Where do I start?
Have my first child hopefully on the way and need to address my situation.
Last fall I was practically debt free - always had some cc debt so felt relieved that one Citi Card in my wife's name with an 8K balance was the only debt (unsecured) remaining and none was charged off or settled, etc...
We were not saving anything per month but were living well and still within our incomes.
Well since then it has been an ugly cocktail of mis-spending and just riduculously bad judgement on my part.
Personally as of today I have in unsecured cc debt $57K
all with the major companies, Chase, Citi, Cap 1, HSBC ; spread over 7 cards. Per month the min payment is in the 1200 range
Most of the debt was incurred by balance transfer / cash convenience checks, most recent about 3 months ago.
My wife which I for the purpose of any solution would like to leave out if at all possible, has under her name solely 25K in cc debt over 3 cards ; same companies as above. Per month min is in the 500 range.
Worst part about my situation, I have no sob story, wife and I still have the same jobs, making the same amount we have made for the past few years. I can get my finances and spending back in order but not with my current minimum monthly payments eating away at me monthly.
Basically I wasted away $75K in the past 12 months with no assets gained to show for it and which was money I did not have other than by tapping into credit cards.
I feel like I can pay off the wife's cards and maintain her credit if I could find a way out of my personal cc debt burdon.
We are happily married and live together and make enough to have high monthly expenses just not as high as I have had made them now.
Mortgage with a large debt (payment roughly 2700 monthly, taxes + insurance included) is in her name 100%, I am not on the loan or the title but my income is needed to pay the monthly amount (I make a higher salary than her)
I want to maintain the same payment and not touch this mortgage or the house.
Car, I have 1 in my name (none in wife's name) which has a $19K or so balance and that I pay $575 per month for the next 36 months for.
I want to maintain the same payment on the loan and the car.
Other household vehicle is worked owned but I do pay a usage/overmileage/insurance/repair fee to my employer which is off the books and paid by me once yearly at the cost of roughly 4K per year (so I need to be able to put aside 300+ per month for this - hidden expense)
House still is worth more than the mortgage but not enough to refi with cash out.
Also have student loans in her name but the interest is very low and don't have a problem paying the 200 or so per month bills.
Haven't missed any payments yet, house, car nor credit cards.
But couple of late ones the last few months - none more than 30 days - and I feel my ability to pay all of these bills is slipping.
Have about 2K in recent medical bills that just arrived in the mail as well and haven't yet thought about how to pay for them.
Only savings/asset is 401K in wife's name from her work.
Thinking if I can resolve my own mess, we could use all of that available as a 401K loan to pay off her credit card balances and the medical bills.
Her credit is still very good, with probably 25K used out of 55K cedit card available. Mine has slipped recently due to not missed payments or anything crazy but becuase I have 57K credit card debt used as of 59K available, so I am basically all maxed out.
Last fall we were both over 700, now I have no idea where either of our scores are today.
Don't want/need any new mortgages or car loans for the next 8 years or more so I could care less about my credit score. Her's ideally I would like to keep reaonably high.
None of the cc debt is shared, all either 100% her name or 100% my name. Car 100% my name, House Mortgage, 100% her name.
I would say after all important expenses (car, mortgage, student loans, etc...) I can comfortably pay another 1K to cc debt, maybe more but not the 1700+ that our min credit card payments are now. Maybe lifestyle changes can get me up to the 1700 range but then I would be doing nothing than making min payments and mainting the same debt owed with never relief in site.
Chapter 7 would make sense for me but I make too much money and I think I cannot exclude my wife's income when taking the means test and/or wouldn't pass anyway so I need to think of some kind of debt settlement/consolidation plan, chapter 13 or remain status quo tapping into some of her remaining credit to pay monthly bills for another year plus while hoping for a windfall.
Looking into it I may be better off deciding now but waiting on anything until January so I can delay any additional income from debt reduction reported to the IRS until April 2013.
Please help, starting to feel the burdon of all of this and haven't even received any collector phone calls yet.
My wife really does not know of the issue, she knows money is tight and we have to stop spending and that we have a large credit card balance but probably thinks it is half of what it really is.
I obviosuly will tell her when/if I do anything drastic and I don't mind the phone calls to my house about my credit or anything else BUT
don't want a.) my employer to be involved, b.) to get sued and wages garnished, c.) my family to get involved (other than wife)
d.) lastly as mentioned above don't want wife's mortgage loan or my car loan affected by this - house being most important above all obviously.
My credit score could drop to 300 for all I care at this point, it is not a concern.
I worry if I try settlement I may get a credit card company that decides I make enough salary and to sue me rather than settle???
I worry about tons of collection calls coming into my work???
Advise? Please...
I think you should contact with the creditors/collection agencie
I think you should contact with the creditors/collection agencies that have held your accounts now. You may explain them about your financial crisis and try to set up a payment plan with them. Otherwise you may get help from a professional debt relief company.
That's a hefty balance. Can you list the names of each of th
That's a hefty balance.
Can you list the names of each of the cards/creditors and the current balance, minimum payment and interest rate?
Also can you tell us how much you have available to pay on your cards after your mortgage, car payment and wife's cards are paid?
One other word of advice...she's your wife. You need to tell her what's going on. And you should do it right away so you can strategize together on how to tackle the problem.
