I received email from Dave:

subject: I needed some money fast…
“I had no savings to my name and I was applying for a better job. However, I had no suit to wear for the interview. That’s when I turned to Payday Loan to get a few hundred bucks to buy a suit at the mall. I feel it is partly because of them I got the job. I quickly paid them back and recommend them to anyone who needs money fast.”

Some info about payday loans

Payday loans are a necessity to cover emergencies when you do not want to pile more debt on your credit cards and not make the mistake of borrowing from family members. Suppose you need some money for a party and presents for your only child. You are a bit short until the next check. There would be no crime in taking out loans and pay the loans back promptly. The high interest rate would not really affect you because you will be paying the loan back when it is due and in a timely fashion.

Cars are complex and tend to break down on occasion. Instead of putting the repair bill on your credit card, you would be wise to get one of the guaranteed cash advances – to pay your mechanic. If you had no available car and were constantly late for work, you might be fired, especially in these hard economic times. Similarly if you have a utility bill that you forgot to set money aside for, short-term payday loans can meet this challenge.

If you have a bank account and a salary, loan can be obtained within a few hours. There should be no shame attached to getting this loan, we all run short of cash on occasion. Be disciplined and pay back your debd within 1 or 2 pay periods or whenever the loan is due. Try not to get an extension, for this tends to be expensive and defeats the purpose of the original loan.

The opponents of any credits attack them for having high interest rates. The credit card companies also have high rates and they are compounded over a long period of time. The problem is that the opponents do not want any competition so they attack the companies that offer payday loans. As long as you borrow a small amount of money for a very short period of time, there will be no problems. Most loans are made by responsible companies who make this known to the borrowers right from the beginning. Nothing is hidden and all questions by the borrowers are answered honestly by responsible companies that make payday loans.

My sister is looking for Debt Counseling suggestions

Long story short, my sister and her husband have maxed out three credit cards to the tune of $35K and are now only able to make the minimum payments and it is stressing them out.

They have some modest money in investments but do not want to touch their “nest egg” tosolve this problem. She has asked me to help her research options, mainly debt counseling. She would like to find an honest counseling service that would help her with debt reduction – hoping to pay only some fraction of the amout instead of 100 percent.

Can anyone here give her a path that make sense? She would love to have actual company names and phone numbers to get it started. Any personal experience would be most welcome. She is in the Los Angeles / Orange County area.

Thanks for the info on Greenpath, we will look into it, it sounds like
a good option.

I recommend you either negotiate directly with your creditors or hire a
debt settlement company. One I am involved in that I think is honest is hhs.gov and they are located in Texas.

When I lived in Orange County I also had a similar problem and found
this place.

They gave me an honest assessment (they couldn’t help me) and some
good tips for saving money so we could put more towards debt. There’s
lots of places out there, but she should start with non-profit credit
counseling agencies, I think, before paying for any kind of service.
It seems like people have had mixed results, and you have to research
places carefully. Tell your sister good luck!

I am the original sender of the message, asking for help for my
sister. I just called Total Debt Services in Plano Texas and educated
myself a bit.

Here is a thumbnail of what I learned:
Based on my sisters situation, she owes three cards $35, 000

  1. Sign up with the “company”
  2. Open a special bank account, with the companies help.
  3. close the credit cards in question
  4. let the acccount go into default
  5. let the account go to a collection agency
  6. my sister’s FICO score will go into the toilet, for a few years
  7. start making monthly payments into the special bank account
  8. the “company” will start to have talks with the credit cards
  9. the company will establish a settlement with credit cards
  10. with the clients approval the company will take money out of special
    account and pay settlement
  11. some years later my sister’s FICO score will improve

Maybe I forgot some of the steps but that is close.
Credit cards will not settle for less money until you can no longer
make payments, then they might expect that they will settle for less
money instead of none.
A friend of mine says that some credit cards will sue the holder of
the card for the debt.

Hope that helps.

Let me know if you want more info

Re: my situation and request that anyone with any advice…

I generally don’t post a lot, but wanted to share what has been helping me do better financially. First, let me congratulate you for the efforts you are making to turn things around. Sounds like you have made a start, and that is the hardest part! Keep your support system going–glad to see you have a counselor working with you. That will help keep you accountable until you are back on your feet.

Get yourself set up with a Dave Ramsey Financial Peace University course! I am taking one through a local church. He talks about how to pay creditors and get out of messes, and his program WORKS. He will give you hope and help you rediscover your integrity if you stick with it. You can buy his kit (13 weeks of lessons) but it doesn’t have the videos, just an audio version of the course. I wish it had the videos as they help solidify the information in my mind. It cost $96 but was worth every penny.

You sound like a good candidate for chapter 7 bankruptcy but it will be
on your credit report for 10 years. First off, congrats on taking solid steps to pull out of a terribly  difficult situation. I’m sure you’ll get lots of great advice on debt here, so I wanted to address your furniture needs.

I don’t know where you’re located, but my advice on furnishing your place is to look on Freecycle and Craigslist. Using both, you can probably find everything you need at an affordable price. And don’t worry — the place doesn’t have to be perfect from day one. Start with an essential here, an essential there.

And talk to people at church or in your community if you don’t go to
church. Most people have furniture they don’t really need but would love to lend or give to you so they have the warm fuzzies of helping a person in need.The biggest thing I’ve learned is to let go of my pride. Suze Orman said recently that having debt doesn’t make you a bad person–it just makes you bad with money. And that’s a skill so it’s correctable. Ask people for help; they’ll come through for you.

Don’t forget about thrift stores and pawnshops. Near where I live there’s a pawnshop that opened a second store just to deal with furniture. Also check out auctions. My best couch came from an auction and even though it had a broken leg it worked fine and only cost a dollar. Sometimes furniture sells good and other times you can pick up things dirt cheap. Check out yard sales and moving sales as well. A lot of times if people are moving they decide to get rid of furniture instead of moving it all to the new place. I know someone who bought a kitchen table that was all banged up with paint and other stains on the top. He cleaned it, sanded it down smooth, and refinished it and nobody would ever know it started out looking a whole lot worse.

If you are making 62K then you should be able to structure the paying
off of the debts based on importance such as truck then get going on the cards. Check into getting the cards refinanced into lower rates.

You can absolutely try to work a deal with the collection agent. Knowing that they purchased your debt(s) for pennies on the dollar, it certainly worth hurt trying to negotiate it down. Looking at your debt numbers, they certainly are not hopeless. If you make it known to the debt agent that you are doing your absolute best to pay them what you agree upon, they’ll work with you. DO NOT ALLOW them to intimidate you though. If they try to make you commit to something you cannot do, let them know that – but be firm that you will do all you can. Make it known that you have a payment plan in place (you should, at least) and you have prioritized it amongst all you creditors. Keep at it and do not give up!