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Creditaddict, that was probably the most helpful post for someone enduring hard times that I have read in a long time!
@Creditaddict wrote:A few things... Don't give up yet:
1. Stop applying for loans, you can't make minimum credit card payments, high-interest loans are going to be higher payments and you are just racking up inquiries and frustrations.... stop applying.
2. Sync is probably one of the most confusing but EASIEST bank to default with and get help! Here is the process and you can do it without even hurting your credit!
Take 1 credit card at a time and remember just because they are all sync, each will be handled differently and many times even by different departments, so just always deal with 1 at a time unless they happen to mention if you want to work out something with another one too and the rep was nice and just helped you then sure, but otherwise don't even mention them.
Okay, so here we go.
1. Miss your payment.
2. Wait 2 days... Call and ask for a "FINANCIAL HARDSHIP PROGRAM" (With Sync this means they close your card for charging, reduce your interest rate to 0-10% and minimum payment from $8-$35 or so dollars depending on balance (maybe slightly more if you owe several thousands on a card) *** something to note, while Sync closing the account to charging, my experience is they still reported the accounts open on my credit report until I finished paying it off as to not hurt my credit further with a closed account with high balance.
3. sometimes right away, no hardship available... just say thanks and hang up and put that account in your calendar to call back at 31 days. (keep in mine it will not report to your credit report as late until you are actually 62 days delinquent with Sync and that is actually about the time your account hits 3 months behind in payments (there internal time line of delinquent is nearly a month shorter then you are actually delinquent so you have almost 90 days from first due date that you missed to get a hardship without ANYTHING negative being reported on credit and as you get later and later if you have to wait it out, they can give you the exact date that it will report!
4. Despite that you are talking to a hardship specialist and some are nice and some are not... don't confuse a nice one with over sharing info... they are still like all other sync reps and have a computer screen in front of them that asks questions and doesn't have a space for them to input your story, just your numbers.
Regardless of if you are running a negative cash flow each month, if you want a hardship program, your money needs to end with a positive each month (I would suggest at least $100-$200 left over after you give your answers... no cash flow, they won't help you... I know that doesn't make a lot of sense but it's a computer system.
keep it simple and know your numbers you are going to give before you call.
I make $2000 month
I don't think that is going to change over the next 12 months
I don't think I can make more in the next 12 months
I pay rent of $500
Car of $500
Insurance of $200
OTHER BILLS and living $500
That leaves me $300
Don't go into detail... short and sweet!!!
Now let us say 1 card you can't get a hardship offer to populate until month 2... so now you are behind in payments by say $200 and they set you up on hardship for $50/month... They will not make you bring your card current again but the trick is to start the hardship payments at $50 and then you go in yourself and make the 1 time payment of $150 and put your account current and under the credit limit and then just keep up your hardship payments and you will be good on that account and your credit will not only not suffer but start to improve with the payments that are mostly going to principle.
As each account goes a payment late, repeat the process... if you get a no, just put it in your calendar to call back at 31 days, 45 days, 61 days.
Even though same bank, you will be surprised that you probably will not see adverse actions on any of your other sync cards even if you set up hardship on a different sync card... but in my experience the hardship program offered me 12-month payments that were 1/4 of my current minimum payments!!
Try to do that before you completely walk away from paying them at all!
Great advice Creditaddict!!!!
@Creditaddict wrote:A few things... Don't give up yet:
1. Stop applying for loans, you can't make minimum credit card payments, high-interest loans are going to be higher payments and you are just racking up inquiries and frustrations.... stop applying.
2. Sync is probably one of the most confusing but EASIEST bank to default with and get help! Here is the process and you can do it without even hurting your credit!
Take 1 credit card at a time and remember just because they are all sync, each will be handled differently and many times even by different departments, so just always deal with 1 at a time unless they happen to mention if you want to work out something with another one too and the rep was nice and just helped you then sure, but otherwise don't even mention them.
Okay, so here we go.
1. Miss your payment.
2. Wait 2 days... Call and ask for a "FINANCIAL HARDSHIP PROGRAM" (With Sync this means they close your card for charging, reduce your interest rate to 0-10% and minimum payment from $8-$35 or so dollars depending on balance (maybe slightly more if you owe several thousands on a card) *** something to note, while Sync closing the account to charging, my experience is they still reported the accounts open on my credit report until I finished paying it off as to not hurt my credit further with a closed account with high balance.
3. sometimes right away, no hardship available... just say thanks and hang up and put that account in your calendar to call back at 31 days. (keep in mine it will not report to your credit report as late until you are actually 62 days delinquent with Sync and that is actually about the time your account hits 3 months behind in payments (there internal time line of delinquent is nearly a month shorter then you are actually delinquent so you have almost 90 days from first due date that you missed to get a hardship without ANYTHING negative being reported on credit and as you get later and later if you have to wait it out, they can give you the exact date that it will report!
4. Despite that you are talking to a hardship specialist and some are nice and some are not... don't confuse a nice one with over sharing info... they are still like all other sync reps and have a computer screen in front of them that asks questions and doesn't have a space for them to input your story, just your numbers.
Regardless of if you are running a negative cash flow each month, if you want a hardship program, your money needs to end with a positive each month (I would suggest at least $100-$200 left over after you give your answers... no cash flow, they won't help you... I know that doesn't make a lot of sense but it's a computer system.
keep it simple and know your numbers you are going to give before you call.
I make $2000 month
I don't think that is going to change over the next 12 months
I don't think I can make more in the next 12 months
I pay rent of $500
Car of $500
Insurance of $200
OTHER BILLS and living $500
That leaves me $300
Don't go into detail... short and sweet!!!
