Ditching the CC bills...

[bumbershoot]

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.

I agree.

I get that you aren't trying to get away with not paying what you owe.

But I don't think you are thinking this through. Stopping your payments will cause your balances to absolutely explode through the roof. Saving up to pay it off all at once makes sense if the interest remains the same and no late fees are charged. But then you're just paying later what you could pay now. So even that makes no sense. But when you start having late balances on everything, interest on the late balances, interest on the principal continuing and getting higher and higher, it doesn't come near making sense.

If all you can do is minimums right now, that's all you can do. You're about to have 3 things happen that will cause you to have too little money. Stopping the payments will make it WORSE.

Don't do it; you're not thinking it through correctly.

If you can work and aren't working, and if your money isn't going to be shunted to something else (like if you will be garnished), or even if it will be garnished but you'll get *something*, that something is better than nothing. I found don't like working outside the home either, and hubby and I are much happier when I'm not doing so, he supports me with that entirely (and it was me picking up a job application in May that kicked him into higher gear about a job as departmental closing loomed) BUT I actually wouldn't mind the job of a dishwasher in a restaurant! It's a mindless job, but that frees me to let my mind wander. A lovely philosophical job, where you get results with every dish, or every time the industrial dishwasher finishes a load. Lovely job. I'd do it in a heartbeat if needed.

So find *something* to take care of the imbalance...put that money towards the lowest credit card balance. Get that balance taken care of as quickly as you can. Once it is done, close the card. And take the money you were sending them as the minimum, along with the money from your job, and put it towards the second card. Etc. Even if you aren't finished with it by the time no-overtime and student loan rolls around, you'll be in a better position than you are now, and by the time the rent thing comes around, perhaps you'll be in a position to tell your landlord that you'll be moving if they raise the rent too much.

Then just keep on paying off the lowest balance, rolling that payment and all the minimums you were paying on the no-finished-and-closed cards towards the next one, etc etc etc.

No late fees, no spiked interest b/c of late payments, no interest on late payments, etc.

Much better.

And then once the huge crisis has past, if you hate the short-term job, you can go back to the cozy way you two like living...or maybe you'l find you like whatever you picked up, who knows?

Good luck!

 

[Green Tea]

OP, I know you enjoy taking the suitcase of leftovers around WDW. Maybe you play on that idea of a delivery service and actually make money rather than giving away your gas and time. Then you still get to do something that makes you happy, but it is a job and will help slowly whittle away your balances.

 

[MiniGirl]

And then once the huge crisis has past, if you hate the short-term job, you can go back to the cozy way you two like living...or maybe you'l find you like whatever you picked up, who knows?

Good luck!

No, no, no. They cannot go back to the cozy way they were living. That is what got them into this mess to begin with.

Look OP, what's done is done and you can't change the past, but I don't understand how not paying anything on ANY of the cards will benefit you. I could maybe, almost understand if you said you were going to put all your money into paying off one card while letting the others slide and then continue to pay them off that way. Even then though, I would think that is a bad plan.

Also, you said that your "plan" is based on past experience on what happened last time. This means you have a pattern of living beyond your means. I don't know if you have a job or not, but I certainly hope you are not choosing to not work. I would hope you aren't being that selfish and inconsiderate towards your partner.

 

[minnie1928]

I'll throw this out there to see what others think...I remember reading about all the changes going on with rates being increased and that if you "opted out" of the increase you effectively closed the account but at the same time they often offered to dramatically lower your interest rate. Assuming that you are no longer charging things to the cards, can you do that to a few of the cards in order to get the rate down?

I would really try to find another alternative to your plan. As another poster mentioned, you are going to massively rack up fees and interest in those 90 days and it will only make your debt larger.

 

[Colleen27]

I can understand where you're coming from. I've not been in that position myself, but after helping my brother with some financial issues, I can see how it would work... When he was struggling to make minimum payments on time and borrowing from my mother to keep gas in his car and food on his table, the credit companies wouldn't work with him at all. He stopped paying when my mom was no longer willing to pay his living expenses and fell 2-3 months behind, and all of a sudden he was inundated with offers to settle his accounts. Yes, late fees were added, but the reduced amounts were still less than the balance he had been carrying from month to month. So if you're 100% sure you have the income and self-control to put aside the money to take those paid-in-full offers, it might be a way to close out some accounts completely.

