The credit card debt is from a business startup that has significant revenue delays, $150,000 and holding since December 09. We have learned how to not spend anything on unnecessaries and live a below minimum lifestyle. Are there debt consolidators that would take this on for us?

Scott March 16 2010 11:39 PM

I think the advice is fairly sound. Yes, there are circumstances where the debt consolidation may be beneficial. I have one card at 33.9 and another at 25.9%. I'd much rather pay a little longer at 8%. But I have too much "revolving debt" to qualify for debt consolidation. :( But the point I think Dave is trying to make is that people who think this is a quick and easy fix are usually the ones that will end up back in the hole for the same they started with- or more. Having consolidated once years ago for 13,000 in credit debt, I can now agree (with 21,000 in credit debt!). So it takes some major changes in habits, not just finding the easy fix. Every situation is different. But the one thing that remains the same is that if you keep doing what you've always done- you'll always get the same thing! So for anything to be beneficial the habits and mind set MUST change.

Tricia March 15 2010 7:39 PM

What do you do when you can barely make the minimum payments and your credit card companies will not help you unless you are 2-3 months behind?? And you are trying to save your credit? You can't start the snowball with no money to get ahead. Without our credit card debt we would be fine.....Debt consolidation doesn't sound so bad if it will help us lower our monthy payment so we can get ahead since the card companies won't talk to us about lowering anything unless we are behind in payments.

bb March 15 2010 11:58 AM

This program is not Bogus. Dave Ramsey is a solid individual who has been working hard to help individuals who will listen to him for many years. He has given back so much to so many over the years through excellent guidance and common sense. Its hard work to separate behavior from the day to day dilemma and shame that comes with debt. Snowball is the metaphor for simply paying down the smallest debt amount first while maintaining the higher amount cards. As each debt is paid down the payments are rolled into the next higher card on the list. The emotional success from paying down the smaller cards (and closing them) is the key. That is why budgeting is so important and getting to work on attacking the debt by doing whatever it takes no matter how embarrassing it may make you feel. It works but don't expect it to be easy. Remmember a statement from the inventor of the computer mouse. "Sucess is sometimes measured on how much embarrassment you are willing to endure." No one laughs at the invention or the inventor of the little mouse you are using possibly at this very moment. Don't give up and know that Mr. Ramsey's recommendations are sound and his data is accurate. Before calling his information bogus, do yourself a favor and learn the history of what he has accomplished and stop listening to others who are broke. He was fighting credit card abuses before Obama ever thought about being an organizer.

Jon March 11 2010 3:26 AM

I disagree. Consolidating our two credit cards (with 21% and 16% interest)into a 5% loan not only saved us tons of money, but we paid everything off faster.

Megan March 10 2010 1:30 PM

Diane, be very careful about corporate turnaround claims. Sounds great, but over 40 state attorneys have filed complaints on companies like theirs, which is another name for CCCS. Our company got into unfortunate debt after 90% loss of sales and employee theft of customers, and we hired them to take care of problems. They promised much and delivered nothing. Amazingly, their claim was that we would never owe more than we already owed, but would at max only owe what we owe now and could file bankruptcy if their program did not work, but they assured us they have always worked. If you look at their site, they advertise no need for legal help, but all their advice is legal and often wrong. They caused one of our debts to double through the courts and when we asked for them to solve the problem, they started trying to backtrack from their promise. We finally got a lawyer involved and he did a much better job of settling the problem. Corporate Turnaround wanted to charge us fees for their bad advice and wrong legal "suggestions", and since they took our money upfront on a "monthly basis", they have all the purse strings to do what they want now. This letter from the 40 attorney general offices might help to avoid the same problems we ended up having with corporate turnaround lack of delivering on promises http://www.ftc.gov/os/comments/tsrdebtrelief/543670-00192.pdf

Rene March 08 2010 12:42 PM

I work for an Attorneys office that try to collect debt voluntarily or involuntarily; CCCS companies are vultures and its a scam just talk to the creditors chances are they will bend over backwards and set you up on arrangements. Creditors and agencies would rather take a small monthly payment then no money at all - and be responsible putting them on notice or sending in a cease or desist will only strenghten their resolve to recooperate their loses any way possible.

