Posted on October 21, 2009 at 11:41 am I have been looking for others in my situation, but have not found many people. Here's the deal: I am married. My husband has a mortgage ($1220) in his name and no other debt than two car payments totaling $570. He brings home $2700 a month (after taxes & 401k). I, on the other hand, have nearly 40k in cc debt and am planning on attending grad school next year. I work part-time because I have a baby. Leaving her in day care is not yet an option -- I would definitely have more money if I worked full-time. My net income is about $1400 a month. When I start grad school, I cannot work at all. The program is 2 years full time. After grad school, I will probably start out making about $4,000 net per month (Physician Assistant). I had surgery this year and that is a huge tax deduction. I am expecting about $12,000 back on my taxes. I also have a combined $7,000 in other money, most of which is my daughter's we saved for her (she just turned one). I don't want to spend her money, but I see no other option. So I have about $19,000 I can put toward my debt or save for grad school. The problem with grad school is that Stafford loans are not enough to cover tuition and living expenses. So I need the Graduate PLUS loans, which is credit based (but not debt-to-income based...you just can't have any dings on your credit, which I don't). I just have way too much debt. Should I save this money that I'm getting back and just make minimum payments until I make it through grad school? My cc interest rates are around 5% except for one (stupid Citibank just hiked my rate from 5.9% to 14.9% even though I made no late payments). I am going to need all the loans I can get and if I do debt settlement or credit counseling, I don't think I will be able to get the Graduate PLUS loan. I'm just not sure what to do. I would love to just settle and wipe out my debt, but I'm not sure that's the most fitting for my situation since I need school loans that are credit-score based. I hate the idea of making minimum payments, but because the interest rates are so low, it would actually pay off a lot of principle too. What should I do? Thanks in advance, Shannon

Posted on March 4, 2010 at 3:11 am Hi ShannoN! That's a tough situation you're in - anyway,  I, on the other hand, have nearly 40k in cc debt -, that amount of debt qualifies for a settlement. You mentioned that you have about $19,000 that you could apply to the debt - and that sounds perfect for a debt negotiation program.

Posted on March 4, 2010 at 3:53 am I agree - debt settlement will attempt to pull your balance down tomore or less half. So your $40k has a chance of being pulled downto $20. If you already have $19 - that's a really great news. Some peopledon't even have that much at the start of the program. The settlement companyusually oversees their savings using an escrow account or their own savings accountuntil they've saved enough to use for negotiation.

Posted on March 4, 2010 at 3:58 am That $19k is the clincher. Your husband wouldn't even have to help out with debt settlement.He can help out with grad school though. How's your husband's credit standing?

Posted on March 4, 2010 at 5:39 am You say “I would love to just settle and wipe out my debt, but I'm not sure that's the most fitting for my situation since I need school loans that are credit-score based” then neither debt settlement nor consolidation is an option as both will definitely have a negative effect on your credit score. The implications are Consolidation will show up on your credit report similar to a chapter 13 BK AND TO DO Debt Settlement your accounts must become delinquent and guess how that shows up on your credit report. “I am expecting about $12,000 back on my taxes. I also have a combined $7,000 in other money, most of which is my daughter's we saved for her (she just turned one). I don't want to spend her money, but I see no other option. So I have about $19,000 I can put toward my debt or save for grad school”. Since you are not behind n any of your payments on any of your CC’s currently you are better off saving this money for school and making your minimum payments on your CC’s for now. The most important thing here is to absolutely for the period of time you are back in school is NOT and I repeat DO NOT continue to use your CC’s for any reason. My advice is unless you absolutely need to consolidate or negotiate settlement on your debt wait until you have to, it seems to me schooling is a bigger priority right now and if you can manage both with the money you have coming in I see no need for any type of debt relief, debt management program. Can you find help from friends and famly with school, your debt? That may be a better option, good luck.

Posted on March 4, 2010 at 5:45 am Hello, if you're wondering how much debt settlement is going to cost youit's 15% of your $40k debt (total debt amount - it's spread out over 18 mos.) or 2-25% of the settlementamount. Ask for the company's fee structures if you decide to push through with it.