Need advice, in deep sh!t. (Getting rid of credit cards...)

[BackInBlack]

Looking for some intelligent input from people who have any experience getting rid of credit card debt. Essentially, my wife had a depression breakdown and put us in the hole over 11k with credit cards, then didn't make any payments on time, which shoots the rate to almost 40-fukking-percent. Basically, we have no chance in hell of making payments each month. The interest alone each month is more than our mortgage... Any pointers before I start thinking about chapter 7 filing??? Is there any way in hell that we can get the cc companies to lower the interest rate, or even (yeah, right) drop our accrued interest charges all together? I already have one full-time job and TWO part time jobs, so getting a FOURTH is out of the question. I'm just about at the end of my rope...

I think I'll change my name and move to Australia...

[QwikGT]

i screwed up like that when i was younger, i charged like 8 grand and didnt pay it back. i called one of those people that call your creditors and have them settle for less money. my 8 grand debt turned into about 3100$ i pay it off monthly and im almost done.

although it would be cool to pick up and go to Australia, the monaro kicks ass!!!!

[Sabrewings]

although it would be cool to pick up and go to Australia, the monaro kicks ass!!!!

To hell with the Monaro. Commodore SSV...

I've heard mixed things about those companies that settle stuff for you. If you go that route do your research and make sure they come through for people.

[SyntheticShield]

I didnt have that much, so I just focused all the extra money on the CC's I could until I got them all paid off and then they went in the trash in a million little pieces. However, since thats probably not an option your best bet is to call the credit card company and tell them straight up that you want to get it taken care of but that the interest is unbearable and that chapter 7 is a possibility. They are likely to work with you in some way so that its not a total loss for them.

If that doesnt get you anywhere then try Consumer Credit Counseling and see what they can work out for you. If they dont work out then as QwikGT said, try one of the other companies.

What you have to beware of is the fees they charge and how much of what you pay them to intervene for you goes to actuall paying down the debts, so beware of that.

[VinnieGTP]

First thing you should do is contact the CC company and beg for a lower rate. Be nice, being mean won't get you anywhere.

If that doesnt work, call your bank. Apply for a personal loan, AKA consolidation loan. Those intrest rates are usually about 12.9 which is a lot better then 40. Do you own your home? Maybe think about refinincing and rolling it into that. That's how i bought my fiancee's engagement ring and te rate is like 6% and the payment is tiny since its spread out over a 20 year period.

[archemedes]

talk to the cc company, most of the "debt consolidation" services are scams (and illegal in many states as they take your money, and don't pay the cc company) if you tell them you can't pay it, they usually work with you.If that doesn't work sometimes you can get a debt consolidation loan from your bank with a very low interest rate, that may be a bit more manageable

[UR LOSN]

Focus on one card at a time. Pay the minimum of the rest and then focus on the lowest balance...and pay it off...paying MORE than the min payment. this will eliminate one card, then boom you focus on the next.

It takes time, but it works!!!!!

[Zef_66]

I don't have much advice with dealing with CC companies. But I agree to stay away from the debt consolidation services. You may not have to pay as much now. But they ruin your credit. And it is on your report and will screw you up for a long time to come.

I think the best course of action would be first contacting the credit card companies. Let them know the situtation you are in and that ch 7 is a possibility. They don't want that, and will do what they can to help you.

If they don't help you, then I would look into a personal loan through a bank or credit union (credit unions are a better bet since they don't care as much about credit rating). Then payoff the credit cards with the loan, and focus all your extra money on the loan. Or as someone else suggested, refinance your house, or a home equity loan.

But bottom line is you want to lower the interest percentage, as that is what is killing you. First step is to try and talk it out with the CC companies. Then, if they won't work, find a way to pay off the CCs and deal with a lower percentage loan.

[morkuma]

Focus on one card at a time. Pay the minimum of the rest and then focus on the lowest balance...and pay it off...paying MORE than the min payment. this will eliminate one card, then boom you focus on the next.

