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What can I do?

post #1 of 36
Thread Starter 
I just added up our credit card debt. 47,000. I feel like i'm going to be sick. It will take forever to pay this off. We don't have extra and pay our mortgage by the end of the month. Feb mortgage will be paid next week. I called all the cc companies and got the intrest rate lowered on all the cards. My dh and i knew we had cc debt but to see it in front of me is tough.
post #2 of 36
eeek! So what are your rates? You're saying you don't have ANYTHING, but the minimum payments each month? Can you increase your income?
post #3 of 36
What were you spending it on? Has the spending stopped? What are monthly payments?
post #4 of 36
Have you stopped charging?

If you can only send the minimum every month it seems that you will need to do something to increase your monthly income.
post #5 of 36
File for bankruptcy. SRSLY. Your credit is already ****ed.

You don't need a lawyer and you can find the forms online. Get a credit report and gather up all your statements of things you can no longer afford to pay. It will cost a few hundred bucks to actually file the bankruptcy.

It will be such a weight off your shoulders.
post #6 of 36
Check into Dave Ramsey's programs for Financial Peace. $47K is not unreasonable to clear up in 2-3 years with gazelle intensity.

DR's program emphasizes: NO NEW USE OF CREDIT
Increase your income if possible
Have an emergency fund to avoid using credit
Attack your debt with 'snowball' of extra money, from smallest debt to largest.

It is a great program that we've been following for about 14 months and we have paid down around $17,000 of our own ~$50K in debt.

Looking at the future of being debt free is awesome.

A free website for people who are wanting to pay down their debt is

www.llnoe.com

It has a Christian opening page and the philosophy can be Christian but I am not and have not been offended or put off by the steps and support at that website!

Good luck.
post #7 of 36
I would probably start figuring out where I can come up with some extra each month, even just a few dollars each month and snowball that all into one card til it is paid off and work my way down. Has the spending completely stopped? It won't get any better as long as you are still spending!! Then just a little at a time, as long as you stay current on your payments you can get them paid off. Another thing that we did was to call up the companies and ask them for a hardship plan, basically the card was completely frozen in time, we paid no interest in that time and as long as we stayed current on those payments they didn't change that, so we were able to continue to make min payments as that was all we had, but they were actually paying down the balance. Good luck hon, I would hav a hard time filing bankruptcy unless I knew that there was absolutely no way it would be paid and we were behind on our payments etc.
Hugs
Jessica
post #8 of 36
If you can stop charging and live without credit cards for a couple of years, then file bankruptcy. Seriously. Credit card companies are massive leeches that make billions of dollars in profit every year. They profit off of the fact that people have difficult living within their means because wages have been stagnating or declining for more than 30 years. They'll get a tax write-off on the losses, all the money they've already collected from you and you'll get the financial freedom to start over. If you can live within your means then you can rebuild your credit in a few years and use the $50K you would have spent paying them back to build your equity in your home and savings for future financial emergencies.
post #9 of 36
Before deciding whether to repay or look into bankruptcy, you need a *lot* more information.

Do you own anything (house, cars...)?
Do you have other debts (cars, student loans...)?
What is your income?
Do you get a tax return? How much? Is it already budgeted?
What does your monthly budget look like?

If you have no other debts, make $120K yearly and have $10K in tax refunds coming the situation is a LOT different than if you have car loans, student loans, make $20K and don't have a refund coming, kwim?
post #10 of 36
Quote:
Originally Posted by FloridaBorn View Post
File for bankruptcy. SRSLY. Your credit is already ****ed.

You don't need a lawyer and you can find the forms online. Get a credit report and gather up all your statements of things you can no longer afford to pay. It will cost a few hundred bucks to actually file the bankruptcy.

It will be such a weight off your shoulders.
I agree except I would spend the money on an attorney. Forgetting to dot an i or cross a t can make all the difference. If you decide to file, stop paying your minimums and you'll have the money for an attorney in a very short time.
post #11 of 36
Quote:
Originally Posted by bronxmom View Post
If you can stop charging and live without credit cards for a couple of years, then file bankruptcy. Seriously. Credit card companies are massive leeches that make billions of dollars in profit every year. They profit off of the fact that people have difficult living within their means because wages have been stagnating or declining for more than 30 years. They'll get a tax write-off on the losses, all the money they've already collected from you and you'll get the financial freedom to start over. If you can live within your means then you can rebuild your credit in a few years and use the $50K you would have spent paying them back to build your equity in your home and savings for future financial emergencies.
So should I start shoplifting from WalMart because I don't agree with their business plan or the way they treat employees? If you incur debt, you're supposed to pay it. People can't, fine, but please don't present abdicating personal responsibility as some kind of Us vs Them noble act.