Mike March 03 2010 6:28 PM

CCC offered me 0.99% interest and would be albe to pay off credit care in five years. They would have to close the card and it would do against my credit score. Please advise your opinion

kelly March 02 2010 12:25 AM

I am overwelmed with credit card debit and i have not been using the cards for over a year. But the banks have raised the interest rate to over 25% which makes it impossible for me to pay over the minimum payment and now this month I will have trouble even making the minimum. I called the bank and they tell me if I fall behind a payment I can call, they will close the account and put me on a payment plan at 9.9%. It sounds too good to be true but I am tempted. Wish I knew what to do. I hate the thought of being behind a payment. Wish I knew if they were telling me the truth.

Jen February 24 2010 8:15 PM

I have $120,000 in credit card debt and would like to also know how to get the snowball rolling when I can barely make the minimum payments. I would like some more information on negotiating the debt. I was ready to go to a debt consolidation company.

Sam February 24 2010 6:26 PM

my husband at the start of the year we were going to start paying off some credit cards and he has studet loans well we did our taxes and said we won't be paying off anyone right now we got a good amount back just what we probly was hoping.i knew with him this was'nt going to be easy but sometimes i think he's going to far,we basically cut out going out to dinner twice a week with 4 of us was $35 each time were only going to the store once a week.he is a teacher and was going out to mcdonald's everyday with the other teachers but they started giong once a week, we'll that did'nt last long they started going close to everyday again. he will tell me one thing not to do this or that but then he's out doing the oppisite witch is spending money.i guess i'm saying he has a way of making everthing worse than it relly is. lets just say if it's his idea no problem,but if i do or ask forget it.

kristin February 22 2010 10:49 AM

I can't handle a $60G CC 5 items owed. I need help. I understand not to go to the debt consolidator. What is a snowball and how does it works? How can I negotiate the the CC to reduce amount I owed?

LLL February 21 2010 10:13 PM

I have $22,000 in credit card debt. The interest rates are at 10% and 14%. I pay $250 on each every month...and now apply $250 extra on the debt with the lowest balance (they are about the same amount). A friend recommended that if I transferred the debt to a low/zero interest credit card and continued to make the same payments, I would save several thousand dollars per year...thus paying off the debt earlier. I know there is typically a transfer charge...and that some of the offers are for a limited time only. What else amd I missing? My husband and I are focused on paying the debt off as soon as possible (we have paid $650 extra in the last 2 months!) Should we stick with what we are doing or try ot find better rates? Sounds great...but know there must be a catch.

karen February 19 2010 12:10 PM

This sounds completely bogus. When I was younger I made very bad debt decisions and they have stuck with me. This probably works for working pros, but as for people who are at the lower end of the income totem pole - this is absolutely ridiculous. Debt consolidation may mean paying longer, but it also means more immediate money to save with.

Ken February 14 2010 7:52 PM

I am new and want to start the Dave's Baby steps. I am overwhelmed in credit card debit and I am starting to fall behind in my payments. I want more then ever to get out of this debit and live a debit free life. I know that 1,0000.00 emergency fund is very important and I am not even close to getting that amount, so how far should I let my credit card payments go behind.

Beth February 12 2010 12:31 PM

Seems the problem with loan consolidation is that it extends your time to paying off the debt. Is it possible to setup the loan consolidation so that it's length can be determined by you (keeping the total payment amount unchanged)? Putting a bunch of payments into one takes a lot of stress out of managing money.

