Your Questions About How To Pay Off Debt With No Money

Linda asks…

I’m trying to figure out the best way to start investing money and paying off my high debt amount I have.?

I’m 23 years old, I’m trying to gain structure in my finically life. I’m learning the younger you start investing, the better chance to the road of success you will have. My debt adds up to around 13,000 dollars. This is just credit cards, medical bills, a small loan from a relative. My debts and interest rates are as the following: 6000 credit card with no interest untill April of 08. 2200 medical no interest at all making $50 month payment. 2400 to a apartment complex for moving out early, no interest making 100 payment a month. 2200 to a relative who says to take care of other debt then I can repay them. I’m paying the minium on everything except my credit card with 6000balance. I pay the most I can each month to it. How should I go about paying these debts off? Also, i’m curious to what the best way to start investing are with minimal amount to invest? My job offers 401k and match but I don’t know what percent. Should I start with roth ira or what method? Thanks again

richmama answers:

Let’s break it down:

BILLS: Start off by paying as much as you can toward the one bill that has the highest interest rate, even if you’re not presently being charged interest on it. After that bill is paid off, DO NOT reduce the amount of money you’re throwing at the bills — take that extra and put it toward the next bill. Looks like most of your bills have no interest, so pay off the one with the lowest balance first. When that bill is paid off, move on to the next bill with the lowest balance. As you pay the bills off, keep paying the same amount every month toward your bills until they’re all paid off.

INVESTING: Find out about the 401(k) plan your job offers. Some companies match your contributions dollar-for-dollar up to a certain percent (6 percent is the highest I’ve seen) and other companies invest one dollar for every two dollars you contribute up to a certain percent, so once you figure that out set up an allotment from your pay to contribute only enough to have your company contribute the maximum. For example, if your company matches dollar-for-dollar up to 5 percent, have the company allot 5 percent of your income to the 401(k). If you have any money left over that you can invest, put it into a Roth IRA. There are advantages to both, but the biggest advantage to the 401(k) is the fact that employers match funds, so you get more bang for your buck.

Steven asks…

Can we pay off our debt when we have millions of illegal aliens pouring into our country with no jobs for them?

They don’t have jobs and Americans don’t have jobs which means all of these people are going to need more entitlement programs. With companies going to other countries looking for cheaper labor. Where are we going to get the money to pay for all of these new entitlements?

Many of these people are coming here with kids at the same time that people with kids are getting laid off. How are we going to pay this debt?

richmama answers:

The idea is for the illegals to become the next generation of tax payers to fund the entitlement ponzi schemes,

Charles asks…

How pay off all debt in 11 years with no extra $?

There is a mortgage co. in my town that says they can show people with a mortgage and debt how to do this, how to pay off their house and debts with no additional money in 11 years. How do you think they do it?

richmama answers:

Go to their seminar and see. I would imagine that they want you to take out an equity loan to pay off current debt, then advise you to stop using credit. If you pay your mortgage in bi-weekly installments, you’ll pay it down a bit quicker…and of course, they didn’t say it was a 30 year mortgage to begin with. If you had a 15 year mortgage and sold in 11 when the market was high, you’d be able to pay off your mortgage AND make a profit.

James asks…

Creditor threatens to send my account to an Attorney to pay off debt?

I got a letter today from Midland Credit Management, asking for a debt in the amount of $1,181.56. The Debt is from Aspire Visa, a card I used to have .. I could not pay it all off since I lost my job and i’m having trouble finding a new one. I can’t pay off this debt in this amount .. it originally was NOT over $1,000, it was $630. They added on all these late fees / interest when I could not pay over a amount of time. I tried to make small payments, but obviously they didn’t help, it just got larger and larger. The account has been in collections for a while and so, it doesn’t matter how much I pay, it’s still not enough.

They sent me a letter saying:

“This letter is to inform you that Midland Credit Mangement, Inc. Is Considering forwarding this account to an attorney with the intent to initate legal action to settle the debt.

Please call our office immediately at 800-939-2353 to make arrangements to pay this debt and prevent any legal action on your account”

What do I do?? I cannot afford this .. I have absolutely no funds, and there no point in calling telling them that because well, what are they gonna do?

I’ve told them that I can pay it when I get a job, which I am currently looking for, but if the case goes to an attorney, what are they gonna do? even if I will have to go to court, that’s still not going to get them money .. because I don’t have it. I also have no assets, no car, no house, or anything. So what can they do?

I’m really worried. I am still trying to find any job I can, but even if I do, it will take me a while to save up that much money.

Thanks for your help.
oh, and if you’re wondering, i’m posting this from my aunt’s house, I cannot even afford my own internet. LOL
CAN they take me to court though, over this debt??

richmama answers:

Yes, of course they can take you to court over this.

What does that mean? Well, it means you need to go to court and try to work out a payment plan with them. Do NOT just not show up. That is the worst thing you can do.

You can also try to settle this out of court.

You can also demand that they validate the debt.

You can do many things. Research this topic and the topic of credit repair. You do have rights and it will make it a lot easier on you if you know your rights!

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