Oh, and the tax write off on the losses--who do you think pays for that? Taxpayers!
post #12 of 36
Quote:
Originally Posted by newbymom05 View Post
So should I start shoplifting from WalMart because I don't agree with their business plan or the way they treat employees? If you incur debt, you're supposed to pay it. People can't, fine, but please don't present abdicating personal responsibility as some kind of Us vs Them noble act.

Oh, and the tax write off on the losses--who do you think pays for that? Taxpayers!
I think you're missing the point of the post. It is not stealing to reach a point where you realize you can no longer sustain a large debt. The unscrupulous and predatory practices of the credit card industry encourage folks to to incur this debt. Also, many folks have been hit with double and triple interest rates without any notice. My feeling is when the CC companies did that, they stopped playing by the rules. I had cards at 5% that got jacked up to 20% over night. That's when I crunched the numbers and realized it would take 50 years to pay off the debt. We visited a BK attorney the next day. BK has been a God send for my family and I will never carry another credit card for as long as I live. This is for 2 reasons. First and foremost, I will not support such a smarmy industry. Second, I don't need them I pay cash for everything. Similarly, I choose not to patronize WalMart because I disapprove of their business and labor practices. I've never shopped in one and never will.
Bankruptcy is an important part of a free market system. It relieves business owners and private citizens of unmanageable debt so they can get a fresh start and start spending again.
In addition, over 70% of BKs are because of overwhelming medical costs. Of that 70%, 80% of those individuals have "medical coverage."
It is not stealing to file BK.
Watch the movie Maxed Out.
post #13 of 36
Quote:
Originally Posted by TiredX2 View Post
Before deciding whether to repay or look into bankruptcy, you need a *lot* more information.

Do you own anything (house, cars...)?
Do you have other debts (cars, student loans...)?
What is your income?
Do you get a tax return? How much? Is it already budgeted?
What does your monthly budget look like?

If you have no other debts, make $120K yearly and have $10K in tax refunds coming the situation is a LOT different than if you have car loans, student loans, make $20K and don't have a refund coming, kwim?
Ditto this. Income, other expenses, etc will help. $47k in credit card debts is a bit of a shock to the system but people pay that off, even without a 6 figure income so it is doable. However not knowing much else beyond that it is hard to offer suggestions. I do agree that looking into how Dave Ramsey sets up the debt snowball would help. You can read some stories on his website that should be inspirational.
post #14 of 36
Umm do you have stuff from this spending to sell? Or a creative way to make some extra money?

We have a lot of credit card debt too, but we charged it and we will pay it off.
post #15 of 36
Quote:
Originally Posted by chiromamma View Post
I think you're missing the point of the post. It is not stealing to reach a point where you realize you can no longer sustain a large debt. The unscrupulous and predatory practices of the credit card industry encourage folks to to incur this debt. Also, many folks have been hit with double and triple interest rates without any notice. My feeling is when the CC companies did that, they stopped playing by the rules. I had cards at 5% that got jacked up to 20% over night. That's when I crunched the numbers and realized it would take 50 years to pay off the debt.
You know this is a good point. Twice that I know of now the credit card companies have changed the rules on consumers without much in the way of warning or recourse. The first was with the universal something-or-other when they suddenly decided that if you were 5 days late on an unrelated expense like your car payment then they could jack your rate up. The second was this past year or so when "good" customers who paid their bills on time and followed every letter of the lending agreement had their rates put into the 20%+ range - and even the banks couldn't (wouldn't) show a reason for it. Suddenly those 3 cards at $100 a month each turned into 3 cards at $300 a month each and the attitude of the creditors was "too bad". It's difficult to feel sorry for the credit card companies or to regret filing bankruptcy after that to be honest. When I was growing up we called people who acted in that manner "loan sharks"; that plastic card just makes them considered a "legitimate business" imo by their actions today.

Now with all that being said, I would not immediately assume bankruptcy is the way to go. For one thing, we certainly don't have enough information to make that decision! Depending on income, the op may not be able to wipe out everything with a Chapter 7, but rather be required to pay it back via Chapter 11. It sounds like the op is still able to pay the cc's, it's just tight with little to no progress. First thing of course is that when you find yourself in a hole, stop digging. Cut op the cards and stop using them. Second thing I'd do is look for a new card to consolidate some or all of them on (then immediately cancel the previous cards!) or see about a bank loan, etc. at a lower rate and lower payment. Then keep paying the same amount, so more will go to principal. I have no idea what the monthly payments are on that amount, but for arguments sake let's say you get an extra $200 towards principal each month that way. A part time job for one of you should pull in at least another $100 a week - so another $400 a month. That's now $600 a month going to that debt. Now you're down to 6 1/2 yrs to pay it off. What's not included are raises at work or the extra you can apply to principal when you pay off one card and apply that amount to the next one. Once they are paid off, especially if you've paid on time, you've done yourself a big favor on credit reports. Bankruptcy, on the other hand, stays on for 10 years. Just something to think about.

