsey’s Financial Peace University will be helpful.
She hasn’t asked for help. She won’t tell you exactly how bad things are…Run, Aaron, run.
Before you run, or even if you decide to ignore my advice and stay, make sure she gets her name off the credit card account and even better, closes it, so her dad can’t use it again once the account is back in good standing.
If you stay, she will have to chose between you and her family and that’s never a good thing in a relationship.
April 24th, 2009 at 2:57 pm
WOW there’s a lot of projection going on.
Aaron’s gf is not your ex people!
There’s nothing in this question to suggest that Aaron’s gf wants him to pay her loans or support her.
And there doesn’t seem to be anything saying that she’s wouldn’t be willing to get her finances in order with some emotional support and a little boyfriend legwork.
Have some compassion people.
April 24th, 2009 at 3:00 pm
Folks, deadbeats don’t read blogs. First and foremost, they don’t pay their bills, which means they don’t have internet access. Second, even if they can scam their way onto the net, they won’t read blogs. Mostly, they’ll just watch free porn. Until they get caught. In the library. Oops.
Bozo
April 24th, 2009 at 3:02 pm
I like how some people here seem to automatically lay all the blame on the girlfriend. First, the girl did something common in family life. She co-signed for her father. Many people would never think their father would default on the payments. Further, many people are not educated enough to know that co-signing means guaranteeing a debt. Second, how old is this girl? Young people typically learn the hard way to control their finances. Often it is because their parents did everything for them and they really didn’t learn how to do it properly. My point is I think all the comments about the girl’s irresponsibility are uninformed and possibly misplaced.
As far as debt consolidation goes it is a bad idea almost 99 percent of the time. The companies work something like this: they come up with a payment you can effort a month. You pay that payment to them. The first several payments go to them as a fee. Afterwards, the money goes into an account that eventually the somewhat reputable companies will use to try and settle the debt. Meanwhile, the companies tell you to stop paying the creditors and stop talking to them. While this is going on your credit is being hit from late payments. Further, many creditors get sick of you ignoring them. Consequently, some sue you. Debt consolidation has no force of law because the companies have no authority to force a settlement. Moreover, you can do the same thing yourself. Stop paying, save some money, and eventually the creditors will likely make you a deal to settle.
Debt counseling companies like Greenpath are more legitimate. Further, companies like Greenpath will see if it is even feasible to try and pay the debt back or if you should be looking at options like Bankruptcy.
April 24th, 2009 at 3:09 pm
Not only is debt consolidation rarely the smartest financial move, mathematically speaking at least, but a simple debt tracking form can demystify the management of complex debt accounts.
April 24th, 2009 at 3:22 pm
The girlfriend isn’t here asking for advice, Aaron is. He can’t fix her or change her, he can only decide if he wants to be with her the way things are now. Until she is ready to make changes, he can’t help her. He can only help himself.
She made choices, and now she has to live with the consequences of those choices. She may be young and foolish instead of irresponsible, but there are still consequences, and she still has to make the choice to deal with them appropriately. Or not. Her choice, not his.
April 24th, 2009 at 3:41 pm
I’ll admit that I only read through about half of the comments, but I have to say I’m disappointed. This guy didn’t ask this question for anyone to pry into his relationship. Telling him to get out of the relationship does nothing for him, his girlfriend, her family, or her debt problem.
When I first got together with my boyfriend, HE was the one who realized I had a major spending issue. I was spending more than I made and 8k in credit card debt at 20. If he had taken your advice and ran away from our relationship, I never would’ve learned to break the cycle of credit card (ab)use and would never be debt free.
He and I used a CCC service and got out of a combined $12,000 in credit card debt in 2.5 years with both of us in school full time and making less than (combined) $35,000.
April 24th, 2009 at 5:05 pm
boy this generated a lot of responses!