Quick message to moderator: this was my first post, I created
Quick message to moderator:
this was my first post, I created a user name of
rogerthat
yet for some reason when my post went live it is showing a different username than that, possible to change my name?
Thank you for the reply: here is what I am looking at: me: Cha
Thank you for the reply:
here is what I am looking at:
me:
Chase1 18K @ 11%
Chase2: 5K short term low rate that is moving to 25% soon
Chase3: 4K short term low rare that is moving to 25% soon
Citi1: 12K @ 18%
CitiAmex: 9.5K @ 12%
Cap1: 7K @ 29%
HSBC: 2K @ 14%
in wife's name (which I would prefer to maintain and pay under original agreement terms)
Citi: 16K @ 11%
Cap1: 2.5K @ 15%
Chase: 7.5K @ 11%
I would estimate I have after paying mins on the wife's card, car, mortgage and other expense, have another 1000 max per month to go toward my debt above.
Spent countless hours reading other posts and stories (mostly go
Spent countless hours reading other posts and stories (mostly good but some bad) on this forum...
I am leaning toward contacting my credit card companies and asking for a hardship plan pay off, which I assume would cancel the cards but may get me a low or no interest rate and a way to pay them off in 5 years time???
Don't care if it looks bad on my credit report.
Not sure how common or likely that is, but someone recently posted that their cards offered them hardship plans of 0% interest and 60 months to pay balance in full.
In theory if I got the option of paying 1000 per month for 60 months, I could wipe clear my debt that way.
They were 20 days late if I recall correctly so nothing crazy happened with their balances in terms of late fees, etc...
Everyone talks about settlement, but I am not sure how it works for so many folks unless they have a cash balance available to them with which to negotiate ; like a severance package, family member or 401K loan?
Otherwise saving up what you otherwise would pay the cards would give you enough to settle a couple of cards, but then if all goes well with those the others could have you in court and totally screwed owning lawyer fees and everything else with garnished wages/
Not only that ; the account balance grows quickly when you don't pay quickly. Even if they don't call you on BK threat and settle with you, a 40% settlement or 50% settlement on an inflated balance may really be a 50% or 60% settlement on what the balance was before you stop paying.
Lastly, then the tax man comes calling and you pay 30% of whatever amount they wrote off with your settlement, so true settlement percentage again is lowered.
Hello Roger that. Please consider some rough guestimates: Given
Hello Roger that. Please consider some rough guestimates:
Given the balances you shared the likely best case outcome of all your cards offering you their internal hardship repayment plans over 60 months you are looking at a monthly nut of 1150.
You will be asked budget/expense/income questions when attempting to qualify for a hardship plan. If your answers do not meet the computers program to offer you zero % over 60 months some creditors may not qualify you for a hardship, or more than likely will stick the plan at a % below 10.
You cannot generally call while current and qualify for any plan. You must be behind. With some creditors more than 30 days.
If you agree to a reduced payment hardship over 60 months and fail to make a payment you lose the benefit of the plan and some will not offer another opportunity like that again or wont for 12 months.
If you attempt to settle your accounts you are looking at something in the ball park of the following (I will assume the higher percentages in the estimate so that you can consider them in part of your planning and decision making):
Chase1 18K @ 11% - settle between 30 and 40 % - 7200.
Chase2: 5K short term low rate that is moving to 25% soon - settle between 30 and 40 % - 2000.
Chase3: 4K short term low rare that is moving to 25% soon - settle between 30 and 40 % - 1600.
Citi1: 12K @ 18% - settle between 30 and 45 % - 5400.
CitiAmex: 9.5K @ 12% - settle between 35 and 50 % - 4750.
Cap1: 7K @ 29% - settle between 50 and 60 % - 4200.
HSBC: 2K @ 14% - [COLOR=Red]settle between 30 and 40 % - 800.
The above estimates your needing 26k to settle. The estimates are the highs and using them is just prudent planning. Some will settle at the lower ranges, but using the above higher figures will account for balance accretion that will occur from late pay, potential over limit fees and further interest rate hikes that will appear in the third billing cycle after you fall behind.
At 1k a month savings the guestimates above have you through this in 26 months. In my opinion that is too long. Your risk of being sued is often directly correlated with how long the settlement plan will take you. You have capone and citi who are more aggressive in pursuing collection through the courts. You can mitigate some the litigation risk by approaching some accounts in a hybrid approach where you stagger early settlement opportunities with temporary hardship plans etc.
What do you estimate your ability to access additional funds outside of the 1k monthly cash flow to be? If you could get your hands on 10k that is not associated with your monthly set aside of 1k from income you would then be looking at a 16 month plan which would allow you to avoid filing a 13.
Hope this helps you weigh your options.
Best of Success in your efforts!
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Many thanks Someone Else, this is extremely helpful. I likely
Many thanks Someone Else,
this is extremely helpful.
I likely will swing one more month or so of meeting the minimums but day is coming soon so I need to figure out a plan of attack.
It is possible I could get some money to put toward setllement but not really something I want to do (family member that would likely help out)
Thinking try for the hardship plans and maybe go setllement route on a couple of them if the hardship plan options are not what I need to make the payments.
It seems others here have been able to do a mixture of hardship and settlement with some success.