Trying to see if other alternatives

[scorepower]

Hello,

Below is our situation but trying to see what options we have if if the route we are going to take is the best one:

1) Currently with takecharge america (debt consolidation) and paid off approx 34K in credit cards debt. 

2) We have about 18 months left to pay off the remaining 24K. 

Right now we are struggling to keep our heads above water. I recently took a new job and took about a 10K reduction. We are not able to pay all our bills on time and are falling behind on everything. 

We were think of taking the following route.

1) We have cut as much from our budget as possible. Currently trying to modify our home loan but it's still a work in progress.

2) Continue the route we are going in and hope something changes (not an option).

3) Stop paying the debt consolidation and start adding in $1400 back to our income. 

Option 3 is the best option for us. I hate to do this because we borrowed the money but we are just not in a position to continue paying and have to prioritize, electricity, water, food, etc.

1) Our credit is already jacked so not really needing credit in the short term.

-We owe BoA and AMEX and Cap one. I'm concerned if we stopped paying them, will they look at garnishing our wages? Are they able to do that?

-If they charge the accounts off, how long does that stay on your record v's bankruptcy? 

Working through this forum we were able to purchase our home and had great credit, but due to other factors and us being complacent, we are in a crappy position now. Trying to turn things around but made some crappy decisions that led us in the path. 

Anyone have any suggestions, comments, etc, or maybe something i'm completly missing? Would be much appreciated.

Thanks,

Ren

[sccredit]

If I were you I would look at filing BK CH7 and be done with it.  Just my $.02

[NJTurnpike]

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@scorepower wrote:

Hello,

Below is our situation but trying to see what options we have if if the route we are going to take is the best one:

1) Currently with takecharge america (debt consolidation) and paid off approx 34K in credit cards debt. 

2) We have about 18 months left to pay off the remaining 24K. 

Right now we are struggling to keep our heads above water. I recently took a new job and took about a 10K reduction. We are not able to pay all our bills on time and are falling behind on everything. 

We were think of taking the following route.

1) We have cut as much from our budget as possible. Currently trying to modify our home loan but it's still a work in progress.

2) Continue the route we are going in and hope something changes (not an option).

3) Stop paying the debt consolidation and start adding in $1400 back to our income. 

Option 3 is the best option for us. I hate to do this because we borrowed the money but we are just not in a position to continue paying and have to prioritize, electricity, water, food, etc.

1) Our credit is already jacked so not really needing credit in the short term.

-We owe BoA and AMEX and Cap one. I'm concerned if we stopped paying them, will they look at garnishing our wages? Are they able to do that?

-If they charge the accounts off, how long does that stay on your record v's bankruptcy? 

Working through this forum we were able to purchase our home and had great credit, but due to other factors and us being complacent, we are in a crappy position now. Trying to turn things around but made some crappy decisions that led us in the path. 

Anyone have any suggestions, comments, etc, or maybe something i'm completly missing? Would be much appreciated.

Thanks,

Ren

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They have to sue you successfully first before wage garnishment becomes an issue. Even then, there are limitations on that.

I'm not sure of your family situation, but if you don't have kids, look to tough it out and tighten that budget as much as possible. A BK will hold you back for many years compared to 1 or 2 years of having to eat ramen.

As you said, you made some crappy decisions to get where you are, some of the most credit worthy people on myFico learned the hard way how to get there.

Some things to consider in tightening your budget.

Discontinue cable service and internet service.

Discontinue cell phone service or move to pre-paid texting/calling only service.

Take public transportation to work.

Discontinue any subscription based services like credit monitoring, gym, etc.

Don't eat out.

Cut back on the meat in your diet (you'll be healthier for it).

Before you leave the house for work every day turn off all your circuit breakers except to to the refridgerator.

Consider selling your car(s).

Use a spreadsheet to really hammer down your budget through the next 18 months. I have myself budgeted it out for the next 36 months and it really keeps me on track.

good luck.

[hausfrau]

I had a friend in a similar situation, she was rocking and rolling paying off her debts with a consolidation place, but took a few hard knock, and couldn't keep up with it.

She spoke directly with the CC companies and was able to arrange with them to continue a payment schedule, but at less than what she had been paying. The CC realized it was a better option to work with her during the hard times than to CO the debt and possibly never recoup the loss.

[LS2982]

I think BK would be worse. Just tough it out and pay your debts. Its the right thing to do.

[sccredit]

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@LS2982 wrote:
I think BK would be worse. Just tough it out and pay your debts. Its the right thing to do.

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The right thing to do sometimes just isn't feasible.  OP has obviously been trying to do the "right thing" for a long time and simply cannot do it anymore.

Sometimes BK is about much more than the financial strain on someone.  The mental and emotional drain has an effect that far exceeds the financial strain.

On top of that the OP can have a credit card shortly after discharge and be a prime borrower with a 700+ score in 24-36 months.  Why sit and worry about whether someone is going to sue you and chase you down for the money?  Why stay up at night worrying?

[NJTurnpike]

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@sccredit wrote:

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@LS2982 wrote:
I think BK would be worse. Just tough it out and pay your debts. Its the right thing to do.

---

The right thing to do sometimes just isn't feasible.  OP has obviously been trying to do the "right thing" for a long time and simply cannot do it anymore.

Sometimes BK is about much more than the financial strain on someone.  The mental and emotional drain has an effect that far exceeds the financial strain.

On top of that the OP can have a credit card shortly after discharge and be a prime borrower with a 700+ score in 24-36 months.  Why sit and worry about whether someone is going to sue you and chase you down for the money?  Why stay up at night worrying?

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I'm on the fence about this one. Sometimes a BK is the way to go, but only as a last resort. When it comes to dealing with mortgage and CCC's, its a business/economic obligation, not a moral obligation to pay your debts to them. when it comes to deciding between fulfilling that obligation and defaulting, you have to very carefully weight the two options against your own personal situation.

I almost always aire on the side of toughing it out, but if its putting your health/marriage/career in jepordy, consider the BK option and accept the consequences that come with it.

[scorepower]

thank you all the feedback. This is good info.

I definetly screwed up but need to make things better for myself and my family. I prefer not to do bankruptcy but can see some much needed relief through not paying the cc cards right now. 

As someone stated, i will look at negotiating with the creditors to see what we can come up with. 

Thanks

[enharu]

Try talking to an attorney to discuss your options for BK or try to have your debt negotiated. At least you have all options explored.

You might be blacklisted by the lenders but that's probably the least of your concern now.

[crunching_numbers]

This may seem harsh, but maybe a second job for a while to bring in more cash. NJ turnpike's suggestions, as well as selling off whatever you can to pay bills.
You have created a mess, and now you have to deal with some discomfort FOR A FINITE TIME to fix everything. You have made progress. Keep up the good work and don't quit.