Any company that tells you that can settle your debts is lying. Do not pay any of them money.

If you are totally lost and don't know where to turn, please check out http://nfcc.org/ It is the national foundation for credit counseling. Follow the links to no/low cost certified counselors in your area.

As for advice, you didn't give enough info in your post. Do you and your husband have jobs? If so, how much do you make. 35k is a mountain if you make 25k/yr but a molehill if you make 250k. Do you own a house/owe a mortgage? Are you giving money to your kids? Can you afford the current monthly payments? Have you talked to your creditors?

I'm glad you asked this. I have asked around myself and so glad we didn't use debt consolidation service. What they do is they tell you they'll take care of your credit card creditors first and once after they collect percentage of what you owed on credit cards. Afterward, collection agencies and creditors come after you, they'll put lien on your house, cars, etc.
Go to bankruptcy lawyers and they will work with you, first consolation is free.
We are in the progress of filing bankruptcy. Shame? We're not... long story, but not ashamed!
If you have any more questions, don't hesitate to ask!

I've included the link and it is helpful!
Good luck...

Here is a link that might be useful: Bankruptcy Informations

Jannie, I think you should be congratulated for wanting to pay down your debts in full. Bill's advice is correct. Find credit counselors through the NFCC website.

Michelle Singletary, who writes for the Washington Post, suggests paying the lowest balance (card) first for a sense of satisfaction, then the next, etc. But FIRST, you will need to contact every company to inform them that you need to work out a payment plan. That's where the credit counselor can help.

I'm sorry about the diseases. Hope your kids are paying their own way through college. They will take studying a lot more seriously if they do (I know from experience.)

Good luck.

Another reason not to do a debt consolidation through one of these firms is that if you do get rid of your debt your credit will stink because the companies are known. Second unless you get credit counseling you will be right back in the financial mess again with a higher interest rate because many of these companies will send you name to some really bad companies that prey on the people the original company cleaned up.

Most of these companies just leave you with one debt at an inflated interest rate which is not getting rid of the debt only postponing.

Now I'm more confused than ever. I'm going to send letters to each of my CC companies, asking them to allow me to pay the debts off. i will ask for a reduction in their interest rate, explain our financial situation, etc. I have also been recommended to attend some DEbtors Anonymous meetings, which I definitely will do. Take it one day at a time.

Jannie - I know debt can be overwhelming, but try not to let it get you down.

Debtors Anonymous is a 12 step program for people with spending problems. From what you posted, that doesn't sound like what your problem is. If you have racked up debts due to poor health, that is entirely different from people who are in debt because they love to buy fancy clothes, new electronics and eat out all the time.

Again, please check out http://nfcc.org/ and find a free counselor in your area. Do this BEFORE you start calling/writing credit card companies. These people will help you create a workable budget and free up some money to pay your debts. They will also give advice on the best way to deal with your creditors. It sounds great if you could get a cc company to cut your interest rate, but that isn't going to help if you can't afford the minimum payments still. What you need is someone to help with the "big picture" before you negotiate all the details. That is the only way you are going to make a plan that you can stick to and that will get you out of your current situation.

BTW - I think it is admirable that you want to pay your debts in full. Please take advantage of counselors who will help you do that. It probably isn't going to be easy and it won't happen overnight, but it is amazing what determined people can accomplish.

I just want to back up what billl has to say!! Take advantage of the credit counseling (a not-for -profit service) before you contact your creditors.

If there is some reason you can't use their service, no matter what, DO NOT use one of those for-profit, advertised companies. They just want to prey on your desperation.

Not a sermon, but stop using the credit cards immediately! That is step one.

Just another vote for billl and raee's advice. I also agree with what colorcrazy quotes about paying the smallest first, then the next smallest. This is what we did and we're getting close, but you need to get the overall picture and plan first like bill says.

www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm

Bill You are right on in your advice, as are others who say cut up your credit cards. Write down everything you spend money on in a month. Your fixed expenses--rent, insurance--etc. you can do nothing about. It's the variable expenses you can cut back on--food, gas, cable,telephone and everything you use your credit card to buy. Set aside what you think you can get by on for each of these.

Talk to your credit card companies about lowering your interest. DON'T pay off the least amount you owe first. Instead pay off the one with the MOST INTEREST. That extra money that you pay in interest will go a long way toward paying down the rest. You can do it!!

Think about it---paying someone to get you out of debt is just adding to your debt so you'll never get out from under.

As much as everyone giving advice to pay off as much as you can. We have done the same thing for four years and finally we just couldn't keep up. With interest rates keep going up in this economy, enough was enough!
We kept the mortgage, vehicle loans, school loans, etc.; the credit card companies were the ones we had to let go of.
Hope this helps, Jannie.
This is where we get our help...

Here is a link that might be useful: JustAskJane

That's a law office. Do you want to pay a lawyer too? They don't even have an 800 phone #! Are you in Colorado?

You've asked for and received good information here. Bill posted the site where you can get help right in your area. And its a good safe place to start. It's interactive and easy to use.

Mona's site is full of info, and safe.

Here is a link that might be useful: National Foundation for Credit Counceling

While I agree with much of what we read on this page, it is not a wise idea to cut up your credit cards. Too much is riding on your credit scores, and those are, to a large extent, a direct result of how much "credit" (which is not at all the same as "debt") that you have. In many cases, if you have a bad credit score you will be unable to rent a house, get a new job, or do some relatively commonplace things in the financial world. Your insurance rates may skyrocket. It could be even worse: in some cases (as, for instance, when you handle the boss's or the clients' money or you have access to sensitive information) you could lose a job you already have. Ruining your credit is a very, very bad idea.

