Need advice

[BoardWalkBelle]

I need some advise. I am knee deep in credit card debt. I havent paid a CC in close to 3 yrs. I have thought about BK but am scared, mostly because I am a renter and once potential landlord see BK on your credit report, they wont touch you. I work FT but am barely getting by as it is (dont earn much). a couple yrs ago i tried a consumer credit counseling and they sent me a plan where i could pay something like 700 a month and pay off my cc but i dont hhave anything extra at the end of the month, especially hundered of dollars,i just dont know what to do. Most of the loans have been sold to collection agencies at this point.. at this point i am ignoring it and hoping it will go away..so to speak...but i know it wont.. i just dont know what my options are...any advice??

 

[Eeyore5]

Google Dave Ramsey. He has classes on how to manage finances.

When I had a credit card I wanted to pay off, I got a second job and all that income went to paying off my debt. I also went to a cash only budget and lived a very simple lifestyle -no eating out, no expensive foods (beans and rice meals), 2nd hand clothing only. It was rough, but now I am dept free aside from my mortgage. I worked 12 hour days between my two jobs, one full time, and one part time. For me what helped was making the decision that I can get out of debt, making a plan, and sticking to it.

 

[mickeyboat]

Can you get a second job? Have you cut out every unnecessary expense? How about a roommate? I think you are going to have to do a lot of work to get out of this mess. Good luck!

 

[Swan4Me]

I'd post this on the Budget Board-there are several financial experts over there

 

[cassandrap83]

If making more money & getting a second job are not a possibility, I would either:

a. Declare bankruptcy & stay put where you are renting. And no, it's not true that all places won't rent to you with a bankruptcy

b. Continue to not pay on the credit cards. They'll be off your credit report in a few years anyways

 

[phorsenuf]

Have you talked with the credit card companies and tried to settle? Sometimes that's settle for a lesser amount. They'd rather get something versus nothing.

 

[BoardWalkBelle]

I did try to settle, not recently, though and they still wanted more than i cold afford. I am working 45 to 50 hrs a week and i am a student so no time for a second job..

 

[mamacatnv]

Since you are a student, is it possible to get a student loan that has a fixed rate and you can defer until you finish school? You can then negotiate the CC's and pay them off.
I have a friend that negotiated to 40% of the balance.

 

[low-key]

Go Bankrupt and stick it to the man

 

[Cantw8]

to get out of debt, I used to transfer my balances to one card that offered 0% interest for 12 months. I paid as much as I could and when time ran out, I transfered to another card that offered the same deal. It took awhile but I paid it off. Good luck to you, nothing worse than worrying about finances

 

[LadyZolt]

Since you are a student, is it possible to get a student loan that has a fixed rate and you can defer until you finish school? You can then negotiate the CC's and pay them off.
I have a friend that negotiated to 40% of the balance.

I am not an expert, but it is my understanding that, while you can discharge credit card debt in a bankruptcy, you cannot as easily declare student loans in a bankruptcy. It seems foolish to me to take on a student loan you can't get rid of in exchange for eliminating credit card debt that you could eliminate by declaring bankruptcy. Likewise, it is foolish to take out a home equity loan to pay off a credit card because you're allowing someone to place a lien on your house and possibly foreclose on it -- you could lose your house.

OP: Call the credit card companies and explain your predicament to see if you can get them to forgive some of the debt. If you tell them you're considering bankruptcy in your desperation (and do sound apologetic, sincere and pleading), they might elect to let you off the hook for some rather than chance getting nothing.

You indicated that you really can't save money. If you don't want to declare bankruptcy, you will have to find some way to save money. If you can work out a budget that allows you to make minimum payments on your cards, then you should throw as much money as possible each month to the card that charges the highest until that is gone, then the second highest, etc., until all are gone. You can also consider getting a "no interest for a year" credit card and transferring the debt from an existing card to the new one and paying it off that way.

If you truly cannot save any money or get a second job (which is understandable in this economy), you might have to consider bankruptcy. Yes, it looks bad on your credit report for a while, but in the long run, it will disappear and you can re-build your credit.

-Dorothy (LadyZolt)

 

[mamacatnv]

I am not an expert, but it is my understanding that, while you can discharge credit card debt in a bankruptcy, you cannot as easily declare student loans in a bankruptcy. It seems foolish to me to take on a student loan you can't get rid of in exchange for eliminating credit card debt that you could eliminate by declaring bankruptcy. Likewise, it is foolish to take out a home equity loan to pay off a credit card because you're allowing someone to place a lien on your house and possibly foreclose on it -- you could lose your house.

OP: Call the credit card companies and explain your predicament to see if you can get them to forgive some of the debt. If you tell them you're considering bankruptcy in your desperation (and do sound apologetic, sincere and pleading), they might elect to let you off the hook for some rather than chance getting nothing.

You indicated that you really can't save money. If you don't want to declare bankruptcy, you will have to find some way to save money. If you can work out a budget that allows you to make minimum payments on your cards, then you should throw as much money as possible each month to the card that charges the highest until that is gone, then the second highest, etc., until all are gone. You can also consider getting a "no interest for a year" credit card and transferring the debt from an existing card to the new one and paying it off that way.