It takes time, but it works!!!!!

that's what i'm doing. not that i'm HUGELY in debt, but i just want to clear the cards. start fresh

[GR8racingfool]

[QUOTE=SyntheticShield;62725] your best bet is to call the credit card company and tell them straight up that you want to get it taken care of but that the interest is unbearable and that chapter 7 is a possibility. They are likely to work with you in some way so that its not a total loss for them.


X2

If you contact them direct, and tell them your wanting and willing to pay this off, but tell them they need to have realistic numbers on their end. If they don't want to play ball, then chapter 7 is an option. Two of my sisters filed, and now they have better credit than they had before. They didn't have a problem getting new credit cards later, and one even bought a condo in Huntington Beach, CA. BUT, under Bush's new law, you cant go out and buy a bunch of crap, and then file, and not expect to not have to pay for the crap you just bought. One of my neighbors at my parents house did that, and found out that the hard way. LOL stupid moron.

~F~

[GR8racingfool]

Oh, and be sure to take any rest of the cards away from the misses, she lost her privileges. Tell her it was my decision if she has a problem with it. LOL

Side note, I have had some sort of a credit card since I was 16, and have always paid them off monthly as I go. I'm 28 now, and realized first hand what a good credit rating really means when you go and buy a house. They considered me a low rick loan, and with my down payment, my monthly payments on my home is less than my sister pays for a 1 bdrm. apartment the size of my living room. Thats food for thought for the younger one reading this.

If at all possible...never get in debt in the first place. But if your married...sometimes stuff happens like in Brian's case here. Sorry to hear about your problem, this sucks.

~F~

[Iron Indian]

Yeah, take her cedit cards away from her and cut them up, she don't deserve them at this point. Sorry to sound like a hardass, but its true.

My Mom got into some credit cad trouble several years ago. My dad knew nothing about it (they keep things separete) until he went to the bank one day to get a 15 yr loan on his house vs the 30 he already had. He didn't quailify because of her ****. I was a kid at the time, thing were VERY UGLY. Needless to say, he personally cut up every credit card and the following day set up something at the bank to fix that ****. From what I remember her problem was she kept adding debit, but was paying the minimum on the cars, which was like $10 a month. You can't do that and expect to get ahead. Anyway, he fixed her **** and she had it straightened out within a year or two I believe, it was a good some, like $12,000 or so. Shes still not allowed a CC or anything, all she has is a checkbook. Servers her right.

I'm just like Farns, I had a CC when I was 16 years old and always generally paid them off within a month. My good credit rating is what got me into my house period. I was considered a low risk too and I was surprised since I NEVER had a bank loan before in my life, not even a car loan. I paid cash for my GTP years ago, I didn't want a car payment to deal with. I only had 2 credit cards, thats it. Course I have my savings at that bank too which i'm sure helped a little bit too. But I had no problems getting a home loan, it was fast, easy, and painless. I put down a pretty damn good down payment and got locked in a low interest rate. I was quite happy how things turned out.

What I recommend, keep track of your books. Watch how you spend everything. I get made fun of by friends for keeping a checkbook, but I do and I have never had issues like them with money. Also, put money away and leave it alone, as often as you can. I personally recommend every pay check or ever week putting money in savings, what ever you can. (Off topic use 401k, put in the max match amount you can). When you get a bonus, save it don't throw it away. Unless you have the money on hand anyway.

I laugh all the time when I see people post threads on other boards ""Just got a $1,000 bonus, what should i buy for my car"". Obviously by that statement they don't have the money laying around to buy a few goodies for there car. In my opinon instead of blowing money, they should take that bonus straight to savings and be done with it. If you don't have the money on hand to modify you car or do whatever and can only do whatever when a bonus comes along, you probably shouldn't be doing it anyway. IMO.

Sorry to hear about your situation Brian. Hopefully you can get this stuff fixed without filing for bankruptcy. Take contol of the situation and don't let her have any access to the money. Any and all money goes through you from now on...

