I've had a couple of people ask me about my cc debt and how I am paying it off, so here's a breakdown.

I am on a payment plan with a credit solutions company. This is how it works: They settle my cc debt for me so I have a specific amount I have to pay off to each CC (I have 3 under the plan). When a credit card company agrees to settle my debt, it is for a specific amount. I have to give them that amount up front, all at once. Based on my debt when I enter then plan, I will have to pay about $7,200 in debt. I am on a plan where I am required to put $200 a month into my savings so at the end of 36 months (3 years) I have the $7,200 I need to pay off the debt and be out of cc debt. However, the quicker I save that $7,200 the quicker I get out of debt.

Right now I have one CC I have already settled. It's total is around $2,400. I am making 4 payments of about $700 each for 4 months and then that will be paid off and I only have 2 more cc's to settle. The extra $100 you see me paying in my debt tally each month to come to that $800 is the $100 monthly fee I am paying the credit solutions company who is doing the legal work for me.

It sounds confusing, but it works out to after 3 years, and about $7,200 all my cc debt plus the fee the company charges will be paid off, versus about $12,000 in credit card debt that I pay on my own with late fees, finance charges, and wicked high monthly payments. Yup, you read that right. As part of the plan I am in, I have no finance charges. Plus I have legally signed power of attorney concerning these accounts over to the company so I do not have to deal with credit card companies and collection agencies calling/writing me. Anytime something like that comes to me or someone calls me I let the company know and their lawyers talk to the creditors on my behalf.

It's a great plan. I feel so much less stress knowing I am paying off my cc debt but at the same time not having to deal with $500 monthly payments and finance cahrges. Plus I don't have to stress witht he creditors calling me becasue legally, they can't talk about this with me; they have to go through the credit solutions company.

I know there are some things that could go wrong, but from where I was befiore, this is such a better option. Plus, although my credit rating will show that I settled my debt, it actually rates better than bankrupcy or failure to pay at all. So within about 3 years, my cc debt will be gone, and in about another 2-5 years after that, my credit will be really good again.

So, to answer a question that started this long ramble, ( Are you saving up the whole amount or paying off in intervals like monthly?) I have a minimum savings of $200 a month, but anything extra I get I try to put into that cc/savings account so I can pay it off quicker.