If you truly cannot save any money or get a second job (which is understandable in this economy), you might have to consider bankruptcy. Yes, it looks bad on your credit report for a while, but in the long run, it will disappear and you can re-build your credit.

-Dorothy (LadyZolt)

I meant in lieu of bankruptcy. If she took a student loan and used those funds to pay off the debt she could then defer the payments on the student loans until she finishes school at which point she might be making more money or would have the free time to get a second job. The student loan if stafford would have a fixed low interest rate which would be far better than what the CC's are currently accruing on a monthly basis. Plus by settling the debt she can begin to repair her credit.

The problem IMO with bankruptcy is it can really haunt you for a long time and unless there is a huge amount of debt, it would not be an option for me. There was a thread just the other day about someone who could not take a job that he had been offered because he had a BK within the prior 2 years. There is a lot to consider besides what a BK does to your credit. IMO

The days of easy credit are gone and with a bad credit history the OP might have a really hard time getting any credit cards let alone ones that offer a zero interest period.

 

[BoardWalkBelle]

I actually am receiving student loanst(hats another can of worms that i will worry about later) but am using that to help pay rent, etc on top of my job..I earn just 10.00 an hr so the student loan $ pick up the slack on rent..when i am in school i work just 32 hrs per week..

 

[LuvOrlando]

Find your local Legal Aid Society and get yourself some help & good advice

 

[Carly_Roach]

If your outlay on debt and living expenses exceeds your income, bankruptcy is the only way to go. And don't let anyone tell you that this means you won't be able to rent anywhere. There are plenty of places where you can rent, just not the sky-high luxury places (which you probably couldn't afford anyway).

Another solution is what someone else suggested upthread: don't pay any of the CC balances and wait them out. You've already invested three years in getting past the nagging collections people. If you hold out another two years I believe they automatically have to be written off. I could be wrong but I don't think I am.

I'll do some quick research on that and be back to let you know.

 

[pospisil]

Don't just let the credit cards go, whatever you do. They can, and will, get a judgement against you for the balance. And even if they don't, the debt doesn't just "disappear" after seven years. It won't show on your credit report, but it still exists, and is still collectable.

 

[Carly_Roach]

If you're going to research not paying the debt in lieu of BK, here are some links for you:

http://www.bankrate.com/finance/debt/bankruptcy-better-than-waiting-out-debt.aspx

You say that you have not paid the bills in close to two years. That means that in most states, you are close to halfway to the end of a debt statute of limitations period. The statute of limitations is a law that sets the time within which parties must take legal actions to enforce their rights. Most states provide creditors a four-year period to start the judicial process against you, that is, sue you.

http://www.financiallypoor.com/gues...bt-and-lawsuits-how-you-can-protect-yourself/

Interestingly, when the statute of limitations for debt concludes, you still aren’t out of the woods. At this time, your debt is referred to as “time-barred.” While this does not mean that debt collectors can’t sue you, it does mean they can’t win as long as you explicitly inform the court that your debt is older than the statute of limitations. If you do so, the suit will be dismissed; if you don’t, you might lose a lawsuit you had no business losing, hence why understanding the statute of limitations for credit card debt is so important.

Statue of limitations tables can be found here:

http://education.cardhub.com/statute-of-limitations-for-credit-card-debt/

There is one warning that came up on that page that I think you should be aware of:

The biggest mistake you can make with a “time-barred” debt is to pay a little bit of money at the wrong time just to stop the calls from collectors. Doing so resets the statute of limitations clock and reopens the possibility of being taken to court. So unless you plan to pay off your debt in full or have reached a settlement, don’t start making small payments in hopes of stopping the calls. Instead, send cease and desist letters to collectors who continue to harass you over time-barred debt.

After a certain point, collectors might abandon efforts to recoup your debt altogether because the complexity of collections outweighs the benefit. However, you may feel the moral obligation to pay the debt when you can afford to do so.

I personally feel that a BK and a fresh start (with better money management skills) would be preferable to waiting and hoping that your CC companies don't sue. However, that decision is totally up to you. Many people have successfully waited out the CC companies, but I believe it takes tremendous intestinal fortitude to do so.

Best of luck to you.

 

[Sadie22]

Since bankruptcy stays on your record for so long, and since that may affect your ability to get a job in many fields, do not declare bankruptcy without fully understanding its ramifications for your future.

 

[BoardWalkBelle]

from what i have read onliine, statute of limitaions on CC where i live is 4 yrs, which means they cant take legal action to collect the debt after that time, but i also rread collections agenciess have up to 20yrs??? doesnt make sense..also from what i understand is CC companies can chage off a bad debt after 6 months so that means they are rid of it, so why do they sell it to collections agencies??? ugh

 

[phorsenuf]

from what i have read onliine, statute of limitaions on CC where i live is 4 yrs, which means they cant take legal action to collect the debt after that time, but i also rread collections agenciess have up to 20yrs??? doesnt make sense..also from what i understand is CC companies can chage off a bad debt after 6 months so that means they are rid of it, so why do they sell it to collections agencies??? ugh

Oh, I don't know, maybe they want their money?