new here...and lots of debt. help..

One other thing.

You're looking at the boat payment as 300 a month, but count the 25K you owe on it in the 80K of debt.

Sell the boat and reduce your overall debt, pehaps by more than you owe on it.

Why tank your scores and your reputation (what FICO really is, a numerical representation of your reputation, which is why we're all so horrified by ours when they're down)?

 

Another way that might help to look at it, since we all seem fixated on the $300 (does it or doesn't it help that much?).

How much are the minimum payments on your credit cards, their balances, and credit limits. How "short" are you falling each month? How much do you need to get rid of to get comfortable? Can we help with suggestions on budget? Sometimes you can't see the forest for the trees, you may have stuff eating you up monthly that you really can't see right now.

Thats alot of personal information to lay out on the internet. Have you thought about going to a professional financial advisor and see if they can set you up on a budget? (Not CCCS or similar). If you truly want to explore all options, don't overlook budget planning. May be that 6 months of serious belt tightening will get you going where you can breathe easily, and not file BK.

 

Re: Re: Re: new here...and lots of debt. help..

I just saw this thread. Just so the poster is aware:

1. Paying ANYTHING to a relative and/or business partner within a YEAR of filing is a preferential payment, and would be reversed unless you have a contract and you are not making payments above the agreed amount. Even then, it's going to be looked at. And it's going to be looked at going back further than 1 year, if the question comes up

2. An income of $75k will get you looked at very carefully by most jurisdictions in this country for a C13. I make not much more than that, I live in a very expensive part of the country, and I'm paying $450 a month (it would have been $900, except I planned things and bought a new car 3 weeks prior to filing). I spoke to 7 lawyers, including two who ONLY do C7s, and they ALL said I make way too much to get away with a C7.

3. Please don't discuss hiding cash on this board. It's AGAINST THE LAW.

The BK courts are getting a lot tougher about things in accordance with Congress' apparent desire to tighten the screws. You are not just subject to the local Trustee, you'll be reviewed by the Federal Trustee as well, and they aren't nice guys.

If you want to file BK, more power to you, but don't count on it being a cakewalk.

If I had only owed that much, I would have paid it.

 

Re: Re: Re: new here...and lots of debt. help..

On reflection, I take back my last sentence. You owe 4x salary. That's the same boat I was in for over a decade, every time I thought I was making progress, some 5k disaster happened, or some CC company reviewed my credit and bumped my rates from 9.9 to 29.9.

You'd have to put 50% (about 70% of takehome) into debt repayment for a decade to get rid of that pile of debt. That's ridiculous. Just don't expect to keep the boat, and don't go hiding money. (I'd get rid of the boat anyway, it will do you good to live more simply.)

BTW, BK courts don't generally let people budget to keep secured luxuries, including 2nd homes. Maybe you're in a particularly BK friendly state, but I'd ask a few more attorneys. Some are quite happy to file a C7 for you, then charge you again to file the C13 when the C7 gets denied and your credit is now screwed so bad you can't do anything else.

 

The house, the boat, the car, the student loans, and the unsecured debt = about 4 x salary.

 

If you need something reliable, sell your 25K car, take the 5 grand profit (if indeed the car will sell for that much more than you owe) and put it into your highest interest rate account. Or the BofA. Then buy a small, well built reliable car (like a Honda Civic - I got a new 2002 LX for a total original loan amount of about 13.6K). You now have a smaller car payment and 5 grand of unsecured paid off. Your paid off 25K car loan will also look pretty good.

Sell the boat. You need to be putting that $300 a month into unsecured debt. I impossible that the tax benefit is paying for the boat all by itself.

The reason I said to pay down the BofA - it's smaller than most of the other debts and easier to pay down. Pay it down to zero, just once, wait a few months, and they'll start sending you low-interest BT deals. Take the ones with no BT fee if they beat the rate on you other unsecured, and park some debt there cheaply, instead.

Your house loan sounds like it would have a reasonable payment considering your salary. Keep it. Do not get upside down by taking out more loans against it.

Most importantly...make a budget. You must track everything you spend. You got into 60K of unsecured debt because you were leaking money like all the colanders in Italy. I recommend you cut up every credit card and store the pieces in your file cabinet. If you can't live without them while you pay off your debt, not even bankruptcy will save you; you'll just end up in the same boat - no pun intended - if you can't spend within your means. Apply for no new credit.

If it was your wife who got you into the mess, and you are the financially disciplined one, then none of these recommendations should pose any problem for you.

 

Re: Re: Re: Re: Re: Re: new here...and lots of debt. help..

I don't mean to be too harsh, but the reality is, living off credit is living off of money that you haven't earned (yet). You've asked your creditors to spot you many dimes, and if you declare bankruptcy, you will be forcing them to let you keep them, too.

(Not that I'm particularly on the side of faceless corporate creditors. Just pointing out a oft obscured truth.)

 

Re: Re: Re: Re: Re: Re: new here...and lots of debt. help..

Instead of asking your grandparents to GIVE you the money, ask them to LOAN it to you. You need to draw up a promissory note and make monthly payments. The interest rate must be reasonable.

If you default, they can take you to court. The rate has to be reasonable in the market to make it not be a taxable event, but rates are pretty low right now.

Use the amount you borrow to pay off the highest interest rate loan and work downward, as I detailed before.

The advantage to this is that the debt is "hidden." If you don't use the cards you pay off, you'll lower your debt to CL ratio, and you'll get better offers. As you get them, only BT to a paid off card, and don't use it for anything else. Keep rolling the minimums that are paid off into what you pay the next one. You'll be surprised how the numbers will start to come down--slowly at first, then faster and faster as you get to lower interest rate debt and are therefore paying much more on the principal.

If your grandparents want to help you out, they can each give you up to $11K (I think that's the amount this year) per year without tax consequences to either of you. If they give you a gift, you can decide to give them equivalent gifts later, that would postpone some of your payments.

 

Re: Re: Re: Re: Re: Re: Re: new here...and lots of debt. help..

This is well stated.

 

Re: Re: Re: Re: Re: Re: Re: Re: new here...and lots of debt. help..

This thread sure has grown inexplicably!

 

Re: Re: Re: Re: Re: Re: Re: Re: new here...and lots of debt. help..

What are the interest rates on your 1st and 2nd loans on the home? That 2nd must be at a high rate.

If they are high, look at getting a new 1st at a lower rate and reduce those payments.

Cas