Odds are you have already "done a number" on your credit score, as you have painted the picture. Credit repair and credit enhancement are the two-pronged approach you must follow even before you can effectively pay off your debt. Once you have a handle on your credit scores and reports, you can begin to work powerfully on the debt. You will continue to work on this while you approach your debt, but this must start first.

First, as seen earlier, you must understand how you are using money now. Record every expenditure, no matter how seemingly insignificant, on a small note pad you can keep in your pocket or purse. Do this even for large payments like the mortgage, and for small ones, like the Coke(r) at the Seven-11(tm).

Second, yes, stop using your credit cards for non-essentials. That is not that same as not using them. If they are still open and active, you can profitably use them for anything (like groceries and gasoline) where the vendor will accept them. In fact, once you have gotten your spending habits under control it is essential that you use them like this.

Third, if you have no money left over at the end of the month, or worse, if you have month left over at the end of the money, you will have to cut back on your discretionary spending. That may mean eating beans'n'peanut butter, but, as others have said, there is a limited amount you can do with this approach.

Fourth, you need a better plan than "pay off the highest interest-rate or smallest-debt first". That will work, but it does not work nearly as fast as other methods. And it wastes your financial resources, which are probably in short supply as it is. What that plan might be is so dependent on your specific situation that going further might prove dangerous.

Well, like everyone else, I agree with much of what has been said but of course, as humans, we can't leave it at that and have to put our own 2 cents in :)
You need to figure out a few things about your debt. Is it a matter of you currently have 35k debt that you need to pay off and you aren't adding anything to that debt? If so, then that is great! Work on ways to save every penny you can from your monthly budget to put towards debt.
If you are still adding to the debt, you need to figure out why. Have you been paying for your kid's education or any of their bills? Like someone said earlier, if this is the case, they need to pay those things themselves. If they can't get a student loan, then they can cut back on their school hours, find a job full time, and pay their way through. They can also learn to take own their own insurance and phone bills if they don't already.
And, if you still can't get your head above water, tell them that they will need to start pitching in on the food budget, or even pay you rent if they wish to live at home.
Some may say that is harsh, but what is the best way to prepare a child to grow up and be apart of the real world? The parent pay for everything and bail them out of every problem, then suddenly graduate college and realize they don't know how to budget their own money and end up getting stuck with debt problems or unable to save for anything they want? Or having them pay for the things they want and need while under the protection and guidance of their parents so that when they graduate and/or get married and start their own family, they know how to budget and save money.
So this could be a major thing to look at. You obviously don't want to just kick your kids away and make them think you don't love them, but if they aren't responsible for their own things, you need to start holding them responsible for them.
Also look at other things you could save on. If you have Cable or Dish, perhaps drop them. Most shows can now be watched online, even if it means going to youtube and seeing if anyone put it up.
Perhaps revise the food budget? That's one thing my husband and I have really been working on. I have cut ours in half!
I am unsure of your living conditions or what type of disease you have, but if you are able to, perhaps there are things you could do for a little extra money. Clean the homes of family and friends? Host a garage sale and have all the profit go towards your debt? Are there crafts you can sell (they usually don't bring much money in, but every little bit can help). Perhaps you have a skill or talent you can train people in? If you can find something you can do that will create extra income, do it and discipline yourself that all of that extra income will go towards your debt and can't be spent elsewhere.
If you haven't already, check out various sites about cutting the budget and frugal living and as you apply those tips, use the money saved toward debt.
I have 2 things left to say.
The first is a tip I read about paying off debt.
Write down all the various debts you owe. (To whom, who much the debt for each is, and their minimum payment).
Next, order them from smallest debt to the largest.
Each month, pay the minimum towards each debt, but for the smallest debt, the one listed on the top of your list, pay more. I'll give an example on a small scale. We'll say you owe $ to 3 creditors.
Vista debt: 300 Min: 20
American Express debt: 1000 Min: 50
Master Card debt: 2500 Min: 100
So, you pay the 50 and the 100 to AE and MC, but for Vista, we'll say you managed to get enough extra income to pay 100 a month on it.
So, for the next 3 months you get it paid off (Note, I am not calculating interest, it is not needed to get the basic concept of this).
Once you paid off that Vista, that gives you $100 extra each month that you can then apply to the AE card. So, rather than paying the min 50, you are able to put 150 towards it. Once the AE is paid off, you now have 150 extra in the budget so you add that to the minimum payment you were paying on the MC which means you'll be paying 250 on it each month.
With this method, you can quickly pay off debt and reduce the number of creditors you are paying because rather than spending forever trying to pay off the largest amount, or slowly paying off all at the same time, little by little, you free up money as you finish paying off creditors so you can apply more to other debt.
I hope that tip helps.
The last thing I have to say is short. If you already have bad credit, do not fret about it. You don't want to do anything stupid, obviously, but do not fret about past mistakes. After 7 years, bad records are taken off your credit record. I could be wrong on the 7, it may be slightly more or less, but I believe it is 7 years. I know for bankruptcies, it is 10 years before it is taken off. (But please don't go bankrupt if avoidable because we, the tax payers, as well as yourself assuming you work and pay taxes, end up paying for it through our taxes).
I hope the advise I gave was helpful.