avoiding a charge off

All I can say is-I know how it feels. We realized last year after being in a similar position, we could no longer do it. We had about 100K in CC debt, cars and a mortgage. We realized even with extra work, OT, etc-we were headed for doom too. We sat down and figured out what we needed to do.

With a lender unwilling to work with us, we ended up short selling our home and moved the family to an apartment where it was cheaper all around. For now this is what we have to do. That is one option if your mortgage is unaffordable OR the lender will not work with you.

We stopped paying our cards the end of December '07. I have not spoken to creditors about any settlement or anything. In April we were receiving settlement offers in the mail. THEY are bringing it up-not us. If you can get funds available-this is an awesome way to get out of debt. Unfortunately for us, we are unable to come up with any funds to settle anytime soon. I am not sure how long creditors will wait for a settlement. It seems they are different with everyone. I know from December until now a few of our accounts have been turned over to collections and they have not mentioned ANY settlement. I am finding the collections agencies more aggressive than the OC. Citi is one of the WORST and already threatening a lawsuit if a settlement can no be reached...soon.

So basically debt settlement is an awesome way to get out of debt BUT there is no guarantee you will be able to settle or not get sued, etc. And yes, they do not want to settle unless you are behind on your payments.

Hope any of this helped. Good luck.

I started with $135,000 in credit card debt back in December, 2007, I'm down to $22,000 right now, I borrowed money from my retirement, received money from family and sold personal possessions and I have settled with BOA at 38%, Chase at 45%, Citi at 38% and Discover at 50%. I just have two cards left and hope to be done with them by the end of the month. It has been very stressful, but I negotiated all my settlements at about 120 days delinquent. I had to sit down when this all began and I had to figure out how I would come up with about 50% of what I owed in six months. If you have no way to come up with that kind of money, you are in danger of getting sued or really making a much bigger mess. I would recommend going to a bankruptcy attorney and check all your options if debt settlement doesn't look like it would work for you.

Thanks for the advice! Actually, our lender (on our first mortgage; we also have a second) has been very helpful. They put us on a 36 month hardship program that will save us about $600 a month. That's the only way that we are even able to make our mortgage paymnents. And bankruptcy is an option at this point, of course, but we are really trying to avoid it if possible. One of our fears is that since we do earn occasional overtime, and my husband has occasional side income, they will put is in Chapter 13, and then the court will control our lives for the next five years--and there is never any guarantee that our small amount of extra income will continue! Also, we do feel a moral obligation to pay our debts and would like to at least pay part of what we owe. But since it's pretty doubtful that we will be able to come up with enough funds to settle with everyone before our accounts are turned to CAs, I was hoping that there might be some way to delay that. Thanks again!

I have been in the same type of situation i was 30,000 in debt and had lost my job
my unemployment only covered my rent with little left over i was sued by my creditors i was very skeptical about using any company for help but i ended up having no choice i went through a debt help program with a company named S F F there web site is w w w . state farms financial . o r g they have debt programs that help people in financial hardship im not sure about any other places but i spoke to a mike there and then a barbara and they gave me a bunch of options that really helped me and my daughter until i got back on track i hope this helps

It is possible to settle on your own, but a settlement company may be able to do a little better than you could on your own. Just be sure to do a very thorough check on any company or bankruptcy attorney you are thinking about going with.

Thanks everyone! I appreciate the SFF information; I hadn't heard of them before. I'm leaning towards the idea of trying to settle on my own because I'd like to save the fees that a settlement company will charge, but I haven't ruled anything out!

debt consolidation can be good solution for you...the benefits of debt consolidation are

1.Lower Monthly payments
2.Improve your credit
3.End to creditor harassment calls
4.One Monthly payment
5.End to Late & over-limit fees
6.Reduce Interest rates -

All the best

Actually, since we have no money left over after paying our mortgages and our modest basic living expenses (except for occasionally when we get overtime or side work income), I don't think we would be able to qualify for debt consolidation. Is that what is offered through consumer credit counseling? I have spoken with two different agencies regarding credit counseling, and they both told me that since we don't have sufficient income to pay our creditors they couldn't help us. They recommended a BK attorney, but we are really trying to avoid that. Has anyone had any success at getting OCs to keep your accounts in house? I'm hoping to avoid having the accounts sent to CAs until I can scrape together enough money to start negotiating settlements, which will probably not be soon since our extra income is not regular.

Alias - I am sorry to hear about your struggles. Since you say that "after paying our mortgages and our modest basic living expenses," it sounds like you have no room to spare (financially speaking). Occassional overtime is a bonus, but not one you can count on to live.

May I suggest that you speak with a debt consolidation counselor? They will assess your situation and offer some suggestions. (I have a feeling though that you might want to consider talking to (at least 2 different) bankruptcy attorneys also.) By talking to a debt consolidation counselor AND a BK attorney, you now become armed with information to make and informed decision on how best to proceed in your given situation.

Oops, I see that you wrote that you already talked to 2 DCC and they both couldn't help you. Talk to BK attorneys.

With $140,000 in CC debt, it will be difficult to live if you are living paycheck-to-paycheck.

Best to you. :)

Desperetly is giving all of you sound advice. Explore all your options and then make a decision based on your particular situation. This site is here to help people get out of debt! There is free counseling available as an option above also. You will still be in the same place 20 years form today if you don't make a plan now!

Frogpatch - you are sooo right (about being in the same place 20 years from now). Sometimes it is difficult to take that first step (admitting defeat), but sometimes you have to lose a battle in order to win the war!

Thanks, everyone for the great advice! I just discovered this site a few days ago, and it is so wonderful to know that I am not the only one struggling to pay my debts. And it's great to be able to ask questions of people who have "been there and done that." I appreciate all of the great advice! I am still soaking everything in and trying to decide how best to approach our situation. I did send hardship letters to all of our creditors before we stopped paying them. Unfortunately, we don't qualify for any of their hardship programs because we can't make the "minimum" required hardship payment!

what is short selling your home anyway???im stoopid sorry

Pert-you are not "stoopid" lol. I didn't know what it was until we were told that it was our only option when it came time to sell our house. It is when the lender accepts less than what is owed on your house. You can't just say "I want to short sell my house". Usually you will need to show a hardship, etc. There are all kinds of situations that cause people to "short sell" their homes but that is generally what it is. Last year when we were trying to sell-not too many people knew about it but now it is a lot more common. Gosh-I could write a book on it I learned so much from the experience. But that explains it more or less.