Now let us say 1 card you can't get a hardship offer to populate until month 2... so now you are behind in payments by say $200 and they set you up on hardship for $50/month... They will not make you bring your card current again but the trick is to start the hardship payments at $50 and then you go in yourself and make the 1 time payment of $150 and put your account current and under the credit limit and then just keep up your hardship payments and you will be good on that account and your credit will not only not suffer but start to improve with the payments that are mostly going to principle.
As each account goes a payment late, repeat the process... if you get a no, just put it in your calendar to call back at 31 days, 45 days, 61 days.
Even though same bank, you will be surprised that you probably will not see adverse actions on any of your other sync cards even if you set up hardship on a different sync card... but in my experience the hardship program offered me 12-month payments that were 1/4 of my current minimum payments!!
Try to do that before you completely walk away from paying them at all!
Wow, that is awesome! OP this sounds like great advice. I'm new, but I agree with most that you should stay on the forum for advice like this. I only wish I'd heard something like this before BK.
I'll just add that other than what has already been posted (advice and well wishes), it would seem to me that now is the time you'd get the most out of this forum. "Attaboy's" of new credit cards are fine (and kind of boring), but I thin k most people land on MyFico when they are having problems rather than showing up with triple 8's to brag (well other than those pesky "black card" posers).
Those of us that have followed the advice, leads, stories of success are the ones that have come out of bankrupcy, or seen our business fail, or just over spent and found their lives turned upside down by unemployment, medical issues, or domestic break ups. It's a process, and in many cases its a 7-10 year process to fully recover and it just seems to me that shutting the door on a whole lot of folks that have been there and can relate, is not the way to go.
Personally I owned and managed a small business that I grew from nothing but an idea to a 7 figure grossing success, including the 7 days a week 12-14 hour days - no vacations, no time off for 18 years and then it all crashed and burned with zreo income, lots of debt, no chance for anyone hiring me after a 20 year "zero employment history" and being over 50 years old, that was followed by a wonderful IRS audit that went back 10 years and a home eqiuity loan that decided my 2.5% interest $40k loan was not good enough and when I could not quality for a fixed term 8.75% loan that more than tripled my payment - a payment that had never been late - they "forelosed" and started refusing my payments - house was to be auctioned 1 week before Christmas on my DW's birthday.
Today, my wife and I both have credit scores in the high 700's to low 800's, well over $300k in available revolving credit, utility under 5%, and income in the lower 6 figure range. There are still some scars left just to remind us that good times are better than bad, but without the bad we don't realize the good.
This forum, more reading than contributing (you can see my post count vrs the time I've been on here) helped keep the faith and helped in the rebuilds and helped in the "never give up" attitude.
Again, if you choose to go, I wish you the best - but I think you will be best served not by pity, but the shared experience that MyFico can offer especially for down times. I really don't care about the attaboys when you are on top of the world, I'd much rather reserve the congrats for when you turn it all around, even if that includes recovering from bankruptcy but I don't really think you are there yet.
If you have investors, its probably best to talk to them about whats going on. Call a meeting and be open about the business stands and what should be done next. I would suggest taking CA advice but if that doesnt help, talk to the investors and decide on if filing bankruptcy will be best. Its better than leaving investors in the dust about it and most will generally understand.
@dariusc93 wrote:If you have investors, its probably best to talk to them about whats going on. Call a meeting and be open about the business stands and what should be done next. I would suggest taking CA advice but if that doesnt help, talk to the investors and decide on if filing bankruptcy will be best. Its better than leaving investors in the dust about it and most will generally understand.
I agree with talking with your investors. They'll see they are trying your best to keep things afloat. Maybe they never realized how bad it is and they need to step it up on their end (finding new customers, doing more on the marketing side, or even putting in more $$$). It would be wonderful if your investors can pay off the equipment/vehicle loans and that extra money they put in count as venture debt so when the business does turnaround they can get their money back with interest. Worst case scenario, they have a securitized interest in the equipment and get some money back in worst case scenario.
If I was an investor I'd appreciate you coming to me and being forthcoming with the situation.
To the OP, please don't give up. I'd start with your investors. If nothing else for the interest of protecting their investment, see if you can give up additional equity in exchange for salary up front, and use it to make your CC payments. If possible, bring on new investors even. That would be an option to start. The suggestions here are also great. I'm not familiar with CC hardship programs, but that is an option to explore and you should look into it.
The name of the game in hard times is to focus on cash flow. Try to break that debt down and look at it as a business problem with the emotion out of the equation. You're a businessman so take this to heart. I detach from emotion on anything financial no matter what. I struggled in business and in my personal finances to the point where I literally went numb to it as a coping mechanism. Then I realized that my body was automatically doing what my mind wouldn't let it....zone out and focus on the problem without the fear.
First look at your business and how you can increase revenue. More pitches for accounts, more profitable add on services, clever ways to save fuel, additional investors, anything to build more business to pay yourself more. Then look into hardship programs and see what resources are available to you. What you have incurred are personal start up costs and you are not alone in that. Many are in this exact same position every day. The key is to stay at it. If you are familiar with Hal Moore, and if not just google him. He instilled a great principle in his unit in Vietnam...Three Strikes and you are NOT OUT. There is always another option. The sheer will to keep thinking, moving and solving the problem can pay off when you least expect it.
Stay on the board. I just discovered this place myself and if ever in a really hard time with credit, I think I would live here. So many experienced people willing to help without judgement. Lean on us and see this through. Best of luck!