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Date: Wed, 10/12/2011 - 08:14
Submitted by JBH on Wed, 10/12/2011 - 08:14
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Hello Everybody,
I am very happy to have found this forum. My eyes are burning from scouring the internet for help.
My story is actually very simple compared to many, but I still need some advice.
About 4-5 years ago I was debt free. I worked hard to get out of debt to buy my first house. (PS-I'm 40 years old). Over the last 4-5 years I have accrued about 30,000 in debt with two credit cards. One is a Discover and one is a Visa through my credit union. I have excellent credit and have not made any late payments.
Here is the problem: I am finally backed into a corner. I am a teacher and our pay got cut as they are now taking money out of our salary to pay for our retirement and health insurance, both of which were previously paid for. I am beginning to have to take care of some medical issues and there is just not enough money. Again, I am not late on anything, but now am going to have to be. I was also sent to a different school to teach, much much further away from my house, and gas is killing me. I am at the point where I am not going to have money for food. I refuse to let my mortgage or car payment default. I am not a careless spender at all. In fact a HUGE majority of the credit card debt is due to gas, food, and paying bills with it.
I have already done a TON of work reading on this site and many others.
I just do not know where to start.
I will sincerely appreciate any advice that anyone can offer.

I know I can work this out, but it is very scary!
Thanks again!
JB


As you're unable to pay off your credit card debt, I will suggest you to go for credit card debt consolidation which will make it easier for you to pay off the debt. You can contact your credit card companies on your own and negotiate for the consolidation of the credit card debts. However, if you're not confident enough to consolidate the debts on your own, then you can take the help of a professional debt relief company in order to get rid of the debts.


Submitted by Anna Sweeting on Wed, 10/12/2011 - 20:30

Anna Sweeting

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Hi JBH,

Welcome to the forums :)

Well, I too agree with Anna on this that you need to consolidate the two credit cards that you have. In this way, you will be able to lower the interest rate on the debt and handle the payments easily enough. You can transfer the balance from these two credit cards to a new credit card with the 0% balance transfer offer or from one card into another with low interest rate.

I think this will be of dome help. However, after the balance transfer d not close down the credit cards immediately. Otherwise, you will end up hurting your credit. Another thing is that, if possible you can try to make some extra money through the online or offline money making options.

Thanks,

Marvel Becks


Submitted by marvelbecks on Wed, 10/12/2011 - 21:01

marvelbecks

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Quote:

Well... contacting the credit card companies and asking them for an affordable payment plan won't hurt your credit scores in any way. Rather, if they agree to your request, you will be able to get an affordable payment plan to pay off your debt.


Excuse me?? Anything but paying according to the cardholder agreement can and will hurt your score. Asking for lower payments will shut down your credit limit and possibly the card plus any other notation they will place on the credit report.


Submitted by SOAPLADY on Fri, 10/14/2011 - 05:19

SOAPLADY

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Hi JB,

What are the interest rates on the cards currently?
Calculate 2.1 percent of the totals and that will be close to the monthly payment plan amount the creditors will offer or that a credit counselor will be able to secure for you in a debt management plan.

That monthly amount will be what you will pay for 4-5 years. If you are skeptical you will be bale to maintain that monthly payment, do not engage in the repayment plan. Missing a payment on one of these plans will end the benefits and you will be back to where you started and will have wasted the resources and time.

If you cannot meet the monthly payment next speak with an experienced bankruptcy attorney about your options and qualifications in a chapter 7 where your unsecured debts can be discharged. If you qualify for chapter 7 you may be able to reconfirm your car loan and keep it, mortgage payments and keep the house etc. If you can file chapter 7, but it will force the sale and liquidation of items that could be sold outside of BK and used to pay down the balance to an affordable level, or used to settle the debts for less than the balance, thinkg about settlement.

If you cannot qualify for a 7 and would only be able to file a chapter 13, think about settlement.

Discover trends for settlement generally hover around 40% of the balance and they do like lump sum payment when settling prior to charge off. If settling after charge off you may find term settlements available depending on where the account lands. You may also find the account placed with an attorney.....

Credit Unions are a different animal. Who is the CU?
Smaller and regional CU's sometimes will not settle. Others will at 70 to 80% of balance. Sometimes settlements with local CU's have to be approved by the CU board during regular meetings (really small CU's).

Some of the larger CU's will settle similar to the national banks and most of what you review on this site will apply.

If you can answer the questions above and also reply with the balances on each account and the state you live in I may be able to respond with additional details for consideration.

Best of Success!


Submitted by MichaelBovee on Mon, 10/24/2011 - 06:12

MichaelBovee

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