I am currently 30-50 days past due on most of my credit cards. My total debt is about $40K (on credit cards). I am maxed out on my home (the equity) and have no more equity to take out. My bank is trying to help me but I only have about 8 1/2 years to pay on my 1st mortgage w/a 4.5% int rate. They are proposing a porfolio loan based on 30 years that would have a much higher interest rate to pay off my credit card debt. I have 2 home equity loans that are in good standing. (which I took out to pay off credit cards in the past - I never learn) I was late a couple times on my home mortgage and made credit card payments rather than focusing on my mortgage. Those late payments really hurt my credit. I should have been late on the CC payments vs house payment in hind site. I was stupid too let myself get this far under and stupid to use my credit cards like I did. After doing some research on the web it appears as if I can make some arrangments with my creditors to pay them back. My cash flow at this time isn't sufficent to make all the payments though. I have taken many positive steps by changing our families spending habits. I've taken on a second job. We are getting rid of our toys (boat & camper - both paid off) We will be downsizing our vehicles too. Cable TV gone...Internet and cell phone will most likely stay though. The above items will provide some cash to make good on some of my debts (but not enough) I want to wait for spring to get a little closer so I don't end up giving away my "toys" as they are seasonal items. What should I do in the mean time? Phone calls from all the creditors are coming in daily. Some of the CC accounts have now gone over the credit limit due to late fees and interest. Should I close all the accounts and write them letter to tell them I plan to pay them off? We at one point thought about bankruptcy so we can keep our house. Any ideas? Another thing is that I am in the guard and have to deploy in April for about a month. I would like to get going on these problems but don't really know how to start. I hate to leave my wife with a bunch of calls. I have read the forums but haven't seen anyone in the beginning stages such as I, or at least I missed it. I am confident that my credit can be repaired in the next few years. Last credit report my credit was 582, before all the late CC accts. It's gonna get worse before it gets better. Thanks SJ
I'm not sure where to start. If you aren't going to learn, maybe you could start learning how to live in a refrigerator box. Read some of the threads where people have let their debts get to the point that junk debt buyer is after them. That won't happen to you, of course, you've got a home to take. Is there a way you could eat beans and rice and make things work? You mean you cannot cover the mins? That's bad. Get the most you can get, but for most people, I bet, it's their day to day that burns up their income. I mean it about the rice and beans.
Obviously you are military, but with 40K in debt, maxed out debt load on your home, a 2nd job, which you won't be able to maintain when you deploy, and not able to make minimums now. I would at least explore BK options with a good attorney, one who hopefully understands or can advise you how or if it might hinder advancement opportunities in the military.
If you do go the BK route, just remember that you can't do it again for 10 years. I would seriously consider the BK route at this point. If you have any sort of security clearance, it could be at risk with a debt load/predicament like you've described. At least after a BK, you're not nearly as vulnerable to, um, distraction. If you're serious about cleaning up your act, and not just getting away from the current crop of bill collectors, you might try a little personal counseling to see why you need to have more than you can afford. Otherwise, you'll just be back here in 5 yrs looking for ways to get out of a similar situation but without the BK option. The good thing is the Military has a lot of support available for these sorts of problems. Even if it impacts your career (and I think the odds of that are low if you treat the BK as part of an overall "cleaning up your act" effort) it'll be worth it in the long run. I'm not sure if you should apprise your chain of command or not. It's been a long time since I served, but you might talk to your JAG about that, first. I would think that if you came clean about your situation and your steps to correct it (assuming you're correcting it), you'd be off the hook and they might even cut you some slack. Then again, they might give you an Article 15, if they have an ax to grind, hence my suggestion to talk to your JAG, first.
Good advice. If you do have a security clearance, talk to your security officer first. The main thing is to be honest, but there are times when a bankruptcy will cost you your clearance. Going to JAG is a good idea, also.
Bankruptcy is the only alternative I see unless you let everything charge-off and settle for as low as possible.
