My sister has $80,000+ of unsecured credit card debt. She is thinking about doing a debt negotiation and is unsure if she should go it on her own or hire a company to do it for her. Here are a few things about here: 1. She is a lawyer and makes $80,000+ per year 2. Although that seems like a lot, after she pays her rent, car payment, and cc bills, she has nothing left each month 3. She pays close to $1,200 per month to her unsecured credit card companies each month - and this amount is basically pure interest. 4. She has been enslaved by this debt for almost 5 years now - she makes a large salary and still lives paycheck to paycheck. 5. She has no assets (she rents her house) except for her car which she still owes $20,000+ on. The questions I have are the following: 1. Is she a candidate for debt negotiation and if so should she do it herself or use a company? 2. If she should use a debt negotiation company can someone PLEASE recommend a good company for this? 3. Could a debt negotiation like this affect her BAR standing or professional status? Any help would be greatly appreciated and if you need more information please let me know.
Celestial, ouch! It sound like she is living beyond her means. I think a few of us were guilty of this at one time or another. I sure was. She must be driving a high end mercedes or lexus ? Close to a $1000 car note? If her credit is good right now, I would advise her to try to hang in there. Eventually the scales will tip the other way and she'll begin to dig herself out of the red. If her credit is already shot, she might want to reevaluate her financial obligations. Does she really need that expensive car? Is the first thing. Then she needs to work a deal out with the CC companies one by one so they won't try to sue her if she defaults. These negotiations firms can't do anything more than what she can do herself. Also, she won't have CCCS on her credit report which looks BAD to lenders. An 80K salary is around 3.5K per pay period after taxes (bi weekly). I might be missing something but where is the rest of her money going ? If $1200 goes to CC, how much is her rent and car payments. Is she doing further spending ? I can't see how 7K get's blown away every month with nothing to show for.
After taxes she is getting around 4k per month. She is maxing out her 401k at 15% which I am glad about (probably the only thing she is doing right financially - lol). She is basically a spendaholic - not unlike an alcoholic after a drink. It's pretty pathetic that she has made $400,000+ in the last 5 years and her bank balance is less than $1,000. So you think she should do it herself and avoid the help of a company like profina?
I think I like lb, but sometimes it seems he just posts in an effort to beat GEORGE for "top poster" honors.......
Mind you, I'm no expert, but she has got to slash her spending..NOW. If she hasn't already, she needs to cut up those credit cards, or put them in a place she can't access easily. She also needs to look at her day to day living expenses to see where she can cut. It sounds like she is definately living beyond her means. In the meantime, perhaps she should contact the CC companies and work out other payment arrangements. In the end, all they really want is their money. Perhaps they would waive some of the fees, or reduce her interest rate. If she tells them she's on the verge of going bankrupt, they WILL try to work out some sort of arrangement. To them...a little something is better than a lot of nothing. Just my opinion. I could be wrong.
Re: Re: Sister in deep - please help LB is too much of a puzzle. ====================== At lest all the pieces fit:LOL THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
Actually, IMO, sis probably needs more help than this - has she ever considered debtor's anonymous? It's a 12 step group for people who spend compulsively. That's what it sounds like. When a compulsion starts interfering with your life, it's time for serious help with the compulsion. The debt would take care of itself. If she goes through debt negotiation, her credit will be totalled in the process - these companies make it sound like they will negotiate your debt down to a small percentage of what you owe, you pay it off, and go merrily on your way, worry-free. That is ADVERTISING - not to be believed. The creditors will charge off the unpaid debt, and her credit will be toast. It doesn't matter how much money you make if your credit report says you don't pay your bills. That's what hers will say. Then the charged off debt will be sold to collection agencies, and she will have a whole new career open up to her - chasing off CA's. Credit counseling (CCCS) gets pretty much the same result, because usually one or more creditors will not agree to accept the terms, and that account will ruin her chances of rehabbing her credit afterwards. If she uses any service like this at all it should be the REAL CCCS, not one of the companies that is advertising heavily. The real CCCS does not advertise. And I doubt she will qualify for that anyway because she makes too much money. Why don't you suggest she get to the root of the real problem - the spending.