My thoughts on reading this were
1. does she want your help? If she’s not willing to disclose fully then it doesn’t sound like it
2. If she feels she must take care of her family she isn’t going to get out - because no matter how she changes her spending and bill paying behavior she will still hurt her own situation to help out theirs - and what a mess her family seems like - ugh
If it were my friend asking I’d probably tell them it didn’t give me a good feeling about a future for their relationship!!!
April 24th, 2009 at 5:24 pm
Aaron,
I was in your girlfriend’s position (well… a little different, but similar enough) and my boyfriend was there for me and really helped pull me through, so I would applaud you for your effort.
Here’s the order of her getting into financial shape:
1) stop racking up debt. Until she can stop adding to her balance each month she won’t be able to move forward.
2) Disclose her situation to you, preferrably with her credit report in hand. If you two are going to move forwad in your relationship (and i”M assuming you do) there needs to be complete transparancy. Show her your credit report too.
3) *If she wants* help her to make a payment plan for her debts and set up a reasonable spending plan… I’m thinking TMM and All Your Worth might be useful here. When my boyfriend helped me with this it was really hard to accept his help, there was a lot of bruised ego and arguing and tears, but eventually we made it through, so please be as patient and understanding as you are capable of.
4) You can be both helpful and non-judgemental, work on walking that line. Guilt trips and judgements will only make her feel worse. A fair amount of her debt is probably already shame spending, so try not to add to it.
I hope that is helpful, good luck Aaron.
April 24th, 2009 at 6:32 pm
No where did he say “my GF wants advice or help”. If she hasn’t asked then don’t offer. Have learned the hard way with step-son who sounds alot like GF. Hate to sound harsh, but get out now. Sounds like her family puts the FUN in dysfunctional. Her ties to family will outweigh any well-meaning solid advice you can give.
April 24th, 2009 at 7:02 pm
I would have to say neither…just stop buying things that you can not afford. You have got to go to Youtube and check out that SNL skit about not buying things unless you have the cash to do so…very funny stuff, but great truth to it!
April 24th, 2009 at 7:47 pm
Advice for Aaron? If he were my son, I’d say “Find the exit, open the door, and RUN, don’t walk, through it.” There’s something mighty scary about a family situation where a father would ask his child to cosign on a debt at all, and then, far worse, welch on it. What’s the young woman learning from him? And even if she starts to manage her own finances responsibly, how will this bunch continue to affect her life into the future?
But if love has gone blind at the garden gate, then they should be very wary of debt consolidation and credit counseling services. Many that advertise themselves as nonprofits are not — I almost went to work for one such outfit that proposed to pay me a six-figure salary as an educational director. Not-for-profit counseling groups don’t pay people like that. If advice needs to be had, try to get it through a state agency, a social service organization, or even through community college evening classes.
April 24th, 2009 at 9:50 pm
I think the best way to help people is to live a positive conscious life by example..
So my theory would be that she would self correct if she sees that he has his stuff under control. I would offer the suggestion once, and say if she ever wanted assistance that she should ask, but that I wouldn’t bring it up again.
And then I’d drop it. If it was such a big deal for me that my partner had financial problems, I would look long and hard at the relationship- and see if her behavior wasn’t self-correcting if it would be a beneficial relationship into the future.
April 25th, 2009 at 2:19 am
I think the best way to help people is to live a positive conscious life by example..
So my theory would be that she would self correct if she sees that he has his stuff under control. I would offer the suggestion once, and say if she ever wanted assistance that she should ask, but that I wouldn’t bring it up again.
And then I’d drop it. If it was such a big deal for me that my partner had financial problems, I would look long and hard at the relationship- and see if her behavior wasn’t self-correcting if it would be a beneficial relationship into the future.
P.S. - Sorry, forgot to tell you great post!
April 25th, 2009 at 3:56 am
The biggest problem here may be that she is tied into other people.
Even if she adjusts her own spending and fixes things– she still has the other people to contend with . . .