[GTPJOE90]

i have never had a credit card yet... will soon.... i dont wanna have any debt what so ever i have a few people i can look up to and listen to them and stay clear of heavy debt

[GTPJOE90]

gr8racingfool haha my parents have AMAZING credit and guess what i wouldnt own my amazing GTP if it was for his credit score haha =] this is a reason why i never want debt and if possible always pay in cash ha

[Warhellride]

^If you never have any debt, you'll never build your credit score. Just get 1 or 2 cc's (preferably rewards cards, so you get something from them), don't treat them as extra money (only spend them on stuff you'd buy anyway), then pay them off at the end of each month (you don't pay interest that way).


Brian: I agree with just about everybody in the first page. Talk to your creditors and try to get your interest rates reduced. They want you to pay off your debt, not file bankruptcy, so they'll be willing to work with you if they see you're committed to paying it off but can't afford your current payments. Debt consolidation or home equity loans are also great ways to lower your payments, as long as you or your wife don't use the cards again afterwards.

Good luck, I hope everything works out.

[GTPJOE90]

warhellride yea my parents tell me this also thanks man ill keep this info in mind in the future! =]

[Reptile]

One more option is perhaps seeing if a bank can do a personal line of credit/loan. Or even do some kind of balance transfer to their cards. They can start out with a low percentage for say a year, and then go to a standard rate between 7-18%. I know it sounds kind of screwy, but I did this exact same thing about a year ago to pay off around 12k of debt. Got an offer from Discover and went with it. Then I paid as much as I could every single month....even sold a car to do it, yeah it sucks but not having that hanging over my head anymore is so worth it.

I'd almost suggest staying away from filing chapter 7, or credit counceling companies. IN some cases those companies can harm your credit more than you think. I know I know....it's the responsible thing to do to pay up.

Keep your chin up, it'll get better.

[UR LOSN]

that's what i'm doing. not that i'm HUGELY in debt, but i just want to clear the cards. start fresh

this is the only way you dont get docked on your credit, and you actually build it up while paying them off. sure its not quick...but you will be on the right path.

"EVERY" little tid bit goes on your credit...including Ch7......


it takes 7 years for that dock to go away......just remember that.

[04 GTP COMP G]

dam that sounds so firmilar. sooooo much the same here. just like what everyone is saying contact the cc company then what I did told the wife to get a job. she did

how do u think i got my 04 GTO she's still working. lol

[GR8racingfool]

^If you never have any debt, you'll never build your credit score. Just get 1 or 2 cc's (preferably rewards cards, so you get something from them), don't treat them as extra money (only spend them on stuff you'd buy anyway), then pay them off at the end of each month (you don't pay interest that way).

Yup, this is the way to go. Get you a card that pays you some sort of percent based on the dollar amount you spend with your card. Its like free money. You can either cash out once or twice a year, or just let it sit there.

I used to have a Chase and a Bank of America card, but after Chase would wait to mail your statement till you only had 3 days to make payment due every month I closed my account. Bank of America, when they started offering cards to illegals with no social security number I said hell no, and closed my account with Bank of UnAmerica and told them as to why. Both cards would make me up to an additional $800.00 yearly sometimes just by using their card.

Currently I have a GM Flexible Earnings credit card and love it. It has a Pontiac arrow head on the front, pretty pimp.

Make sure if and when you decide to close a account with a credit card company you make sure to tell them to put "closed per customers request" as a comment and have them mail you a letter showing that the account was closed, and your comment is in there.

On your credit report, it will show every card you ever had, and currently have, and if they see closed, closed, closed, closed on a lot of cards, it does not look good. So having the comment in there as YOU requested that it be closed is a nice way to cover your butt, and make your credit report look good to who ever is reading it. Especially a future employer who pulls credit reports for potential employees, as a way to see if your trustworthy and responsible.

~F~