Take Out the Debt

If David stays with the credit counseling, he should do two things to stay on top of his debt snowball.

QUESTION: David, several years ago, got into credit counseling because of his debt. Should he take the remaining debt ($45,000) out of the credit counseling to pay it in the debt snowball? Dave says at this point, the answer is clear.

ANSWER: We run into nightmares with most of these services. It’s not that they’re crooks, they’re just unorganized. If you stay, do two things. Stay on top of them and make sure the bills are paid, and work your debt snowball by sending extra to the smallest debt. The advantage of being in the credit counseling service is you generally get lower interest rates, but the downside is that if you go to purchase a home, you’ll be treated like you’ve filed a Chapter 13 bankruptcy.