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At the beginning of the process

Date: Thu, 08/04/2011 - 11:34
Submitted by mediamavericks on Thu, 08/04/2011 - 11:34
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I have finally come to grips that we are no longer able to keep up with our min. mo. credit card payments. We're falling behind at the rate of $1500 a mo. in what we owe in total bills. We have been dipping in to our Retirement account to make ends meet every couple of months and retain our current good credit score, and we are almost out of money.

Before that happens, I would like to try to settle with the cc companies for a portion of what we owe.

My question is do I just stop paying them all together and wait a certain period? or call them and let them know I can no longer pay the minimum amount every month? What should be my plan of action?

Thanks so much for your help!


You 3 options:
1) call them and see if they will lower your payments and interest rate.
2) get a debt consolidation loan (since you have good credit) and pay them off. Perhaps a home equity with a low interest rate.
3) in order to settle, you will have to default on your payments. This will drastically affect your credit score. You will have to save up the money to settle.


Submitted by aubrey on Thu, 08/04/2011 - 11:49

aubrey

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Thanks for your quick response Aubrey. I have just recently refinanced our home and with our declining property values in our state there is no equity in our home.

One question though..... Which process will result in a lower credit card score, filing for Bankruptcy or not paying the credit cards and attempting to settle our debt for less? I think if we can settle our balances for 30 to 50% of the balance, we might just have enough left in our IRA's to do that. However, if we file for Chapter 13 say, then can we possibly retain our IRA amount left?

< 1) call them and see if they will lower your payments and interest rate.
2) get a debt consolidation loan (since you have good credit) and pay them off. Perhaps a home equity with a low interest rate.
3) in order to settle, you will have to default on your payments. This will drastically affect your credit score. You will have to save up the money to settle. >>


Submitted by mediamavericks on Thu, 08/04/2011 - 13:02

mediamavericks

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