April 25th, 2009 at 11:01 am
The biggest issue here is not how she’s going to pay off the debt, but rather:
- why her boyfriend asking instead of her
- what are the cultural issues at play which are leading her to take on other people’s debt
If these two things don’t change there isn’t much that can be done. I bet one of the things he loves about her is her generous nature and strong family ties. And I’m willing to bet that helping family with money is something she feels she HAS to do and doesn’t want to change, deep down.
I think therapy around these issues is in order, if she is willing to confront them.
So, what should the boyfriend do about it? Not much. It’s not really his business and he needs to keep his money separate from hers.
What he can tell her is how her financial stress is impacting their relationship. If it’s difficult for him to deal with her “foolish” spending choices and “helping out” her family, that’s legitimate. He needs to address those issues with her and see how she responds. But it can’t be done in an accusatory way. Here’s an example of the pattern he might try to use when broaching the subject with her:
1. Ask her if it’s a good time to talk about something difficult. If not, schedule it.
2. State something good about her spending and financial situation - her generosity, her strong family connection, acknowledgment that the problem spending isn’t all hers, and show genuine respect and love.
3. Tell her that her financial stress is difficult for you to deal with and that you’d like to help her get out of the financial mess she’s in.
4. Hopefully she’ll be receptive and interested. If she’s not you’ll need to back off now.
5. If she’s receptive to the idea, you can take some time (or plan some time) to help her with expense tracking, a budget, and debt pay-down strategy.
6. If things are still going well you can broach the spending patterns she has. Think of the standard advice in case of plane crash - put the mask on yourself before helping anyone else. She’s going to need to set some limits with her family members and get herself in shape before she’ll be able to help them more. This is really hard for people with these patterns and she may need a lot of support. You can work out together what form that support should take, as she’s likely to feel threatened, belittled, or torn. She’s also likely to encounter a lot of negative family pressure when she does start saying no to them. Working out a plan ahead of time for how she can handle requests or perceived needs is going to be really important. The help of a therapist would be great, if she is open to that.
7. Finally, no matter how willing or unwilling she is to accept the help you can offer, you need to work on your own ability to let her make her own mistakes. This part is very hard, but worth it. If you feel she makes mistakes you can not live with, or you can’t handle the stress her mistakes bring to your relationship, you might need to set clear limits around your finances as well as what you talk about together.
As for consumer credit counseling vs debt consolidation, I’ve done each at one point or another - Consumer Credit Counseling service worked for me but didn’t give me anything I couldn’t have done myself. However, enrolling with them and using their counseling can help you get a grip on the reality of the situation and help you put together a disciplined plan to pay it off.
Debt consolidation can be a good thing - but I’d be very wary of the debt consolidation companies. Instead I’d ask at my credit union and credit companies. Combining debt and lowering the interest rate is a good thing. If there is an asset the debt can be tied to (house, car), that might be one way to get a lower rate, however it’s a dangerous course to take because if she misses payments or can’t make the full payment the lender can take whatever was securing the debt.
The other problem with debt consolidation is that if she really can’t afford the payments there is now just big loan to default on. If she has many smaller loans she can knock them off one by one.
April 25th, 2009 at 5:59 pm
Aaron’s never going to kill this weed unless he gets out all the roots. Dad and sister are probably not going to change, so if he doesn’t think his girlfriend will ever be able to say no to them, I’d reconsider the seriousness of the relationship. Even if Aaron and his girlfriend keep their finances separate when they cohabitate/marry, he’s going to end up paying all their living expenses since she’ll always be broke.
April 25th, 2009 at 8:22 pm
Boy, it’s pleasant to see the misogynists rear their head on this site of an evening! Aaron nowhere said that his girlfriend was asking him for money (or that her father was indulging her–sounds like the opposite, actually), but a bunch of people sure exposed themselves by assuming that she did or must be about to.