Jason February 11 2010 5:01 PM

My husband and I have our mortgage, two credit cards with large debt. one, Overdraft protection(supposedly) not knowlegeable of all fees is now at 7,200(11.00%)and one at 18.600.00(interest is 8.00%) We have attempted to negotiate these, with no success. We have kept payments current and have good credit still, just debt overload.We bought a home for our daughter and 4 kids to live in and that payment is 350.00 monthly. We drive two paid for cars, both have over 200,000 miles believe it or not, (but needing one newer car)We are surviving with cost of things increasing. I was in school but quit to go to work. our payments for these two cc are 650.00 monthly.which avenue would you suggest? If a cc company negotiates w/ you , we were told we would pay taxes on the amount they erased. Like we recieved income! Help!!:)So, there is really no benefit to negotiating .

Kim February 10 2010 5:46 PM

I have several accounts that are now in 3rd party debt collections. What is the best way, if any, to negotiate with these companies?

Don February 04 2010 4:55 PM

What is the scoop on UScreditrelief.com I am supposed to speak with them on Wed 2/3/10 Any help you can give will be greatly appreciated T. Andrews

Theodore Andrews February 02 2010 6:31 PM

I have credit card debt, i did take the Dave Ramsey class, but i still do not understand how the snowball debt works. i have only been able to make min. payments on the credit cards. Now my husband has been out of work for 2 months and the min. payments i can't make this month. If i don't make the min payments they will charge over the limit fees and late payment and raise my interest, how do you avoid those chges and make the snowball work?

perez February 01 2010 8:45 PM

I understand why debt consolidation would not work for credit card debit. However, I am wondering about it for medical bills. My son and his wife have accumulated several thousand dollars in medical bills due to emergency surgery after they were both laid off from their jobs. He is currently in the Armed Forces and they have insurance now, but are really struggling to get out from under the debt accumulated from the surgery and subsequent medical care. (3 different hospitals in 3 different states). Under these circumstances, would you go to someone who can maybe help negotiate a smaller settlement and see if they can get smaller payments?

Robin January 28 2010 10:19 PM

Wow, these are some serious horror stories! I owe $37,000 in credit cards myself (around 90% of it from wifey!). Well, I've heard before that debt consolidation was a scam, but never really knew why. I'll just make a suggestion relating to the example above in the article. Maybe I'm missing something here, but debt consolidation sounds good to me because it seems like a person could take that extra $460 and pay it towards the principle which would seemingly pay the debt off very fast. The extra 2 yrs on the loan would be insignificant.

Chad January 28 2010 7:55 AM

Everyone urges us to save our money and stop our ridiculous spending habits. This article suggests 'Total Money Makeover' is the real solution. Maybe this country needs a financial makeover- reduce taxes, eliminate corruption, re asses present laws and reduce government spending. How many trillions of dollars of debt can one country get? Well if someone could work at correcting all of the REAL problems then maybe we (the consumer) could all afford to use our own cash to go on vacations.

Mike January 25 2010 12:51 PM

Hello, My husband is an S corp in the health care field. The corp owes close to $230K in unsecured debt and 55K on a building and equip. loan (secured) that is in the last year of pmt. We had a huge drop in 2009, $125K in collections. Of course in CA we are also upside down in our home and have lost a huge chunk in retirement> NOT GOOD at all. WE are in contact with a debt reduction co. called Corporate Turnaround who states that the can (Try) reduce the unsecured debt down to around 42% of the amount owed, about 96,600 and they would charge 35% of the amount reduced or saved. 35% of 133,400 lets say would be around 46,700 for a total pay out of 143,290.00. They will want a monthly pmt. of 4575.00 per month, 2% of the original amt. owed, until the approximate 143,300.00 is pd off which be my math skills would be close to 32 months. Of course are credit will be hit, and so far our credit score is 780. We are not, as yet behind in any pmts. We are seriously considering this because in our area (Calif) things are going to get worse and we will never be debt fee let alone be able to retire. What would you advise? And, yes I am taking your Financial University course This month but unless our overall debt is reduced we will never be able to get ahead. My husband is a well respected in the health care field and we went into debt after a fire.

