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Interesting Situation...

Date: Mon, 06/01/2009 - 11:59

Submitted by nsracing
on Mon, 06/01/2009 - 11:59

Posts: 4 Credits: [Donate]

Total Replies: 8


Long time lurker, first time poster (Hi! :)) looking for some advice...

So I'm in a bad place with credit and looking where to go. I own two properties (primary and a rental) that I've fallen behind on (last payment was 12/1/09) in order to try to do a loan mod with my lenders. Strangely enough, I'm more concerned about the rental than my primary home. More than likely, my primary will go through either a short sale or end up being foreclosed. I have a place to live so I'm not worried about it either way, though. But, it leaves me in an interesting situation with the amount of CC debt that I'm carrying. My Wife and I currently have 11 cards with a total combined balance of $75k - minimum payment of $2k per month. Not terrible, but we basically emptied the savings trying to keep up the mortgage and the cards. We've lowered the mortgage payment by moving to a different property (which is why I'm not concerned about my primary being foreclosed on), but we're still extremely tight - something's gotta give! Obviously, our FICO is in the garbage at this point so going late on some CC's and having them lower my FICO more is the least of my concerns. I just finished reading virtualdeal's post and am ready to start down this road, but have one dilemma... I have two vehicles that are financed and don't know how to approach those... My commute is 80 miles a day and my Wife's is 65 (and she carries our two toddlers with her) so having a good, reliable car is a MUST. There's NO WAY I'm going delinquent with those lenders since I absolutely NEED a vehicle to get me around. With that in mind, will our CC companies even consider dealing with us since we plan on staying current on the vehicles?

Any tips or advice for this newbie?

TIA for your help and time!

me.


What state do you reside? Different laws apply to different states. For example, in the state of North Carolina, you cannot be garnished or have a lien placed on your home. Who are your creditors? Some creditors are more aggressive then others. For example, Citi Financial is a very aggressive creditor and when the words settlement come up they do try to sue.

Pending on who your creditors are and what state you are in settlement might not be a half bad idea. With settlement, you can keep your cars. In a bankrupcy there would be a strong possiblity that you would have to give a car or both cars up. The glaring con about settlement is your credit is impacted quite negatively but if your credit is already bad that really shouldn't matter.

If your house isn't an asset, then threat of placing a lien on it wouldn't matter. Creditors like to sue if assets are availabe but you mentioned you really don't have any on paper. Lawsuits take time and money and really doesn't end up in the favor of creditors especially in today's economy. By no means am I saying you are not going receive a lawsuit. What I am saying though is creditors don't like risk and if the threat of bankrupcy is on the table they know that if they were to take you to court they would have to pay for the expenses even if a judgement is handed down.


lrhall41

Submitted by on Wed, 06/03/2009 - 15:42

( Posts: | Credits: )


See the Do-It-Yourself section on this board: How to settle your debts yourself and simplify your life.

Have you tried the loan mod that is a part of the Stimulus Package? That'll only work for your primary residence.

The vehicles are Secured Debt, settlement only works with unsecured debt. Be cautious about debt settlement, though. I would try a Debt Management program first, ask your creditors about their Hardship programs (I linked to our Do-It-Yourself section on DM also).


lrhall41

Submitted by Chrys Henderson on Sat, 06/06/2009 - 04:12

( Posts: 2538 | Credits: )