Does anyone have any creative solutions to get out from under credit card debt? I have investigated a few of these for friends of mine and the companyies make the assumption that the person has other assets to put one the line. Since I do not now too many people who have not found themselves behind the 8-ball as it relates to this, How do others get out from under the debt?

I was in that situation about 15 years ago and it took me about 10 years before I was able to pay everything off va home equity loans (creating debt to pay off debt... nasty business but worked for me). Not alot of fun, but I needed to to keep my sanity. I now see many advertizements for services that will work with the credit card companies to (a) reduce the interest rates, and (b) forgive some of the principle. Has anyone gone this route, and what has been your experience? Would you recommend this to others? What is the downside?

Never, but never use a commercial company that says, "We'll reduce your payments to a manageable level each month." It means you just refinance your debt and keep paying for that much longer, incurring more interest charges over time.

All Citizens' Advice Bureaux have a debt management service. Contact the nearest one to make an appointment to see a debt counsellor. They help with making an assessment of income and outgoings, making a budget as well as writing letters to creditors to reduce payments to a manageable level. And it's free!

Of course the attage of "If it seems to good to be true, it probably is" applies here. My advice to my buddy was that the first thing he needed to do was cut up his cards. I'm cannot credibly preach to anyone about sticking to a budget ( I've tried and cannot... or should I say will not) but he really needs to. I feel bad that this has happened to him. However, it took 15 years for him to dig this hole, it'll probably take that long to get out...it did me!

I know he's embarassed to go to a credit counselor for help. I've looked around on the web for sites that offer help/advice, but wasn't too impressed with what I found.

I guess I will be of more help to him once I win the lottery!

Thanks for the info!!

I have a spreadsheet that gives an example of the Pyramid Payment Plan. If you can handle a MS Excel file, you can email me at erwingoodwin@yahoo.com. Subject: Pyramid Payment Please.

The other option is to use "Consumer Credit Counseling Service", a not-for-profit agency. They contact the credit card companies and make the arrangements for an affordable payment. CCCS handles the payment (for a very small monthly fee of about $35). They are often able to get interest rates reduced significantly. They do not guarantee what they can do for you until they have contacted the credit card companies. My partner, Randy, was of $27,000 in credit card debts after his divorce. The ensuing depression left him unable to think about payments or making arrangements for over 9 months (until he met me ). CCCS was able to make headway with the credit card companies where we could not. Now we get a monthly statement detailing the application of the payments and resulting decreasing balance.

Part 2 of this is a separate checking account. Randy has an alottment of his automatic payroll deposit that goes into this separate account. CCCS then has an automatic draw against the account. This way we never have to think about the payment or worry about budgeting for it.

Erwin Goodwin
Sarasota, FL