OK, I was dreading this day but it's come. I have been out of work for quite a while now and it's caught up to me. I had a good little savings account but it's gone and the credit cards are maxed out, One has now gone 30 days past due (my first negative mark on my credit report, yes I wept) and I am not sure if the others are going to get paid this month either. No one has actually started calling yet, but I am sure that's coming really soon and I want to be prepared as to what to say and what my rights are. There is a good side to this, I did finish school since I have been out of work and I am now able to apply for more jobs so, hopefully, something comes around soon. I am not sure what info someone would need to help me out, but here is the basic stuff. Credit Cards -- 3 (MBNA, Disney Visa, AMEX Blue) MBNA mininum is $245 monthly Disney minimum is $99 monthly AMEX minimum is $106 monthly Total interest charges are at least $300 a month Credit Card Debt -- $31,000 ($10,000 transferred from home improvements LOC to get lower rate) I own my home, I owe $98,000 and it's worth about $120,000. Whatever else one might need to help me out, please ask. I am going to get through this and get my good credit standing back, I just need a little help here in order to do it. Thanks in advance to anyone who can help!
You could, of course, sell your home and be left with $10K-$15K debt, which you could probably carry with even a moderate income job. You have $450/mo in credit card payments. What do you have in morgage/LOC payments? Other living expenses? Adding up all your monthly expenses, is it likely you will get a job, whether in your preferred field or not, that will cover them within a reasonable time? If you transferred your LOC to CCs for better rates, you then have some LOC available. Although you would not want to dig yourself in deeper if there was no light at the end of the tunnel, if it is likely that a job will shortly pull you out of your cash crunch, it would be better not to damage your credit and cause your lending terms to be degraded. It looks like you are working on what you need to: get a job and get your income up.
Indeed, and thanks for the response. I do not want to file BK. I will avoid that at all costs. I don't know if it is smart but I would rather have them charge me off than for me to file BK. I am going to do everything I can to hold it together but it's not looking good right now. What are my options with the CC companies? At what point might they take a settlement? I am not going to re-fi my home only to owe money still. If I can can take like $15,000 and pay them all off by doing settlements with the companies, than I might do that. I mean I am not trying to get over on them, I am just trying to figure out a way out of this that I can salvage my credit history. Thanks.
Can you get any work at all? Maybe at 7-11 or McDonald's, but at least it's a little income. You can call the credit card companies, but most of them seem to not want to work with you until you are at least 3 months behind, from what I've heard. I had to refinance my house to an exorbitant rate (around 11%) to get the money out to pay off bills. I waited too long to do it. Of course, I did have a job. That will make a difference too, you may not be able to refinance even if you want to if you don't have a job. As several financial advisers have said, a mortgage isn't really a loan on the house, although that is collateral. It's a loan on your income. A home equity line of credit might help if you could get one. That leaves your mortgage intact. Yes, you're borrowing against your home, but when you get a job and more money your can pay it off fairly quickly. Have the credit card companies started to jack your rates, reduce your credit lines, anything like that?
No one has reduced a credit line, but of course MBNA has jacked the rate up to like 16.49% or something like that. Neither of my other cards have been affected yet. I figured they wouldn't work with me until the situation is out of control, but the funny this is that no one has even contacted me yet. Now, they may be calling at times when I am not home but I have received no messages to call them. Lastly about the job, I am looking but McDonald's makes no sense for me. I would have to put my kids in daycare and that would cost more than I would make at a job like that. I just have to hope one of the ones I applied for comes through. I mean I have a good work history and a bachelor's degree, this shouldn't be that hard, but for some reason the market here right now is just horrendous.
I understand if you have kids that McDonald's might not make sense. Is there some type of work you could do at home? That means that anything you make wouldn't have to go to child care. I hope you find something soon.
Thanks Hedwig, I appreciate the words of encouragement. I might go to graduate school since the job market stinks right now. I'm sure something will work out. I will post again when I get into the bad stuff with my creditors, I know it's coming soon.
