Our Situation
We purchased our home here in Florida 3 years ago with a 20% down payment, the value has dropped over 100,000 in that time. My wife and I bring home 3,775 a month and approximately 65% goes toward the monthly mortgage payment. So, in that time, we basically lived off our 2 credit cards to pay for groceries, gas and other bills. Well, we recently maxed out our cards last month, who wouldnt of seen that coming. We have had our cards with Chase for 10 plus years and always paid an APR of 9.99%. Well, since maxing out our cards, they increased our interest rate to 29.99% as of last month! Now we are at the end of the line. The payments have almost doubled to 1,200 for my card and 700 for hers and there is absolutely no way we can now afford to pay those amounts. As of this moment, we are not considered late on the payments, but will be as of this month. Our mortgage on the other hand is now late. We cant afford the credit card payments and the mortgage payment together and have absolutely no money left for living expenses. I am going to see if I can work something out with the mortgage company, but wonder if anybody can provide some advice on how to handle the credit card situation. I was looking into a CCCS that was a non profit organization which charged an initial fee of 25.00 and a monthly fee of 25.00 and should we go with the debt management route or debt settlement route? Oh yes, my credit card balance is 32,316 and hers 19,264, total 51,580. I know selling the house is an option, but we would have to do a short sale and thats a last resort at this time. Thanks for any advice you can offer.
Adding your [late] mortgage payment, [maxed out] credit card bil
Adding your [late] mortgage payment, [maxed out] credit card bills, and other expenses, your DTI is through the roof. CCCS won't help you one bit. Settlement should work well for you because it will free up cash flow but more importantly get you out of paying that herendous interest and out of debt in a relatively quick time frame.
If you decide to do a settlement with them it would give you abo
If you decide to do a settlement with them it would give you about 6 months of no payments and you should be able to get a settlement of around 35%. I would also look into my loan documents on the house to see if the loan is non-recourse and if so you may consider short-sale or foreclosure if you are really backwards on it.
personal info deleted as per TOS - Jason
Wells Fargo has been telling me I should consider a deed in lieu
Wells Fargo has been telling me I should consider a deed in lieu, if I stated that right. Basically, just handing the house over to avoid the foreclosure. They're telling me it's less damaging to my personal credit. Not sure if it is or not. But clearly Wells seems to think it's better off to have the home in hand, than to ask me to try to short-sell. I thought that was odd.
