Debt consolidation companies

Hi guys,

My girlfriend has a bit of credit card debt, not too bad, but she's the nervous type, so I'm keen to help her out of it so I can continue living a quiet life... I was suggesting to her that she should try looking for a 'debt consolidation' company, you know, those ones who take on your debt, then you pay less monthly but for a longer period. She had never heard of this before - so...do these companies exist in germany? Does any one have a company they could recommend?

Thanks for your help

She'd be better off going to debt counselling.
If the debt isn't that huge, she could consider transferring to a lower rate method of borrowing such as DiBa's Dispokredit, RBS Kredit or similar as these have a monthly payment at lower rates than most credit cards.
Thing is, she'd have to have the discipline to not run up more debt on the cards. And that is hard to do, especially without advice.
Debt counselling services

What Katrina said.

Plus, those debt consoldiation companies are fucking vultures. DON'T go near 'em!
All the best for getting it sorted.

and what about if some of the debt is a bank loan? Many thanks for replies so far

The debt consolidation companies (in the UK at least) charge a considerably higher rate of interest than banks do for their loans. I can't see any benefit transferring a debt from a bank to a debt consolidation company.

Your girlfriend should have a hunt around for a bank loan with a low interest rate and use that to pay off debts with a higher interest rate, such as credit cards. That's effectively the same as what a debt consolidation company does.

The best thing to do is pay the debt off as quickly as possible, not stretch it out over a greater time period. I accept that her personal finances may not allow this, but she should be strict with her finances. And cut up the credit cards.

PS. Are these debts all in Germany?

The debt counselling will be able to negociate payments that she can make. Think about it: is the answer to debt more debt?
Debt consolidation companies might look cheap, you're only really seeing a low monthly rate but that's because you might be paying it off for 3+ times as long and with tons of charges. It is a false economy.
And they also don't solve the real problem - why did she get into debt in the first place.
Now some debt may be easier to change into a lower APR (annual percentage rate) scheme depending on her credit rating but it is a lot better to solve the actual problem than the symptoms.

NOTE: not all debt is bad, as mortages are also debts

consolidate all her debts into one bank loan and then cut up any credit cards. The bank should give a better rate than debt consolidation companies I think

At the end of the day debt is debt. Unless you do a runner or go bankrupt it has to be paid off. Debt consolidation is simply the act of consolidating debts with high repayments or interest levels into on or more other debts with a lower rate of interest and/or a longer period of pay-off.

Simply total up all the debts irrespective from where and note the effective interest rate being charged. Look for a loan to cover the debt total on a lower interest rate over a longer period of time with regular payments that are commensurate with available spare cash after paying to live...

Concentrate on the debts with the highest interest ie credit cards.
Once the card(s) are cleared change over to paying the whole ammount monthly.
If you NEED to borrow, then get a bank loan.

Also need to look at your lifestyle. Maybe cancel that long distance holiday and go for a long weekend to the Bodensee instead? Skip the cocktails for a €2.50 Helles etc.

And don't forget those critical bills such as rent, electric, gas etc.
If she can draw up some kind of budget listing her income and outgoings, this will help.
Don't forget to include insurance policies, GEZ (if she pays), car, travel tickets...
If she doesn't know how much she spends, it could be worth running a budget book for a week or month and collecting all receipts so that you can see exactly how much those coffees with pals or the magazine bought because she missed the bus etc. add up to. It can be a real shock.

I was in a lot of debt a few years ago, which all came to a head when the bank refused to transfer my rent (I'd maxed out my overdraft limit and my credit card).
I went and talked to the bank, got it all converted to a bank loan, and paid them off month by month. They sat down with me and worked out all my income and outgoings etc, and we figured out how much I could realistically afford to pay back per month. They were really good (it was Citibank).
It took me just over two years, and it was an immense relief to get rid of it.

I really think this is the best way, I would definitely recommend it.

As Monkstown says, the best bet is to couple it with a lifestyle change.
I could have taken longer to pay it off, but the rent thingy got me really scared, so for the two years I hardly went out at all. We used to invite friends over for meals, and friends would invite us over. No holidays, living on the basics, that kind of thing. But if you say that the debt is not too bad then you probably wouldn't have to be quite so drastic. Lucky for her that she has you to support her through it