HELP! Credit elimination or consolidation?

Hi antipode, I'm sorry to hear about your situation. From what you stated you are sure you will be in no position to keep up with your bills in several months so a debt consolidation would not help much it will only put off in inevitable. For the home I would maybe talk to a service like NACA, they have helped people "redo" there mortgages and at the same time I would speak to a BK lawyer. To see if I could keep the house and minimize or eliminate the rest of the debt.

 

Well, that is certainly a bear of a situation to be in. I think the thing to do is forget about debt elimination or debt reduction scams which almost all of them are. They are expensive and can't help you if somebody decides to sue you instead of waiting. To make matters worse, both bankruptcy and debt elimination are viewed as being exactly the same thing in the eyes of future creditors. Either one tells a lender that you can't manage your own finances and have to run for help. That's not good at all. On top of that neither option is cheap. Both options wreck your credit but that can't be your main concern for the time being since anything you do other than paying in a timely fashion is going to wreck your credit.

So what can be done that is likely to do the least possible harm to your credit? One solution is to make a list of all your credit cards and how much you owe on each one and pick the card with the highest monthly payment and stop making payments on it entirely. The question then is whether or not the money you would save by chopping off those payments would let you keep your mortgage current and still meet your monthly payments on all the rest of your cards. If chopping out that one card will let you do that then do it that way. Your mortgage is the most important of all so keep on chopping off credit cards until you would have enough money left to meet the mortgage payments each month.
Maybe multiple cards would meet that criteria and if so then why not let some of them get 30 days behind on a rotational basis? Rob a different card(s) each month to pay all the rest of the them. Once you get your income back up and are paying regularly on all of them once again your credit scores will begin to creep up over the subsequent months and the lates will finally drop off after a couple of years.
If robbing Peter to pay Paul won't work then just stop paying on credit cards in order to keep your mortgage current.

In the final analysis, if you have to quit paying one or more cards entirely you will just have to do it and take the consequences which is getting sued sooner or later but that is no big deal either.

I've got a situation where I stopped making payments on a card back in 2001 and a debt collector is just now coming after me. The debt is way outside statute of limitations. When they first called me on November 9th I demanded validation and of course recorded the call. The caller, Sharon Whitney, made quite a few calls and blunders in the last month, all recorded. False and misleading statements for the most part. So I'm preparing a federal lawsuit against her personally. They finally sent what they called a validation a few days ago but it was nothing of the kind. Not even close. So I prepared a validation letter and sent it off certified mail about 10:00 o'clock last night. Anything they do including calling me without providing me without an actual validation will be even more against them. No matter what happens now I will file a federal lawsuit against Sharon Whitney at some time in the reasonably near future and once that is settled then it will most likely be time to file another one against the collection agency. Of course, once I do that to their employee they will know that I have the funds to pay them with so they will probably turn it over to a lawyer to file suit. That's when I will sue the CA in federal court and then get ready to go after the lawyer and the CA at the same time. So for just one debt I'm likely to end up getting paid 3 times. They are trying to collect much less than $2K and I'll get two to four times that much out of each lawsuit I file. They had better hope and pray they haven't put that on my credit report because if they do so without permissible purpose then they are in for a really big one. A grand a month for each bureau they are in times the number of months they stay there.

At that rate I'll gladly play their silly games every day of the week and twice on Sunday. (LOL) Debt consolidation? Forget it! Bankruptcy? Forget that too.

 

Hi Antipode - While I was current on credit cards, most would not cut the rate for me. After I ran out of money, I stopped paying entirely. After a few months, most of them offered me a five year payment plan at zero or very low interest. Basically, they took the principal, divided by 60 and that was the monthly payment. At the end of 5 years, they would be paid off. Unfortunately, I owed too much to even keep up with that. But I wanted to let you know that it is an option. But none offered it to me until I was delinquent.

 

Yes I was speaking of a loan mod it has helped quite a few of my clients to keep the house under good terms and they dumped the rest in ch7 and ch13 (one that I know of did a ch7) Here's my thing (and I have never filed bk, but would if I really needed to). You can always rebuild credit but you have to make sure you can survive. To be honest with you your creditors (at least the big CC companies) are not going to lose that money, they are going to write off more than what you truly owe them and make their profit from the tax break/lost write off. In the mean time your homeless worrying about paying them. Let me tell you, I've been homeless and it ain't fun. Now I own my own home\business and help people stay afloat in this crappy system (take a look at when I actually joined creditnet,way back in 2002). It comes down to how you wish to live and recover from your set backs. So here's my advice, try and keep the house and dump the rest of the debt and work hard to recover from this and next time use credit wisely.

 

So...let me try to understand..are you saying, not to pay the highest card for one month and that that money to pay more on another bill? And the following month resume payment of that credit card bill?