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Options for credit card debt?

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Junior Member
What is the name of your state? Texas


My name is Rene, and I’d like to pick your brains for a minute… I looked through some of the older threads, but couldn’t find one that applied to my situation.

I’m 28, and I owe about $26,000 in credit card debt, mostly acquired between 1999 and 2003. There’s about $8,000 on two MBNA cards, whose rates have skyrocketed to 26% and 29%. There’s $13,000 on a Citibank card with a 24% rate, and the rest is on a Bank One card with 22% interest. All of these rates were much lower in the past. I have called the companies; they are unwilling to lower the rate.

Until last summer, I was making progress on the debt. However, I’ve had to take a pay cut after a layoff, so I can only afford to make the minimum payment. Obviously, I’m not exactly making a huge dent in the balances. Through budgeting, I’ve been able to make timely payments, though, so my credit is surprisingly good.

My only other debt is a student loan of about $22,000. Thankfully, the monthly payments are pretty low -- $150 a month. I’m not a homeowner. In fact, I don’t own anything worth more than a few hundred dollars.

Are there any options for me? I’ve heard about these debt assistance companies, but I really don’t trust them. Are any of them legit? How do they make their money? How much do they charge their clients, and for what services? Won’t they laugh in my face when they find out I don’t own a home? A lot of the claims they make seem pretty outlandish.

Please let me know if there’s anything else you’d like to know about my situation. I’ve never been married. My job, while low paying, is very stable. Things aren’t really terrible right now, but when the inevitable unforeseen major expense comes up, I’ll be in big trouble. I’m not using the cards at all; in fact, I haven’t charged anything since July.

I’m getting a second job and moving to a cheaper apartment, but this will give me a few hundred dollars more a month at best. What I really need help with is the debt itself, especially the interest rates.
Bankruptcy seems like overkill, but I’d consider it if it’s a valid option.

Thank you so much in advance for your time.

Debt Guy

Senior Member
There are good debt settlment companies and there are bad ones. The bad ones certainly overshadow the good that can be done.

Just troll the internet if you want to find a bad one.

If you want to find a good one, ask around until you find someone who has been down that path and find out who they used.

My situation is different that yours. I had a business fail and ran up a ton of credit card debt trying to keep it afloat. I was referred by a friend to a particular debt settlement company. I've been working with them for a bit over a year and I've been pleased with their results and responsiveness. I've referred a couple of other people to them and have not had a negative report. Email me at [email protected] if you want more dialogue on my experience.

Now, you have other alternatives also. One, of course, is bankruptcy. Bankruptcy is tough but there is life after bankruptcy.

Whether you decide bankruptcy or some form of settlement, the student loan will probably stay as is. Very few student loans can be discharged in bankruptcy. However, most student loans are very flexible in working with you on deferments.

Another option would be credit counseling. A credit counseling company might be able to renegotiate the interest rates on some of your credit cards. But, if you go this route, call the local United Way office and ask if they have a member agency that does credit counseling. If so, give them a call. If not, ask who they refer consumers to for credit counseling. Stay away from the internet to find a credit counseling company.

Good luck to you.


If you stop paying on the cards the credit card companies will contact you to negotiate. Citi is pretty hardnosed when it comes to negotiations but have been known to go as low as 50%. Others you can start at 20% of the debt and work your way up from there. If they sell the account to a 3rd party debt collector, send the CA a Cease and Desist letter to make them go away.

When you negotiate you want to stipulate that they change any negative marks on your credit report to paid in full or paid as agreed. Make sure you put that in your terms with them and get it in writing.

Glorified loan sharks they are! :mad:
brilliant advice

MamaLuna said:
.......Citi is pretty hardnosed when it comes to negotiations but have been known to go as low as 50%. Others you can start at 20% of the debt and work your way up from there. ....When you negotiate you want to stipulate that they change any negative marks on your credit report to paid in full or paid as agreed. Make sure you put that in your terms with them and get it in writing. ....
I personally got a 33% settlement with Citi on 2 CCs with them totalling 18+ K dollars.

And of coz they removed negative entried on my report. Thet just had to :)

This is one of the best advices I've seen on this site. BE FIRM AND NEGOTIATE!!!!


Senior Member
I agree with all the other advice pretty much. I don't like the debt counseling places. It has a tendancy not to work and they don't do anything you can't do for yourself. Try it yourself. If all else fails, you would also be a good candidate for chapter 7 bankruptcy.


Junior Member
I tried a debt management company a few years ago, and it was a nightmare. I'm sure, however, there are some reputable ones out there somewhere.

I would advise contacting the CC companies to try to negotiate lower rates yourself. When you do so, make it very clear that if they will not work with you, your only other option will be bankruptcy. Hopefully, that will make them more willing to cooperate with you.


I agree with sbbent, try to get your interest rate lowered, you stated your credit is still good, if you explain to them you have fallen into hard times and if you continue with the high interest rates your credit will eventually get ruined and you want to preserve your rating, once that has suffered you will have nothing to lose by filing bankruptcy, they on the other hand have plenty to lose


Senior Member
Unfortunately, as long as you're current the credit card companies have NO incentive to lower your rates or negotiate with you in any way. If you get 3-4 months behind, THEN they'll be more likely to put you on a hardship program, and by then your credit is on its way down the tubes.

The same thing will happen with CCCS and any of these debt negotiation/settlement/managment schemes. Almost all of them are a SCAM. Even CCCS is dirty. CCCS is funded and controlled by .. the credit card companies !! CCCS serves only as another collection vehicle for the credit card companies. The credit card companies call the shots as to who gets on a debt management program and who doesn't. They don't WANT you on a DMP, they lose money !!

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