Ditching the CC bills...

[SandrA9810]

We're paying so much in CC bills by paying the min payments, that we could easily knock out one card if we put all that money towards it. From what I've read online and previous experience, CC companies won't help you till your behind. One time with us, we got about 90 days behind on one, and when we spoke to them, they allowed us to make 3 on time payments of a set amount and that would bring the account current (our min payment was up to like 350$ by this time). So I'm hoping that if I do this, I'll get a little bit of slack like that again, or be able to take part in a debt settlement with them.

So my plan is, to stop paying on all of them, save up every extra dollar between now and the end of the year, and pay off 4 credit cards entirely. Then come Jan, we take the extra money from that month and bring the last two accounts current. That would leave us with two larger CC, then we can start hacking down at those with above normal payments. One of the two larger cards I'd be willing to do a debt settlement program with them and be done with them all together.
I know there's going to be late fees tacked on (and well the interest rate can't go much higher than it already is). But I'm hoping that they'll take off one or two if I'm willing to pay it in full.

Am I trying to bite off more than we can chew?? Or does this sound plausible?? I don't want to spend the next 20 years of our life trying to pay this stuff off. And who knows how we will be financially down the line. We're almost to the point of not being to pay them all, and once Jan comes around and overtime goes down the bucket, we're really gonna be in a mess if our payments stay the same. Plus next March, the forbearance on the student loans is up, so an extra 100$ will be owed to that too each month.

 

[luvsJack]

You are going to recieve many posts that say otherwise, but I would suggest InCharge Debt Solutions. We just paid off all our cards earlier this year through them. I don't know that we would have ever gotten to that point without them.

They got our interest rates down really low, got all the late payment charges and all the over-limit fees taken off. We tried to talk to the companies ourselves but they would not do any of this for us.

There is a charge for their service, it is paid with the payment every month; but it is a small amount. Our fee was $10 per month and well worth it for hte peace of mind.

 

[pixie921]

I don't want to spend the next 20 years of our life trying to pay this stuff off.

Perhaps you should've considered that before charging so much on your cards.

If you're seriously considering this and really do want opinions, here's mine: You charged it, you pay for it. ALL of it. That's the morally and legally correct way to do it.

You stop paying on a CC and your interest rates on all of them will skyrocket. That will likely put you in an even worse position.

 

[Magic Mom]

Maybe you could get a job and put that money towards the cards. Then you and your GF's credit scores wouldn't get trashed.

 

[SandrA9810]

1: we charged most of these years ago, back when we were really financially stupid. So if anything, we're paying on the interest rate that has accrued after so many years.
2: before I lost my job, we were one year away from having everything paid off, (5 years for the student loan). But that was then, this is now.
3: I am looking to pay it all off, the entire debt. Just in a shorter amount of time, because we don't have any means to pay more than the min, so I can't just snow ball it.

If we save for the next 3 months, plus take an christmas money we get, and my aunt is planning on paying me for driving her from texas to indiana to florida later this month. We will have accumaleted enough to pay 4 out of 6 CC. If I don't majorly knock out some of this debt we're never going to survive jan when Kari can't work 60hr weeks.

Take Jan income, plus last year I was able to get taxes filed and returned by the end of Feb, that will make us current on the two remaining cards. And we can handle paying more than the mins to just two cards.

I've got to figure something out by next april because I don't want to move, our room-mate doesn't want to move, but our rent is going to jump 200$ because we're on a promo right now. And we're gonna have to start coming up with an extra 100$ in March to start paying the student loans.

LuvsJack: I have contacted CCCS, the best they could do was reduce our min payment by 50$ and would still take like 10 years to pay it off. Doing it on our own, we're on the same course. Plus the booklet didn't even tell me the fee that I would be charged, so that would nip into the 50$ saving...

 

[scrapindis]

Do you own a home? Can you refinance?

Debt. happens, people have circumstances. Just pay it off and do what you can to avoid it in the future. Don't let people's cruel comments deter you! You are asking a question to help pay it off, you aren't looking to get out of paying them.

Good luck!

 

[Chicago526]

You're running a big risk, at 90 days late many CC companies sell the debt to junk debt buyers, and the junk debt buyers can turn around and sue you for it. After 90 days the CC companies can also sue you for it. Your phone will ring non-stop with collection calls, and your credit score will tank. With a lower credit score you could see your car insurance rates go up signifigantly, have trouble renting an apartment and even finding a job. The are dozen's of ways a low credit score will haunt you, and this stuff will follow you for the next 7.5 years at least. That's how long it takes for negative stuff to fall off your credit report.

