Advice Needed for Minimizing Small Business Debt

Start with Consumer Credit Counseling. They are a reputable company that has been around for years. Best of luck.

I have to agree with all the Dave Ramsey fans. I can't say enough about him! He is a life saver - common sense, easy to follow and a great speaker. You can listen to his radio show online, you can even download a free daily podcast on iTunes. He has a show every evening on Fox Business as well, from 7-8. It's the same as the radio show. Good luck - I wish you all the best!

I would strongly reccommend that you check out www.daveramsey.com. My husband and I went through his Financial Peace University about 18 months ago and I can't tell you how much it helped. There are classes starting all the time at local churches, but for immediate help you can go to the library and check out his book "Total Money Makeover". Without knowing your specifics I won't venture to offer more advice, but it never hurts to call your credit card company(ies) and ask for a lower rate. Also, whatever the lowest balance due card is should be the targeted one to pay off first - just pay the minimum due on the rest until the smallest is paid off, then roll that payment plus the minimum due to the next one, and so on.

I owned my own business for five years and I do understand how scary it can be. I'll be praying for you and your family!

I would advise you to contact your creditors. You can ask them to lower your rates, but don't stop there. If you have a reasonable amount of money that you can afford to pay them toward the balance, ask them to deal with you. Say you owe $1000, and you have $700 available to pay them NOW...ask them to settle the debt for $700. The worst they can say is no, so don't be afraid to put such an offer on the table. You might even ask them what the smallest amount is that they would accept to pay off the account. You can ask them if they would be willing to close the account and freeze the interest so you can just pay it off without heading closer to bankruptcy. These are things that credit consolidations places will charge you to do for you.

IF you are not behind on payments yet and your credit score is still decent, consider applying for a NEW card with 0% (or close to it) balance transfer offer. Remember that those are introductory offers that don't last long, so pay as much as you can while the rate is low. Once it is expired, consider getting a different card with a low balance transfer offer. If you are still able to qualify for cards with the low offers, take advantage of them to PAY THE DEBT OFF! The other important thing is to of course NOT continue spending money unnecessarily.

On a totally different note, get a part time job to supplement your income while you pay down this debt. This is only temporary...you get to quit when the debt is paid! Put anything extra you earn toward the debt. Keep this goal as your focus and as you see yourself making progress, you'll be encouraged to keep going.

I applaud you for not wanting to file for bankruptcy. Taking responsibility for your actions is admirable. I will be praying for you and your efforts. Last thing...when contacting your creditors, the first person you get may not be able to work with you, so don't hesitate to ask for a supervisor for a better shot. Good luck!

It seems like you've gotten some great advice. Just one more thing to check out and play with your figures on....www.powerpay.org. It doesn't have any special advice, but it let's yoy play with the numbers, and shows you how much you can save with the power down method, which is essentially the same as everyone here suggests, pay off one thing and use that payment as extra on the next one, ect..till its all paid off. It breaks it down by month so you can see which payments go where, and lets you "see" the debt go down, with an end in sight. Motivation!! Plus, it's free!!! It also has powersave and other features for after debt.

I would have to agree with Suzi, I would first call the cards to see about getting a lower interest rate...it can never hurt. Then pick the card with the lowest amount owed and start making more then the minimum payment and once that is paid off move all of that money on to the next one. I have been in your place finacially and I know it can seem hard. It takes a while but it is nice when you can see it start to go away. I wish you the best of luck with it...especially in these types of economic times.

I have never talked with anyone that has had a favorable experience with any of the debt consolidation businesses. Some of them are downright shady and many of them make your credit worse. You have to be desperate and willing to put your credit score in the toilet to work with them.

The big question to me is how much is your business making? All it would take is a start of say 100 extra dollars per month to start chipping away at the debt. The interest rates you pay don't stay as high when you pay above the minimum payment.

I probably shouldn't give advice :) I am addicted to spending money I don't have. I rather like having stuff and I always tell myself I'll pay it off someday. I do pay things off. But before I do I've ran something else up.

The right way to start is pick the card with the smallest balance. Put extra money into it. I like to play a game with myself. I'll go online 1-2 days per week and pay 20-40 dollars towards that card. That works well for me because I get paid small amounts of money often by my daycare clients. The sooner I get rid of it, the better chance I won't spend it. So every dime goes in the bank. I rarely spend cash. I like to be able to go back on my cards and analyze my spending.