I will offer one final word of advice. If you do consider bankruptcy, don't dawdle on the decision. If you decide to file, every month you put off that decision and you pay those bills is literally wasted money you may as well be burning in the fireplace.
post #16 of 36
Quote:
Check into Dave Ramsey's programs for Financial Peace. $47K is not unreasonable to clear up in 2-3 years with gazelle intensity.

DR's program emphasizes: NO NEW USE OF CREDIT
Increase your income if possible
Have an emergency fund to avoid using credit
Attack your debt with 'snowball' of extra money, from smallest debt to largest.

It is a great program that we've been following for about 14 months and we have paid down around $17,000 of our own ~$50K in debt.

Looking at the future of being debt free is awesome.

A free website for people who are wanting to pay down their debt is

www.llnoe.com

It has a Christian opening page and the philosophy can be Christian but I am not and have not been offended or put off by the steps and support at that website!

Good luck.
post #17 of 36
Quote:
Originally Posted by newbymom05 View Post
So should I start shoplifting from WalMart because I don't agree with their business plan or the way they treat employees? If you incur debt, you're supposed to pay it. People can't, fine, but please don't present abdicating personal responsibility as some kind of Us vs Them noble act.

Oh, and the tax write off on the losses--who do you think pays for that? Taxpayers!
I agree.

It's one thing if, for example, you have accumulated debt because you have a SN child and insurance doesn't cover expenses. That's a whole other set of rules. But if you have consumed goods that you could not actually afford, then the ethical thing to do is to actually pay for them. When you use credit cards, you agree to abide by their rules. If you don't like the rules, then don't use them. Anyway, I don't think the OP was asking "how do I get out of paying this", but "what can I do to pay it off faster". Well, bankruptcy isn't the answer, IMHO.

OP, you've already lowered your interest rates. You can ask the cc companies to lock that rate in if you close your accounts. At that point, they can't raise your rates anymore. You agree to rate hikes as a user of the card when you keep the account open and active. Yes, there could be better gov't regulations of those rates, but by closing you account, you can lock in the rate and pay off the balance at that rate.

Suze Orman has lots of good advice without the religious aspect. She has been an advocate of "snowballing" debt for many, many years. If you do want the Christian perspective, the originator of the "snowball" method of debt payment was Larry Burkett. He came up with the blueprints that Dave Ramsey now makes money advocating. You might look up some of his books and articles.

Then I would evaluate how the money is being spent. Nearly $50K is not an insignificant amount of consumer debt and it's obvious you are living way beyond your means. Why is that? As TiredX2 said, there is a lot more that needs to be looked at before deciding how to proceed. Good luck!
post #18 of 36
Quote:
Originally Posted by chiromamma View Post
Bankruptcy is an important part of a free market system. It relieves business owners and private citizens of unmanageable debt so they can get a fresh start and start spending again.
In addition, over 70% of BKs are because of overwhelming medical costs. Of that 70%, 80% of those individuals have "medical coverage."
It is not stealing to file BK.
Watch the movie Maxed Out.
What?!? A free market, by definition, has no intervention or regulation. If there was truly a free market w/ regards to cc's, you'd be in debtor's prison until the debt was paid off. Thank goodness that's no longer the case, but it's no longer the case because there ISN'T free market capitalism.

The system you describe--you and the bank make a significant financial mistake, taxpayers carry it--sounds more like market socialism than capitalism but with the benefits only going to the top and bottom tiers. It's taxpayers that are relieving "business owners and private citizens of unmanageable debt so they can get a fresh start and start spending again. " Since taxes aren't going up, that means either the deficit will continue to increase or more services will have to be cut. This is a short-term solution that has long-term financial consequences.

Credit cards exist to make money. How is that "smarmy"? They don't force anyone to run up their credit. If anything, people bailing on their bills are the reason banks claim they need to raise their rates to make up the difference.

Yes, wages are stagnant. Yes, capitalism has proven to enrich the few at the cost of many. But sticking it to the bank isn't the solution, because in reality you're just sticking it to yourself and your children. If someone wants to talk about unionizing, or voting for officials who support a living wage or better working conditions, or supporting businesses that do, great!!! But I can't stand to see BK presented as some greater good for all.

Yes, I can see it's a necessary solution for some. I don't mean to make you or the OP feel bad. But bills don't just disappear--someone eventually pays.
post #19 of 36
Quote:
Originally Posted by newbymom05 View Post
So should I start shoplifting from WalMart because I don't agree with their business plan or the way they treat employees? If you incur debt, you're supposed to pay it. People can't, fine, but please don't present abdicating personal responsibility as some kind of Us vs Them noble act.



post #20 of 36
Quote:
Originally Posted by newbymom05 View Post
What?!? A free market, by definition, has no intervention or regulation. If there was truly a free market w/ regards to cc's, you'd be in debtor's prison until the debt was paid off. Thank goodness that's no longer the case, but it's no longer the case because there ISN'T free market capitalism.
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