 

[crisi]

Remember that if you settle for less than you owe, the difference is taxable income - and the IRS is not a forgiving debtor.

 

[Magical Mama]

When I married DH about 4 and 1/2 years ago, he had $20K in debt that he was no longer making payments on. He had racked up the debt putting himself through school, going through a divorce and some other various charges. We sat down together and decided we needed help. The one min payment was over $700!!! We used a debt consillidation agency, named Care One and they were fantasic. They contacted all our CC companies and halted the over the limit fees, the interest hikes, the late payments etc. Our monthly payment was $500 which they divided up amongst the CC each month. We then used every extra dime we had to pay extra on the cards, starting with the lowest total first. Within three years we had paid them all of!!! And this was only using DH's income, I was now going through school! And it didn't wreck our credit score. I definately recommend doing this option! It is doable, I promise! PM me if you have any questions but please don't stop paying the credit cards! Nothing good will come of that! Best of luck to you, I know how stressful this can be!

 

[TheZue]

You're plan is beyond flawed. You'll be saving money in your bank acount that might get you 1% interest if you are lucky. Meanwhile your debt will be accumulating interest probably at 30% compounding. All to save some interest???? Even if your rate isn't that high yet, watch what happens when you stop paying. Your debt is going to grow by almost 10% by the end of the year if you have a 30% rate and you pay nothing. You are going to pay more interest on the debt as it accumulates than you could possibly save in a marginally lower rate. Where the heck is the logic in that?????

Seriously, get a job. It's not all that bad. That or sell a bunch of your stuff you bought.

 

[minnie_michelle]

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.

I completely agree with this. YOU helped charge up the cards, so YOU help pay them off. There are not great jobs out there, but there are still old-fashioned part time ones, some full-time waitressing or store jobs and I've even seen signs for jobs for the holidays. So people are hiring. Do not give up.

 

[laurio]

In your pp, you said that you've talked to CCCS. Was there any particular reason you chose not to take advantage of their repayment program? Most of the time CCCS can get the credit card companies and finance companies to drastically drop interest rates and extend the repayment period to get you over the hump.

If you have large balances (min payments of $350 usually means a balance somewhere around $20K) and stop paying it totally, the credit card companies can and do sue...once you have a judgement, that money comes as a levy against your paycheck/bank account/ IRS returns. Most state laws allow for civil litigation with balances as low as $7k.

I'd recommend either going back to CCCS and get them to send out the contracts TODAY or find a LEGITIMATE debt relief company in your area.

If you are not working....you need to. $8/hour is a lot better than $0/hour. I know! I was a Collections Manager for a National Credit Card Company, as well as a Mortgage Closer for a large bank....when real estate went bust...so did the income that came with it. Working p/t @ an hourly wage I haven't made since jr. high keeps gas in the truck and pays the cable bill.

Best of luck to you!

(I am not an attorney and this is not legal advice I have had over 25 years experience in the Collections and Credit field, and hope you take the good advice you've been given by other posters.)

Lauri

 

[AntePrincess]

Wait, how are you going to pay off your debts without any income of your own? What do you do when your girlfriend gets sick of being used? Get over yourself and get a job. Pay your bills. When you're debt free, then go all John Galt on us. What's your word worth if you'll sign a contract to pay your credit card bills, including interest and fees, the price of credit, but now say you're fine with not keeping up your end of the bargain since "it's only interest?"

Oh, forget principles, that seems to miss the point here: if you do this, your debts will promptly skyrocket, you'll still be on the hook to pay them, and everyone from the government down will be breathing down your neck. Collections and creditors will make your home life miserable, which may very well wreak havoc in your relationship sending your sugar mommy packing. In other words, your proposed course of action will decidedly not accomplish what you hope it will.

A possible alternative would be to find a new creditor who will give you a consolidation loan at an interest rate that is less than the weighted average of your current rates, resulting in one monthly payment that works out to less than you are currently shelling out all told. Then get a job and help pay it off.

This is exactly why I drum it into my child's head (yes, from two on up) that you never financially entangle yourself with a spendthrift, a deadbeat, or a debtor. Forget marriage and a prenup: not even a lease! Not even a goldfish! Fortunately, I needed a boogeyman to remind a footloose and fancy-free friend why she needs to think twice about putting her name on a mortgage with her current beau.