I’m with the people who said that the problem here is that the gf has not asked for help. This is not a problem because it indicates she doesn’t want help and thus is somehow (at what is clearly a pretty young age) thus beyond all help, clearly unable to change, doomed to be forever bankrupt and/or bringing down her husband with her golddigging ways, etc. It’s because Aaron appears to think it’s his business to control such a major part of his gf’s life before they have made any permanent commitment to each other. Until she asks for help, not only is it unlikely to do her any good, but it’s not Aaron’s place to try to give it. If she isn’t even willing to give him all the facts, she isn’t willing to let him work out her finances. If he models a fiscally responsible life for her but is respectful of her independence, if she’s at all smart she’ll see that he’s living in a way that brings a lot more peace of mind than the way of constant debt and eventually look to turn things around.
(Which is not to say that it’d be a wise move to marry her before she starts changing course, but if she wants him to marry her, at that point it’s fair to raise the issue.)
April 26th, 2009 at 3:16 am
boundaries.
aaron has poor boundaries by becoming concerned with a problem that isn’t his.
my therapist taught me to “literally sit on my hands, bite my tongue, watch and do nothing, then make good decisions for myself. everytime i wanted to leap in there and help, i was to sit on my hands and bite my tongue until the fit passed.” my therapist also taught me to “stay on my own floor tile’. I came from a family with no boundaries so had to be taught as an adult.
the girlfriend has no boundaries, period.
the girlfriend’s problem is a big as mount everest. I say “Run, Aaron, Run”.
April 26th, 2009 at 9:01 am
I agree with others that just jumping into debt consolidation is not going to solve this girl’s issues.
She has to make changes all around to get herself rolling on a path to get out of debt.
Number one is stop giving the unemployed sister money for bills! She should not continue to dig herself deeper while the sis gets a free ride. There are resources out there for the sis to utilize. If the GF wants to be compassionate then do little things like cook a meal now & then for the sis & family.
I think the situation with Dad could be a lost cause, she may get nothing from him, so pay what she can, or work a deal with the creditor & chalk it up to lesson learned. Oh and make sure that account is closed if it is not already.
Basically Aaron needs to tread lightly, because he is probably not going to change the family dynamics here.
He should not enable the situation by forking over any money.
April 26th, 2009 at 3:20 pm
My husband and I used Consumer Credit Counseling (By Design, a non profit org here in CA) when we couldn’t keep up with the minimum payments on our cards. We are now completely debt free. It took a few years. Our credit scores definitely took a hit because we had to close accounts we’d had open for a long time and a bunch of closed credit accounts doesn’t score well. Our scores weren’t horrible, though, coming off the plan, and they’ve managed to recover a bit more. We felt it was a small price to pay in light of being debt free and the peace of mind being on the plan gave us. The scores will continue to improve, given time.
We didn’t want to be in debt for years and years, which we would have been if we hadn’t gone with CCCS. Now, my husband has been laid off, but we are surviving okay on his UI, freelance work and a little help from our emergency fund, which we would NOT be if we were still paying down that awful debt. And we would be, if we hadn’t used CCCS. So it’s been for the best.
It worked great for us. Mileage varies, I know.
April 27th, 2009 at 7:24 am
The first thing that came to mind when I read this is that SHE has to want to fix her problems. He should broach the subject with her, but if he pushes, then it will likely drive a wedge between them. He should encourage her to open up to him (to reveal the full picture), and he should offer his support (emotional), but other than that, you can’t change a person.
I’m very wary of these debt consolidation/credit counselling services. I guess my take on it is if you made the mess, you get out of it. There’s no such thing as a free lunch. I’m paying off my debt the old fashioned way. I’ve heard many horror stories about these “get out of debt easier” services.
April 27th, 2009 at 3:20 pm
My xbf had some serious financial problems and was hesitant to disclose them. It wasn’t because he didn’t want help. It was because he was ashamed of being in that situation at his age (mid 30s).
I spent a lot of time reasurring him and sharing my own spending decisions/investment/debt reduction plans with him as a way to teach him a more productive decision making process. Eventually he realized that I was not going to judge him and opened up.
