Have $40K in CC Debt, What to do?

Hello,
First you need to confirm that your lender cannot come after you for the deficiency on the house. Just because they agreed to the short sale doesn't automatically mean they let you off the hook. Whether or not they have the ability to come after the money will have a direct effect on your decision to either file a BK or settle the debt.

Without knowing more about your situation I can't tell you specifically what you should do, but given your income, a chapter 13 is more likely than a chapter 7. A chapter 13 is a repayment plan that may or may not have you pay back the debt in full. This is just a pure guess, but if you are making 100K per year and no longer making your house payment but likely a smaller rent payment, you will probably have the funds to pay off the entire debt over 5 years in a chapter 13. Of course the only way to know for sure is to meet with a BK attorney to learn how a BK will affect you specifically.

The good news is that you are 30 years old, make good money and have an amount of debt that you should be able to get out from under quickly given that income.

Typically you cannot settle unless you have a lump sum, or the ability to raise the money over just a few months. So what you would have to do if you chose the settlement route would be to raise the money out of your monthly cash flow.

To determine whether BK, settlement, or a more traditional Debt payoff approach is your best solution, I would need to know more about your overall financial situation.

Saving for retirement and perhaps setting up some 529 plans for the kids are good goals to have and you can start that fairly soon, but knocking out the debt and getting a few months of liquid savings in the bank seems to be the bigger priority at this point.

Thanks for the reply. We hired a law firm and the lenders are not able to sue us at all. We got so lucky. A canadian couple bought our house with cash as an investment and are rent is $700 for the same home we were paying $1700 per month for. They said that price is locked in for the next 20 years for us. Are there any banks/credit unions that would give us a personal loan at a lower rate to pay this off as opposed to bankruptcy. Our credit scores are around 630 after the short sale.

Thanks for all your help.

Sure thing, glad I was of some help. I am confused, you mentioned you hired a law firm so none of the lenders are able to sue you. Which lenders? The credit cards? Why are they unable to sue? Are you continuing to pay them?

PROFESSIONAL DEBT RESOLUTIONS

If you have at least $6k in credit card debt that is weighing you down, we can get those accounts settled at 15% of what you owe.
We will get you out of debt and return your credit score back to normal. If your fico score is dropping and you don't know how to dig yourself out because the money is just not there, this program will really benefit you.

Our office has been fixing people credit for 8 years. This program approach is proven, unique and effective.
By disputing the very validity of the debt, the creditors always choose to settle for 15% rather than get nothing at all.

Give me a call or shoot me an email and we can discuss your case. We are Licensed and Bonded in the state of Indiana

Guardian Credit Solutions
P.O. Box 1772
Portage, IN 46368
(219) 262-9999- Office
[EMAIL="Guardiancreditfixer@yahoo.com"]Guardiancreditfixer@yahoo.com[/EMAIL]

[QUOTE=Anonymous;758664]PROFESSIONAL DEBT RESOLUTIONS
If you have at least $6k in credit card debt that is weighing you down, we can get those accounts settled at 15% of what you owe.
We will get you out of debt and return your credit score back to normal. If your fico score is dropping and you don't know how to dig yourself out because the money is just not there, this program will really benefit you.
Our office has been fixing people credit for 8 years. This program approach is proven, unique and effective.
By disputing the very validity of the debt, the creditors always choose to settle for 15% rather than get nothing at all.
Give me a call or shoot me an email and we can discuss your case. We are Licensed and Bonded in the state of Indiana
Guardian Credit Solutions
P.O. Box 1772
Portage, IN 46368
(219) 262-9999- Office
[EMAIL="Guardiancreditfixer@yahoo.com"]Guardiancreditfixer@yahoo.com[/EMAIL][/QUOTE]

Come on now. Unique? How? Debt validation programs are a dime a dozen and they don't work for the most part. You certainly can get lucky and get some creditors to leave you alone, but you can do that just by doing nothing. Sending your validation letters are more likely to get your clients sued these days.

You mention that your method is proven? Proven how? What is your definition of effective?

What do you do for your clients that would prefer to sue instead of only getting 15 cents on the dollar? There are plenty of them out there.

I think the original poster means they hired a law firm for the short sale.

Original poster, please register and keep us updated on your progress.

My feeling is that you should have settled these cards during/before the short sale cause then you could point to your hardship. While wanting to save for kids college is noble, the credit card company only cares that you can pay and if you are saving money elsewhere then you can pay. That is how they will see it.

Good luck. Kaylee