I wouldn't recomend what you are thinking of doing, it might work if you save up all the $$$ and you are able to pay it off before they sell the debt or sue you over it. But if something happens to that money between then and now and you can't pay, you'll up up a creek with no paddle and a leaky boat. It's a huge risk to take with consequences that can last you almost a decade.

Instead, I would recommend CCCS, which is credit couseling through the United Way. They are one of the few credit counseling services that are on the up-and-up and won't scam you. They can lower your rates drasticly (sometimes even to zero) and set you up on a payment plan that will get you out from under in a few years. This way you pay what you owe, it just lowers or eliminates the interest. It usually lowers your credit score, but generally not as much as just not paying your bills does.

Alternately, you could also file for bankruptcy 7 or 13. 13 restructures your debt much like credit counseling, 7 wipes it all out and you start over. I'd go the credit counseling route first, especailly if it's a choice between that and 13, since it pretty much amounts to the same thing, and with counseling you don't have to pay a lawyer.

 

[Green Tea]

It sounds like a REALLY bad idea. You will still owe the money, but you'll have accrued more interest, have hurt your credit rating, and potentially spent some of the "excess" money in the intervening months on something else. Keep paying the minimums and take a second job to try to attack one card at a time by paying over the minimum.

 

[SandrA9810]

1: Thanks for the advice on "seeking more income"... CCCS already told us that. As much as I wish our income would increase, I can't hope tomorrow will turn out better. We have what we have, and I can only plan with what we have today.

2: No, we don't own a home, we're in an apartment, and if I do this, then we don't have to worry about trying to find a new apartment.

3: I do know that the credit score will take a hit, but right now it's been falling 10-15 points every month. We're at the bottom of the barrel as it is. Our last negative hit was jan of 2007. Trust me I know, nearly half way through before it'll fall off. But I know come Jan, we will NOT be able to pay all the mins. And the clock will start all over again.

4: If we wipe out the majority of the debt now. It's still gonna be like 5-7 years before we're in a position of needing a great credit score.

5: If I start this now and pay it all off by the end of Dec, it'll be just before the 90 days. And yeah, I've dealt with CC calls before. We've had one card in past get to that point. But I do talk to them and I do let them know what our financial stance is at the time (and about 6 months later we had enough to pay it off entirely, which is what we did). And it usually takes years before you get sued.... not 90 days.

 

[NancyIL]

Don't stop paying the bills, as that will make things worse. If I'm reading correctly - you owe on 8 credit cards. Pay the minimum amounts on all but one, and pay extra on that one until the debt is gone. Then keep whittling away at the other cards. I would take the offer of a $50 reduction on the payments - especially if it's per card.

I'm sure you've already heard that you need to cut your expenses and try to boost your income. I understand that times are tough, and sometimes you can't cut any more or increase your income.

 

[Magic Mom]

1: Thanks for the advice on "seeking more income"... CCCS already told us that. As much as I wish our income would increase, I can't hope tomorrow will turn out better. We have what we have, and I can only plan with what we have today.

YOu've said before that you aren't looking for a job because you don't like working. That's bit you in the butt and now its time to make a sacrifice and get a job. It's not fair to your partner for you to freeload off of her especially if it's causing a financial crisis. I get it that the economy is bad and great jobs are hard to find, but you could get some part time entry level job (MacDonalds, a car wash, cleaning hotel rooms, etc.) just until the bills are paid off. Then after they are paid, you can quit again and go back to whatever it is you like to do all day.

 

[momxx5]

Fact - any credit card debt over 3yr old has been paid off by now and with higher interest rates and fees I'm sure you have paid off your fair share........I bet that will be unpopular here. I have spoke to cc company and lawyers regarding this and yes, the cc companies will be your best friends once you are delinquent. Remember though any settlement may lead to a 1099 for forgiven debt on next yrs taxes.

 

[RitaE]

Fact - any credit card debt over 3yr old has been paid off by now and with higher interest rates and fees I'm sure you have paid off your fair share........I bet that will be unpopular here. I have spoke to cc company and lawyers regarding this and yes, the cc companies will be your best friends once you are delinquent. Remember though any settlement may lead to a 1099 for forgiven debt on next yrs taxes.

That's true of any debt that you stretch out over a period of many years.

I mean, I've 'paid' the full amount of my mortgage already in regular monthly payments. Somehow I don't think Bank of America would agree that they should just write off that pesky $100,000 balance that's racked up because of interest accumulation though.

 

[RachaelA]

I don't understand how you think not paying them for 90 days will help.