Maybe Aaron’s girlfriend is like my xbf and is just afraid to admit how “stupid” she’s been or, in her case, “weak” and unable to say no to her family. Encouragement, emotional support and just someone to help her sort things out logically might be most of what she needs. She might also need someone to show her a different way to look at her finances.
I sat with my xbf when he called his credit card companies and negotiated a lower rate. They closed the account, dropped the rate from 24% to 2.5% (if I remember correctly) and put him on a 5 year repayment plan. Then we sat down and listed all his expenses. He was the one to decide what was going to stay and what was going to go. He got into the habit of calling me for advice when he was thinking about buying something new. He really just needed to learn new ways of looking at his finances and making sound decisions. He also needed frequent reassurance that none of his friends expected him to live their lifestyle when he was making 1/3 of their salary!
May 28th, 2009 at 5:12 pm
I want to offer my thoughts on an experience I had with a CCCS. I had racked up over $14,000 of credit card debt on three cards by the time I graduated college. I was making $8.50 an hour working part time and was doing all I could to make the minimum payments and keep up with rent. Eventually, the inevitable happened and I couldn’t make my payments one month. With a month of late fees and the automatic 30+% APR after missing the payments my minimum payments topped $1000 each and my total debt topped $18,000. I decided I had no option but to consult a CCCS service.
At first a couple of the services that advertise the “secrets the credit card companies don’t want you to know.” After talking to them and them telling me that I had to have at least 3 months of late payments before they would consider me and promising to cut my amounts owed in half. Fortunately I had enough sense to smell a rat. However, this got me to look at legitimate CCCS companies. I talked with several companies and read as many reviews as possible. I decided to go with a company called American Debt Solutions.
I had already tried to negotiate with the credit card companies but to no avail. American Debt Solutions reviewed my income and debts and helped me work out a budget. I was blessed to have gone from a part time $8.50 job to a full time $40,000 job after I graduated college. On the financial down side, I also got married and went from splitting an apartment with a friend to being the sole provider for both my wife and me (she was in college still). My payment was $450 a month, $415 to the credit card companies and $35 as an administrative fee.
Eventually I got serious about paying off the debt (with the help of Dave Ramsey) and up my payoff amounts. I paid off this debt within two years. After coming out of the service my FICO score went from the low 500s to 650, which is not great but in no way ruined my credit. The bulk of the damage to my score came from the late payments and maxed out cards before I entered the service. The financial service was very helpful and always made payments on time. Although I disliked having to pay an extra $35 for administrative fee for a “non profit” but ultimately it was well worth it.
I would highly recommend American Debt Solutions for anyone facing the self-inflicted Stupid Tax like I had to pay.
June 1st, 2009 at 5:37 pm
We used Consumer Credit Counseling service when my husband lost his job. They were wonderful and we were able to not only continue to pay our bills, but pay off our debt. It has been 13 years and we have not carried a credit card balance since we got out of the hole we were in.
July 21st, 2009 at 4:59 pm
I don’t want to sound spammy, but I came across your post today, and I think that debt consolidation is the right choice for people with more than $10,000 in unsecured debt. Debt settlement or debt consolidation can really reduce the total amount owed and remove the stress for people that are having trouble making their payments. Sometimes you can take a hit to your credit score when you consolidate, but if you can take a load off your shoulders and begin to make your payments, you have a real chance of getting out of debt for good.
December 22nd, 2009 at 9:27 am
Debt consolidation like mentionned is good and bad. Before i could not manage my credit cards, loans, etc… anymore just by making minimum payments i decided to conlidate.
I did not go with a debt consolidation agency at all. Not what i recommend neither. What i did in my case was open a consolidation loan and transfer everything in there and cut out the plastic. Strict repayment plan on my behalf not the banks, within 5 years to repay ASAP.
It was successfull. The only downfall was that it was not looking good on my record at that particular bank because i had a consolidation debt but any other banks saw this as a loan. Especially with the good rates right now, i would take advantage of this, we all know how credit cards companies play the violon and stomps you with their APR rates. If you qualify, go get a consolidation loan from a bank.