 

[Planogirl]

I suggest that you work with CCCS! We had a credit card get totally out of control after we both went through layoffs and then had huge medical bills. The credit card company would not work with us but they came around when CCCS contacted them. They got the rate lowered considerably and set up a payment plan.

We have been paying for quite a while for this but we feel that we should pay the debt. We only wanted a lower rate to make the bill more manageable and IMO that should be your goal too.

 

[lovemygoofy]

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.

Other stating the obvious about getting a pesky JOB to help your situation, I would like to say that yes you do have to maintain your credit score for other reasons.

Your car insurance as well as other monthly bills can have a price increase dependant on your credit score. When it's time for your yearly contract with your apartment, they can charge extra if they like to protect themselves from people that do not pay their bills. Also, what happens when you quit paying the bills and the credit company calls your bluff calling in the whole note or reducing your credit limit all together which is entirely possible?

In this day and economy you, cannot just stop paying your credit card bills. Your credit score is for everything not just credit cards or major purchases. Also, if I was Kari I'd be beyond pissed that I'm busting my butt working 60 hours a week to try to make the bills and you think just not paying the bills for a few months will help the situation. You did this previously on ONE credit card not SIX or however many you have.

I think that instead of running around the bag of junk you should set up a delivery service of people that want to mail boxes to themselves. You don't want a real hard working job and this would have you out and interacting with DISers on at WDW.

 

[mom2twinz3]

I know some have mentioned starting a delivery service for WDW, but failing that....why not try for a job with WDW itself? It sounds like you love WDW and being there, and you can use the $, so it sounds like a perfect solution.

Definitely do not stop paying though, this is a bad, bad plan. You will regret it for years to come.

I wish you luck and I hope you are able to come up with a better plan for your debt.

 

[wdwfan16]

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...

Get a job. You will be losing income in Jan, only 3 months from now, and you already do not have enough income.

 

[Kay1]

I really like the "Disney errand person" idea. Especially with so many people using ME they could use someone local who could make a trip to Publix or CVS for them. You could call it "Thanks, Sandra!" and advertise here.

 

[wdwfan16]

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.

So you have no intentions of getting a job?

 

[disneynewbee]

My sister did this and almost every creditor sent them offers to settle the debt for less, sometimes half. If they don't though you would need to be prepared to file bankruptcy because catching up once your late is nearly impossible. Good luck.

 

[AftertheSunset]

Other stating the obvious about getting a pesky JOB to help your situation, I would like to say that yes you do have to maintain your credit score for other reasons.

Your car insurance as well as other monthly bills can have a price increase dependant on your credit score. When it's time for your yearly contract with your apartment, they can charge extra if they like to protect themselves from people that do not pay their bills. Also, what happens when you quit paying the bills and the credit company calls your bluff calling in the whole note or reducing your credit limit all together which is entirely possible?

In this day and economy you, cannot just stop paying your credit card bills. Your credit score is for everything not just credit cards or major purchases. Also, if I was Kari I'd be beyond pissed that I'm busting my butt working 60 hours a week to try to make the bills and you think just not paying the bills for a few months will help the situation. You did this previously on ONE credit card not SIX or however many you have.

While this is true, in today's economy, do you know how many credit scores have tanked recently? With interest rates going up, people closing their cards because of the increases, credit scores in general are down. Once you close a card, your score takes a hit.

I think if the credit card company "called her bluff" and lowered her limit, that would be a blessing in itself, don't you think?

I know some have mentioned starting a delivery service for WDW, but failing that....why not try for a job with WDW itself? It sounds like you love WDW and being there, and you can use the $, so it sounds like a perfect solution.

WDW currently has a hiring freeze. One of my relatives has been unemployed for over a year now and she wanted to go work down at Disney, but they aren't hiring.

I know many have mentioned a credit counseling service, but that ruins your credit just as much as not paying your bills or filing for bankruptcy. If it were me, a credit counseling service would be my last OPTION. I'd look at bankruptcy first.

I love how people just keep saying "get a job". While I don't know the OP's background like so many of you do here, it's not that easy to just "get a job" in this economy. I know many people that have been unemployed for over a year, some over 2 years. They apply to a few jobs a week and NOTHING...not even a phone call.

I wish the OP luck in her situation.

 

[Allison]

Bad plan. Getting a job is a much better idea.