Diane January 14 2010 1:58 PM

hI dAVE, MY HUSBAND AN I WENT THRU YOUR PROGRAM AND IT WAS THE BEST THING THAT COULD HAVE HAPPEN TO US. AFTER TAKEING YOU CLASS TO INCURRED A FEW SET BACKS. FRIST HE HAD A TRUCK ACCIDENT WITH HIS BIG TRUCK(SELF EMPLOYED). SECOND IT TOOK US 3 MONTHS FOR REPAIRS AND ADDITIONAL 3 TO FIND ANOTHER CONTRACT. IN THE MEAN TIME WE LOST OUR CREDIT & SAVINGS(2 MONTHS INCOME). I LOST MY JOB 3 MONTHS AFTER HE LOST HIS, I'M CURRENTLY ON UNEMPLOYMENT. EVERYTHING IS DUE. WE START THE SNOWBALL QND ITS WORKING, HOWEVER EVERYTHING IS DUE. IF I TURN TO DEBT CONSOLIDATION THEY WILL BE ABLE TO GET RID OF THE INTEREST AND CUT THE BILL IN HALF. I FEEL IN THREE MONTHS I WILL BE ABLE TO MAKE DOUBLE PAYMENTS AND GET RID OF THIS BILL IN A 8 MONTH PERIOD OF TIME. IS THIS A TRAP I'M PUTTING MYSELF INTO OR IS IT A GOOD PLAN? AT THE END

JOYCE January 07 2010 3:21 PM

I told my daughter I wanted her to wait a year before going to college and saving some money first. I have a small college fund for her (single adoptive mom) and my son (also adopted). My friends sent their kids off to expensive four year colleges strapping themselves financially but looking at me like I was crazy. After a semester of not being in college and visiting friends at college my daughter is much more focused and taking personal charge of what she is doing. She is committed to getting through college with no debt. Even though she hasn't found much of a job yet it is exciting to know she will not be depressed after graduation but excited about her opportunities. My nephew is switching from his expensive christian college because he sees the debt he is accumulating. My parents were never able to help me either but I am grateful I switched to a state university and, by the way, had great christian fellowship (better than the christian college I attended for one year) and a great education to boot without swamping myself with debt. Thanks Dave for your amazing information that has changed my adoptive family tree. Bless you.

Sonja January 07 2010 12:58 PM

Dave, Thank you I was just about to consolidate my credit card bills after reading your truth about consolidation I decided against it. I am not a person who spends friviously, I had a few financial set backs that was beyond my control and now that situation has been resolved and I am working full time again.

msjersey January 07 2010 8:32 AM

I enjoy reading everyones commments. I think our biggest problem is spending too much and a lack of income. My husband lost his job almost two years ago in March. I had gone back to work for a while to help make ends meet when he was still working as a programmer. He was making good money, but yet we always seemed to be going backwards. Then we started a vending business. I wanted to start slow but he wanted a big business. So we bought 8 brand new vending machines and the company we bought them from helped us get them placed, but the places we put them in were not bringing in enough income to make our payments. I met a couple who was looking to down scale on their business and offered to let us buy half of their business, well i thought we needed their business just to make our bills. It was fine till my husband decided to buy a few more machines and completely maxed us out on our loans. Then we had a few of them brake down adding to our expenses. We used our discover card for buying products, and i was paying that off in full, only used it to get the cash back, but then my husband lost his job, i had quit mine to do vending full time. so now their was no household income and all we had to live on was a retirement account and and unemployment check. Then my husband got involved in Primerica and has not made more than a $1000.00 in the past year. He went and got us all cell phones, which we could not pay for. My husband and i are clearly not on the same page with money, i've talked to him till i'm blue in the face and he just does not get it that you cannot spend more than you are bringing in. Now we have lost the business to the bank. I am working as a school bus driver and my income is not very steady, we are paid a min. of 4 hours a day, but i need more of a full time job. When holidays come around and summer, i do not make anything. Our retirement is completely gone, we have over $115,000 in debt with our credit cards and house and Equity loan and over draft fees that my husband keeps aquiring. I have taken out my own account am trying to set aside a savings. We caught up on 4 house payments this month, with some unepmloyment and cashing out my sons investments that were set up by their grandparents. My husband is looking a bit harder for a job. But even if he gets a job, i do not know how to curb his spending. He still thinks we need cell phones for his primerica business, that is not bringing in any money. I do need at least on phone while i'm on the bus or for when they need to call me, but i could get by with a track phone and a home phone. Right now all 4 of us have a phone and we were locked in this plan for two years, our two years is up and he still wants to upgrade to a new phone, that will help him with his business, but the fee will be an additional $29.00, when we are already paying $159.00 a month. I have been told to get rid of the internet and he does not want to do that, it comes in handy for me as well when i'm looking at bank accounts and trying to mangage the money. Anyway, i agree with the paying cash and am trying to at least pay my house and utilities. I don't know how to address this phone issue or all my other bills. All my check is really paying for is food and gas and groc. I try to give a little to church. We desperately need his old income back and need to get on the same page with our finances. Any suggestions.

