How to reconcile when debt consolidation paid cards directly?


I got a loan to consolidate my credit cards from a credit agency. They paid my credit cards directly. No money touched my checking account until they sent me the little bit that was was left.

Now that the payments went through, the credit cards appear in YNAB as paid but it's telling me I'm over-budgeted by several thousand dollars. 

How do I reconcile this when the cards were not paid by me directly? 


Any help would be appreciated.

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  • Enter an inflow to the cards with a payee “debt consolidation company.” Same for the inflow to the checking. 

    Any money left in the credit card payment categories should be moved to your highest priority, which is probably either paying down the consolidation loan or funding your true expenses so that you don’t have to take on debt for them going forward. 

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  • I'd say: create a new debt account in your budget, namely the "consolidation loan debt". Start with a $0 balance. Then move money from there to the credit cards (the consolidation debt now goes in the negative, which is correct). Plus move that little bit of money that went to your checking account from the consolidation debt as well. If the transactions were already imported automatically, I hope you can recharacterize where they came from - they were not "income", they were a transfer from one debt to the other.

    If all is well, now you will have the current debt amounts in all the credit cards and on the consolidation debt.

    Of course, in your budget you will want to create a category for repaying the consolidation debt; and you will want to budget for that too, of course.

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