Broke and Considering Getting a Loan - Need Advice

[llecs]

Playing devil's advocate, I bet you can get through this inside of a couple of years without BK. Once that $600 kicks in, the debt will melt. And this is assuming you never get a dime more in the future in income and your expense level stays the same. I know with some creative budgeting you can increase your income by quite a lot and decrease expenses some too.

[GregB]

BK might make sense if your credit was already damaged BUT IT ISN'T, right?. I'm assuming your FICO is still around 726. BK will be alot of stress and wasted money and will destroy your credit.

If you can get the $1800 at 17% paid off followed by the $975 before you pay 24%, then you are in pretty decent shape. Even if you get the $975 down so that you don't pay 24% on very much or for very long, you are still doing OK. GEt the $1800 paid off and then put new charges on it, while you pay others down. Make sure you PIF the next amount when due so you don't ever pay that kind of interest again.

How about skipping paying you parents for rent for another month and put it towards the high interest rate. At 1.5% per month you would already be ahead enough to matter because you save that EVERY month. It adds up.

Obviously, you need to avoid falling back into the same situation later but if you had some of them paid off before it seems you already understand the advantages.

[sobreezy]

I agree completely with the previous post of NOT filing for bankruptcy.  You are almost at the point of relief.  It just seems as if you are free falling because of the enormity of the situation.  But the big picture here is you'll be fine.  IMHO don't do the debt consolidation at 17%.  IME it just doesn't justify the end results that you're trying to achieve. 

options

1. IF you decide to take out a loan to pay off all debts things you should consider - would payments be lower than total current CC payments?  Would you get a decent interest rate (fixed or not)?

2. Keep going with the same methods you have - Ask Parents for a reprieve on rent for another month.  Make it to 7/15 and start using extra money to pay down smaller CCs while making just a little above min payments for other CCs. Or decide which CCs have a higher priority and focus on paying those down.

3. DONT FILE BANKRUPTCY!  You are still able to make payments.  You are still working.  You are still a success story in progress and by year's end there will definitely be light at the end of the tunnel. Keep at it!

[superjeep]

Thanks for all the input.  Like you said, if I could just get through the next few months I'd feel better about waiting this out and slowly paying it off.  At the same time, not having any cash and not having any credit available is causing me a ton of stress in terms of anticipating any unexpected expenses.  I've also been trying to use some debt pay off calculators to figure out what would be best.  As of today, the rate of the one loan I looked at decreased to 14.5%.  And if I took that and paid everything off at once, I'd have money to pay the loan off in just over a year.  If I kept paying each debt individually, not only would it take longer, I wonder if it would be any savings since I'm paying a lower rate but over a longer period of time.  Unfortunately, with numerous debts at different rates, it's not easy to calculate what the cheapest option would be.

[superjeep]

And, sobreezy, I'm with you, I really don't think filing bankruptcy would be a good option for me right now.  Especially at my age, 34, I fear all the negative implications that could have on me over the next 10 years (like if I got married and wanted to buy a house, etc.). 

[GregB]

You're paying an average interest rate of 7.95% now, 10.22% after the $975 goes to 24% IF you still owe $975 at that point. Paying that down before it goes to 24% is key to keeping interest rate closer to 8%.

There is no way you can accomplish "lower interest rate for longer time" with the same amount paid out in payments. If there is any fee on a new loan, that just makes it less attractive.

[Anonymous]

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@llecs wrote:

Playing devil's advocate, I bet you can get through this inside of a couple of years without BK. Once that $600 kicks in, the debt will melt. And this is assuming you never get a dime more in the future in income and your expense level stays the same. I know with some creative budgeting you can increase your income by quite a lot and decrease expenses some too.

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Seems like one heck of a waste of a good bankruptcy for only $17k in debt.

@I might also avoid a personal loan @ 17% at this time, too.  If you get a loan and pay off your credit cards, you could very well find another emergency appear and then you are over your head with CC debt and a personal loan. 

I would get credit counselling.  You might get your creditors to work with you and at the same time fix the conditions that have put you in this situation to start with.

Edit:  If you can get a NFCU CC with 0% balance transfer, THAT would be a good deal.  But you still need to work on the issues that got you to where you are now.

[superjeep]

Thanks again for everyone's input.  And O6, I appreciate your post.  It was helpful.  I wish I could say I at least got to where I am by doing some good shopping   But sadly, that's not the case   The counseling would be helpful anyway, I'm sure.