Mary January 02 2010 8:49 AM

I just discovered your Total Money Makeover book. I am doing a home loan modification with my mortgage company that will lower my payments from $500 a month to $400 a month for the life of the loan. It will not extend the loan at all and all past due charges will be dropped. As part of this loan modification they are demanding that I go to a HUD approved financial counselor (I have chosen consumer credit counseling). I have $40,000 remaining on my home, $9200 on my vehicle and $10,000 in Credit card debt. I am recently divorced and want to do the debt snowball plan on my own, but how if the mortgage company demands I do counseling?

Steph December 28 2009 9:59 AM

I think it's so important to cover the risks first-- that means emergency savings, property insurance with low deductibles, life insurance, health insurance, long term care, etc. When I feel satisfied that my risks are covered, then I pay down short-term debts aggressively. Retirement and other long term goals are put on hold unless there's an employer match. One example which could have been a financial disaster for me if I had not covered my risks-- while commuting home from work in November 2009, I got into an accident swerving into a chain link fence to avoid the car in front of me. Luckily I had changed from a $2,000 deductible to a $250 deductible with $20 a day car rental in September 2009 when I got my promotion. If I hadn't done that, I would have been pushed to the brink of bankruptcy and had to take a demotion because I no longer had a car. $250 was a little dent in my finances but I was able to manage it much better than $2,000 plus $200 it cost for a rental car.

espresso1980 December 28 2009 3:47 AM

My problem comes from having my ex-husband leaving me with a house I couldn't afford. I sold the house and the money is tied up in escrow until the divorce is finalize - which is being held up by him. On top of that, he doesn't pay his child support. In the meantime, I have to cover all the debt I incurred when he left trying to keep a roof over our heads until the house sold and covering childcare. I'm swamped in debt and have stopped using my credit cards - that is until I need oil for heat. I am in the red each month if he doesn't pay his support for the kids. How do I get around this issue?

Shannon December 22 2009 9:46 PM

It's important to keep in mind that anything a debt consolidation company can do for you, as far as reducing the amount owed or extending the payment terms, you can do for yourself. It takes some strength but if you follow a debt snowball and create a budget that is within your means, you can call and negotiate amounts that fit what you can afford. Don't let debt consolidation companies add to your debt, you can negotiate lower amounts and payments with minimal credit impact if you stick to your guns and have a plan.

Dave December 22 2009 8:06 AM

I am so worried. My husband just finished retiring from the military in Apr of this year and we still haven't heard anything from the VA and he hasn't found a job yet. We thought he would have a job and the VA would respond before we had our son in nov. We were given everything and I bought everything early, so our children are okay, but all of our bills are due now and they are severly behind. I fear we may loose things. I am truly confused...I thought making one payment would be easier than several different ones. Please help us figure out how to get on track and find the best answer for our bills. Thank you for your time. Your input would be most appreciated.

