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I thought this would be a good one to post under - my Mom got herself into debt about 10 years ago - I think it's around $30k now - she honestly believed she'd eventually get it paid off, but it got worse and worse instead of better. She earns a decent salary, but is payment poor - she has nothing to live on after all bills are paid, so she ends up charging more. For years now I think she has felt it was hopeless and made excuses to keep charging more - but kept paying, honestly thinking if she just made her payments it would get paid off. Her friend at work told her about what SHE did - and I am leary. Her friend stopped paying her credit cards - and a few months later the company called her to make a deal - they said if she paid them $5k she would be free and clear (her actual debt was much more than that) - she told them she was sorry, she didn't have $5000 - and a few months later they called back and offered $1000!!

Now my Mom has her wealthy brother involved in this - he wants to help her out (sort of). He has known acqaintances that buy bad debts off companies - and even if they only collect a fraction of the debts, they still make money, in fact they have become millionaires doing this!! He said that the credit card companies have already made their money off her and she has probably more than paid her principle back and then some - she's had credit cards for 30 years (she's only had out of control balances for the last 10). In fact she'd probably be sick if she ever added up all that she's paid in finance charges over the years.

When my Mom tried calling one of her credit card companies they wouldn't lower her interest rates - in fact, they wouldn't even talk to her until she was at least 90days past due. She's been deep in debt but always makes her payments as required. So my uncle has instructed her to stop paying them. Any way you look at it she was facing financial ruin, either bankruptcy, credit counseling, or not paying - any of these alternatives would have resulted in ruining her credit - so she has opted to take his advice and when they get down to an offer of $10k he's going to pay it and she will pay him back. He offered to co-sign on any loans she may need in the future, for example like a car when hers wears out, since her credit will be ruined after this. She will continue to pay utilities, car, insurance, etc.

I was just wondering if anyone knows anything about this because I sure feel there may have been a better way - to save her credit. But, of course, like my uncle said, the last thing my mom needs is credit!
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