Last year I paid off about 800 dollars on my firestone card and I had it as high as 1200 at a couple of points in the last 3 years. But then I needed to spend more than 500 recently on tires and maintenance. I've already paid 2 60 dollar payments and since the balance is around 400, I plan to knock that baby out asap. Once that card is paid off, then the same money can be shuttled to another and another. It's the spending I have a hard time stopping myself from doing.

If your business isn't doing well enough to make extra payments you may need to address that first. What type of business is it?

Suzi

Something my hubby and I did...
He owned an 18 wheeler and things were going great, he had the engine overhauled and 2 months later it blew up while in Minnesota, it was warrantied by the first company...3 weeks later while in Denver, it blew up again, the second company was responsible for it and they refused to pay it. Needless to say, we did not have the money to pay the ticket or to wait for the 2nd company to pay. So he gave the truck and trailer back to the bank...we still had a lot of credit card debt from living while truck was being fixed.
So we went to Beneficial and had them combine all of the credit cards and a few other small bills to make them one...we closed the cards, and instead of paying on credit cards that are always going to have a consistent finance and interest charge, we now see an end...Beneficial turned it into a 5 year note with an end in site...just a suggestion!

* Call your credit cards and request a lower fixed interest rate. Since you have a great credit score, I am assuming that you have never been late on a payment. Usually, rates (for good consumers) can be lowered just by asking. ;)

* Pay more than your minimum payment and ALWAYS check your monthly finance charge.

*See if you can transfer your debt to a low fixed rate term for the life of the loan so that you won't have to renegotiate you terms every few months. Just NEVER make a late payment.

*Set a goal of payments and figure out how long it will take you to repay this debt. Chart this and watch your progress.

Best Wishes!

I'm going through a Dave Ramsey course right now. I would suggest looking into his books and his way of doing things. If you can find a place where they're having classes, that would be great. After last night's class I'm totally stoked about getting rid of our debt and I'm ready to hit it HEAD ON!!

You go girl. Best wishes to find your mom. Good for you to start a business!
Credit cards can be addictive and I know it takes money to start a business. Do you have any retirement saved? Is it possible to use it and pay yourself back? We have one that is set up to give yourself a loan and in turn pay yourself back in interest. That way you can pay off credit cards with interest immediately. If possible pay yourself the loan interest to save instead of someone else.

If you are only making your operating expenses you may have to opt for another job or have to get out of the business.
You need to make profit sometime. Unfortunately, many businesses go out and it takes many times to get it right.

Next question, House vs. renting? Cut your expenses as much as possible, that means no cable, no getting hair done etc. Cut your budget the best you can. Really look to see what you can actually do without. Good luck and best wishes!

M....you are not the only one that has tried to get a business off the ground with credit cards, but as we all usually find out...credit cards are not the way to go unless you can guarantee you business will be making good money in a short time. We had to consolidate our credit cards and are using Cambridge Credit Counseling. There was an ad for it in Today's Christian Women. They basically get together w/ all of your credit card companies and most agree to lower your interest rate to a much more reasonable one. Then you make a monthly payment that is usually easier to do. Depending on your debt load is, you can pay them off in 5-10 years. We had about $18,000 of credit card debt...we got behind and then the interest was horrible. Now we pay $400 a month included in that is their $5 per card charge for using their services. The part that most people shy away from is that you have to totally close those accounts and not open any more credit card accounts (I think until you are done paying that off). Our debt will be gone in 5 years! You didn't say if you were behind or not yet or if you just have really high interest rates because the introductory rate had expired. For either case, this should help you. If you already have a home and a vehicle, I'm not sure why you care so much about your credit score. This lowers it some in the beginning because they don't like you closing the accounts, but consistently being able to pay the payment increases it over the long term. I wouldn't recommend bankruptcy. Pay your bills, you racked them up. But I do feel for you...we foolishly used our credit cards too. Remember credit cards are not there to help people, they are there to earn an enormous profit.
Cambridge Creidt Counseling Corp.
67 Hunt St,
Agawam, MA 01001
Phone: 800-527-7595,
Fax: 800-757-0159
Hope this helps! J.

