Your Questions About Lower Debt

John asks…

Where can a consumer find a letter to mail to a debtor to initate a negotiation for a lower debt settlement ?

Such as a letter to settle with a debtor for a lower amount to get out of debt thanks
Couldn’t find one on dogpile.

richmama answers:

I don’t know about templates, but you can find tons of free advice and info on http://www.bills.com on every aspect of debt help.

Ruth asks…

Badly in debt, need to know what option will damage credit the least, but lower debt the most?

My friend is badly in debt, and she is looking into credit counceling, consolidating, etc… She wants to know what option will harm her credit the least, or for the least amount of time, but lower/ negotiate her debt so she pays teh samllest percentage of her debt as possible. Please help, as she is a mom of 2, with a deadbeat dad that ran out on them.

richmama answers:

You have 3 choices: 1- BK 2- counseling/renegotiating 3- consolidate/bite the bullet and pay.

1- BK – devastating. Not just to credit, but in principle as well. You can get your credit back in 2 years if you plan well.

2- counseling – some bad, some good. Your credit will take a hit, and many lenders look at credit renegotiation (what the “counselors” do) as a “BK Lite” Since your creditor is taking less than a full payoff (a loss) they don’t like it very much.

3- consolidate – the best options are usually the most expensive. You want pay your bills off if at all possible. Try to make this work first before you move on the the other options.

Good luck!

Betty asks…

First time Home Buyer- which is better a lower debt ratio or bigger down payment?

When buying your first home, with a great credit score, which is better- a lower debt to income ratio (which is already below 38%) or a larger down payment. Not sure if I should keep overpaying bills or start saving more!

richmama answers:

Keep overpaying, but maybe not as much. Save the rest. The bigger your downpayment is, the less you have to finance. The less you have to finance, the less interest you will have to pay.

Nancy asks…

What is the best way to lower credit card debt?

I owe about $1,000 something on my credit card. Whenever, I pay it off, it always seems to stay at the same balance. What do you think I should do to help me lower that debt? Thank you! 🙂

richmama answers:

Well you sound like you’re only paying the minimum. For starters, if you’ve always paid on time, try calling the credit card company and see if you can lower the interest rate. That will help you pay if off faster. Then try your best to pay MORe than the minimum payment. $1,000 isn’t really that bad compared to some people, so this won’t be too hard I promise. 🙂

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