Bridgette December 19 2009 4:20 AM

I'm so confused. I don't know what to do. I have $38,000 in credit card debt and I'm the only one working. My husband lost his job back in September and I can't manage the minimums on the credit cards, the house payment, utilities, etc. This is my biggest fear...I'm an insurance agent and I have to maintain a good credit score in order to keep my job. Since I'm in a position of "Trust", my company demands that my credit is trust worthy. I'm thinking about a consolidation loan because then I could manage that payment until my husband finds another job. What do I do? Thanks

Jan December 17 2009 5:45 PM

I have accumulated 60,000 in debt for my new business and want to try the snowball but I can't make the the minimum payments for all 6 cards and pay anything off. I would have to pay less to somebody to start knocking some debt down. Is there a way to do this debt consolidation on my own. After all, those companies have you pay them while your accounts go delinquent. If I do it on my own how do I get my creditors to settle with me? Need clarity

cc December 15 2009 11:43 PM

This is missing if the debt consoldation company reduces the amount that is owed. Say someone owes $30,000, and the company can get the credit card company to reduce the amount you owe to $6,000. Wouldn't that make sense. The credit card company would be taking a $24,000 loss against the principle.

Ted December 09 2009 1:40 PM

We used a home equity loan to pay off $25,00 in debt. We thought it would help. Now we owe that $255 payment every month and we are back in debt bigtime. I am now doing the debt snowball method and although I have not yet paid off my smallest bill, I know that it will be paid off this month. I had rationalized this because I was a stay at home mom and we were just bound to be in debt, but really, most of it came from "emergencies" that were not really emergencies. Foolishness. Now I am working part time and making about $400 a week, 100% of that is going on debt. We are not using any of it as income. Our income will come when the debt is gone. Then we will have over $1,100 a month left over out of my husband's pay, plus all of mine. That will be our freedom. You can't imagine how hard it is to not use this new income for Christmas. Praying for strength.

Jan November 27 2009 11:25 AM

Thats a great idea if you have loans, but if what your debt isn't from loans? My 10,000$ in debt is all from doctor bills. Under insured, complicated pregnancy. We don't qualify for medicad and I can't keep on top of the bills. Getting my SEVEN montly doctors bills into one payment would make a huge difference in my life right now.

Lynn November 23 2009 4:33 AM

One additional consequence of debt consolidation is that it reduces your ability to perform the debt snowball, at least it would appear that way. If all your debt were to be rolled into one payment, you would not have smaller debts to pay off, thereby reducing your payments each time, allowing you to roll more of your income into the next debt. It appears to me that once these debts are consolidated, it would take you longer to get out of debt than if you just took care of it via the debt snowball.

wds November 18 2009 7:19 AM

I just recently came across your program. It is so nice to have validation of my beliefs. My wife and I were married 20 + years ago. Multiple people in both of our families had gone through bankruptcy. We decided when we got married to never make decisions that could jeopardize our financial security. We used the following principles: 1. Pay the Lord first. We have always paid a full and honest 10% tithe. This has brought us countless blessings. 2. Live within the rest. We have bought older cars and then saved to buy the next one. When going through college my wife would scour the ads and specials, plan our meals and go to the store knowing exactly how much she was going to spend. We didn't buy new clothes until our old ones were worn out. We lived in small cramped apartments until we were stable enough to buy a house. Last week we paid off our motgage. What a great feeling to not owe a dime to anyone! Looking back both of us have never felt we did without. Thanks for spreading this important message. Hopefully people will continue to listen. The peace and security of being debt free is indescribable.

Richard Ott October 25 2009 10:24 AM

Your article focuses mainly around people who voluntarily go into debt with credit cards and the like. I chose to put my school tuition on loans because I wanted a good education from a Christian University and my parents were unable to help me pay it at all. I am now reaching the end of my grace period on my loan, and have to find a way to lower the interest rates and consolidate it so that I can have one due date and one bill each month. I am already working three jobs, and my husband works a full time position and he has his own school debts. Can you please address this issue? I am at a loss.

Beth October 15 2009 3:42 PM