Considering Debt Management instead

We would need a lot more information to help you in your decision.

Have you contacted CCCS? They will do a free evaluation of your situation and tell you what they can do for you. A DMP will stop the collection calls and get you back on track, but you need to be able to make the payments every month for the next 3 to 5 years. Many people fail this type of program.

Debt Settlement sounds like it could be a good option for you. What are you paying in minimums right now?

It sounds like you could qualify for a Chapter 7 bankruptcy. Since you are a one income home you should be able to keep the car and the house. The motorcycle will go. Personally I feel Chapter 13 is a bad option all around. You can also talk to a bankruptcy attorney. Many offer free consultations as well.

Bankruptcy isn't an option after thinking about it. I am required to have a clearance at work and would lose that.

If I could just find about $800 somewhere...I could catch up the past due amount and resume the minimum monthly payments. As for my breakdown:

NFCU Loan: 245
Citi Loan: 246
BOA Loan: 178
Chase CC: 160
Chase CC: 150
Lowe's: 30
Target: 50
Old Navy: 28
Capital One: 70

$1154 per month minimum. To settle $50K you would need around $30K (60%). At $1154 per month, you could have that in 26 months. Assuming you could pay that per month for the next 2 years, debt settlement could work for you. Your credit will be ruined, but you are already late on payments so that is probably already happening. Since you already have a home and a car, you should not need good credit for anything anytime soon. I would sell the motorcycle, to either stop that money going out and maybe get some money for it. I used to own a motorcycle and most of them depreciate very slowly. You should be able to get what you paid or a little less.

Check out this site and my blog for the different alternates to bankruptcy.

You should see what CCCS could do for you. Your minimum payments could go down but it will take you longer to pay.

I was looking into debt settlement via Freedom Debt Relief. But I prefer to stay away from the 1099 issue and messing with my taxes. Everything I have read, both on here and other sites, states that a company can and most likely will send the form to the IRS to tax the agreed upon settlement.

It is true that the IRS can tax the forgiveness of debt, but there are a number of exceptions to that rule that you should look in to. You have to be careful with Debt Management in general, as many consumers fail to keep up with the payments over the 3-4 year plan. In many cases, once you default on the payment, the creditors kick you out of the plan. There is an alternative to Debt Management called Debt Paydown, which essentially uses a sophisticated computer program to examine all of your debts and mathematically determine the best repayment plan considering the exact amount of your available income. In addition, you are not locked into a certain monthly payment amount, so, if you can afford more or less one month, you do what you can, and the software adjusts the calculation going forward for optimal repayment while significantly reducing interest. This software not only looks at your credit cards, but your auto loans, mortgage, etc.

Thank you for that info.

I guess it all comes down to being able to meet the monthly payment if DM is worth it or not, right?

Being on a military paycheck, my pay is fairly locked in until retirement which is about 3 years away. Of course we have other bills such as vehicles, mortgage, utilities, food, etc.

As stated above after all bills we currently have $600 a month left over. If I could just find about $800 to catch everything up, we can manage based on paying the monthly minimums. Also I have a large bonus coming next month and I have planned on using that money to catch all bills up.

Maybe I am just stressing over my current situation since there is immediate catchup in site. I have struggled with debt before and now realize the error of my ways.

The majority of people in a DMP fail, so make sure you can make those payments every month. It will probably take you longer than 3 years to complete it too, after you retire.

Just paying monthly minimums will take you a very long time to pay everything down. I have never heard of Debt Paydown but it sounds very similar to Debt Stacking / Snowball. My blog explains it and you can find various software programs that can show you how just adding $10 a month to your minimum payments can cut your payoff time down.

Thanks for that. I am aware that adding just a small bit to each card will allow for an earlier payoff.

My current problem is that I need to get out from past due amounts in order to pay the minimum amounts.

I would call the creditors you are behind on. You may qualify for a hardship program in which they will waive the late charges and work out another payment arrangement. Be careful, as these can sometimes leave you in debt longer.

Very good point. I never thought of that.

I have had very good luck in talking to our creditors, and working out a hardship program. Most of them set us up on a 5 year program, and cut the interest WAY down to get everything paid off in 5 years. We are saving a ton of interest, our minimum payments are significantly lower, and they have all sent letters confirming the agreement, and stating that there would be nothing reported to the credit agencies as long as our payments are on time. This did suspend the accounts, which was fine. We weren't using them anyway, just paying huge monthly payments. Good luck!