You are going to get late fees for every single card for every single month its late. Plus all of your interest rates will increase. Your balance will be nowhere near the same as it was before.

 

[tinkabella627]

My opinion... ditching the bills is extremely irresponsible. Figure out a way to get them paid. The credit score will go down and it takes a long long time to bring it up. My husband had stuff go into collections when we first met and he never even knew because he was away at school and his mail wasn't getting to him. He paid it back when he found out but then like another poster said, had to get that 1099 form or whatever for his taxes. It wasn't a big deal for the form but he would have been better off not having that debt. Also, like another poster said... you bought it, pay for it. We have 2 credit cards (how in the world did you end up with so many to begin with?!) that we have to pay on. One has our honeymoon on it and the other has expenses from the first year that we relocated and had no money. We are paying them off. I am a teacher and extremely busy with my job yet I am considering getting a second job to help pay them off. So if you are not working at all, get a job and if you have one job, go find another.

 

[Rootskate]

It sounds like your in a pinch but my gosh, they will kill you with late fees and max out your interest rates if you stop paying! I would really think this through before you do it.

 

[JoBird]

Okay- sorry, I have to say this.

How in this world did it ever get to this point? Did you think when you were charging all of this that you'd never have to pay it back?

If it is in fact true that you don't have a job- and furthermore don't want a job- I am absolutely appalled.

I'd have more self respect and pride than to just say "Oh well" and walk away from my responsibility. It's your bill. You borrowed the money. You pay it back.

INCLUDING the interest rate-- CC's are not free. To your saying that you're paying on interest rate now that has accumulated- I say, "And"?
It's part of the bill. You buy something on credit, you pay for the item AND the credit. It becomes one. There is no differentiating the two.

If it meant I had to scrub gas station toilets, just to get by and pay the debt I owed, I would do it- instead of spending valuable time I could be working on an internet site asking opinions on what to do.

You know what to do.

Get a job. Any job. Pay the bills you accumulated.

Then learn from it.

Every day, I am astounded at what people will try to get away with.

Congratulations. You're my "Oh no she didn't" for today.

 

[tinkabella627]

Okay- sorry, I have to say this.

How in this world did it ever get to this point? Did you think when you were charging all of this that you'd never have to pay it back?

If it is in fact true that you don't have a job- and furthermore don't want a job- I am absolutely appalled.

I'd have more self respect and pride than to just say "Oh well" and walk away from my responsibility. It's your bill. You borrowed the money. You pay it back.

INCLUDING the interest rate-- CC's are not free. To your saying that you're paying on interest rate now that has accumulated- I say, "And"?
It's part of the bill. You buy something on credit, you pay for the item AND the credit. It becomes one. There is no differentiating the two.

If it meant I had to scrub gas station toilets, just to get by and pay the debt I owed, I would do it- instead of spending valuable time I could be working on an internet site asking opinions on what to do.

You know what to do.

Get a job. Any job. Pay the bills you accumulated.

Then learn from it.

Every day, I am astounded at what people will try to get away with.

Congratulations. You're my "Oh no she didn't" for today.

thank you... you worded that exactly how I wanted to but couldn't get the words out in my previous post because i was so aggrevated... my husband and i do whatever we can to get our bills paid off and usually the cc's are paid before they even accumulate interest. this will be my first time in 7 years of having a credit card that i will get charged interest and it will only be for one or two months.

 

[tnmt]

Get a JOB! I am so sick of paying deadbeats debts! If you don't pay your debt then we, the consumers, will be paying for your debt by either getting our interest rates jacked or some other way. Please get a job and do the right thing. I don't like to work either but I love the people that I live with too much to expect them to work themselves to death so I can sit home all day long and do nothing.

 

[robsmom]

Is all of the debt in both your names? Are all the credit cards joint? Whose student loan is it.

My thought is that maybe it is time to take a divide and conquer approach to your credit ratings. You mentioned that they are going down 10 or 15 points a month. Is this your rating going down or each of your ratings?
Is there something that you not paying that is causing your rate to slide or is it just that you are still spending and your balances are going up raising the % of debt you have to available credit?


This is not a political comment, I realize that you are partners and 100% share everything. Legally, however, you are two individuals. It may be possible to protect one of your credit scores while letting the other one slide. If for example you could pay everything in Kari's name on time and keep her score up, this would give you one person who has good credit for the future. This could be very helpful if you do want to move at some point or really need other credit. Then if you have to be late on your debts, only your credit would suffer. This would only work if you have some separate debt.