Dave Ramsey, definitely. It will be a tough go but well worth it. As he says, "Beans and rice, rice and beans. And you better never see the inside of a restaurant." Get his book and read it cover to cover.

It's amazing how fast debt can pile up. I married into debt and it's taken us three years to get out of it. You can do it.

If you have a good credit score, you may ba able to get a loan to consolidate your debt on Prosper. http://www.prosper.com/ My husband and I got a 3 yr loan for them last year. The website gives you all of the info you need if you are interested. I found it was easier to pay one bill every month rather than many. Good luck!!! NEVERMIND-JUST WENT TO THIER WEBSITE AND THEY ARE NOT DOING ANY MORE LOANS FOR AN UNSPECIFIED AMOUNT OF TIME. SORRY-

Hi M.,

I wish you the best of luck in finding your mother. I've been trying to locate my dad for several years now and it can be very frustrating.

As far as the debt issue, been there and done that! We were in way over $25,000 in unsecured debt....caused from remodeling our old victorian home and many other things. What we did was find some 0% interest credit cards and did balance transfers. This saved a ton in interest and the minimum payment was lower (in case of a bad month you can resort to that), but we made bigger payments which made everything go towards principal. I put these cards away and that's where they stay. If you get tempted, put them in a safe deposit box or something which makes it more of a hassle to ge to. Also, my husband started working more overtime for a while so we could both pay off this debt and pay cash for remodeling expenses. And, from time to time I just had to "wait" to do or get a particular thing towards the remodeling and decorating expenses. I hope this helps. It takes time, patience and dicipline...but it was a great reward a couple years later when we did it without filing bankruptch which I did not want to do because I always had good credit before. Now, our credit is back up there and I'm relieved. Best of luck to you and if you have any other ideas, please share....both in the debt dept and locating lost family members. I'm sure there's a lot of mom's out there feeling the same pain.

God bless....V.

Have you tried calling the credit card companies and letting them know what's going on. Believe it or not, they don't want you to file bankruptcy either. There are things you can negotiate with them without bringing your credit score down. You can ask for a lower interest rate or a real payback schedule. When my husband lost his job a few years ago I went to my bank and got an unsecured loan (fixed rate and payback, like a car loan) to pay off all of our debts. The loan payment was lower than one of our credit card payments and we chose 5 years to pay it back, but you can go longer or shorter than that.

Don't fret and congrats on going out on a limb to make your own future and job security!

www.daveramsey.com this is all the direction you'll need.

Cheapskatemonthly.com is a very good place to get advice and how to pay off your debt.

As you have business Credit Cards, I don't know if this answer will help you.

My sister (she suggested this Service to me) used Consumer Credit Counseling Service (CCCS) Agency: http://www.cccsstl.org/ I used the Service late 90s/early 00s, and it took me four years to pay off my debt.

It is non-profit, did not try to 'pull' anything, talked w/the CC companies, lowered the interest rates, made a monthly payment that worked for me that I paid to the Service each month. Then the Service distributed the payment to the CC companies. But you HAVE TO AGREE NOT to use CC during the counseling. You MUST MAKE THAT PAYMENT on time each month.

The Service did ask for me to make a service fee payment, but it was optional, I simply stated it would not fit in the budget at the time. And the fee was waived. ~L.

I agree with Lisa, go to www.daveramsey.com and find out where a Financial Peace University is being held in your area. He has a no-nonsense, common sense approach to getting out of debt and staying out of debt. He was a successful small business owner in his early 20s and ended up squandering it all and went bankrupt. He pulled himself back together and now at the age of 48 is very well off.
Good luck M..

I want to put in my vote for Dave Ramsey. I took his class over the summer and loved it!! What you'll end up doing is creating a budget, and any dollar that you don't have an exact purpose for goes toward your debt. From what you said, you sound like the type of person who could take his ideas and really make them work for you. Definitely check it out!!

I feel so bad for you, trying to start and keep a business running in this economy. Have you tried the debt services that are around now. I understand they can negotiate a settlement with the credit card company to make paying it off easier and affordable for you. I hear the commercials on the radio and tv all the time, and I'm sure you can find them on the internet under consumer credit counciling. Good luck to you, I hope you can get the help you need.