Alternatives to filing for bankruptcy...?

Anonymous · ‎01-20-2018

So since my divorce a few years ago, my credit card balances have grown to unmanageable amount. I'm paying minimum payments (always transferring balances back and forth for 0% offers) but the minimum payments ($750 or so / month) are exceeding my budget. So each month, if something new comes in.i.e. a car tax bill, kid needs cleats, school trip, etc., that extra expense gets put on a credit card. If i didn't have that $750 credit card bill, i would be in a good position.

I've thought about filing for bankruptcy, but..... feel a little bit like it's not the right thing to do...I also dont' want to completely screw up my credit that i've worked hard for.

Has anyone contacted the credit cards and let them know you are contemplating bankruptcy but would prefer to pay a portion instead and had any luck with credit card companies writing off much of the balance to take a portion?

thanks!!

bourgogne · ‎01-20-2018

@Anonymous wrote:
So since my divorce a few years ago, my credit card balances have grown to unmanageable amount. I'm paying minimum payments (always transferring balances back and forth for 0% offers) but the minimum payments ($750 or so / month) are exceeding my budget. So each month, if something new comes in.i.e. a car tax bill, kid needs cleats, school trip, etc., that extra expense gets put on a credit card. If i didn't have that $750 credit card bill, i would be in a good position.
I've thought about filing for bankruptcy, but..... feel a little bit like it's not the right thing to do...I also dont' want to completely screw up my credit that i've worked hard for.
Has anyone contacted the credit cards and let them know you are contemplating bankruptcy but would prefer to pay a portion instead and had any luck with credit card companies writing off much of the balance to take a portion?

thanks!!

Hi, sorry for what you are faced with. put your cards on the table so to speak; limit / balance / APR - let see what you got. also inc your take home, support, rent, etc.

Anonymous · ‎01-20-2018

You know your financial situation better than any of us so hard to give advice on whether to file BK or not. It makes perfect sense for some and makes no sense for others. Stays on credit. Have to report youbfiled bankruptcy on most job applications or at least comes up on background checks.

As to whether you can pay a portion of the debt and the creditor forgive the rest while your account is completely current. There is less than a 0% chance they will accept that. You telling them that you may file bankruptcy won’t get them to do that either. Settlements are done thevmore in default you become.

You can however ask them to reduce your interest rate and you may get that. Or if they won’t you can hire a not for profit credit cOunseling agency. They typically can get you single digit interest rates. Don’t fall for the debt settlement company stuff, they charge excessive fees for service you can donyourself.

marty56 · ‎01-21-2018

A DMP program can reduce interest rates but you have to PIF within 5 years so the payments could be more than you are paying now.

1/25/2021: FICO 850 EQ 848 TU 847 EX

Anonymous · ‎01-21-2018

Take home income/month $2500

child support/month $980

Total income $3480

Expenses

Mortage $1320

Car Insurance $60

Health Insurance $225

Cell phones (3) $200

Phone/Internet/TV $175

Electric $100

Oil $200

Orthodontist $60

Car Payment $155

Credit card 1 $115 (2k balance) 1%

Credit Card 2 $60 (1k balance) 0%

Credit Card 3 $200 (5k balance) 10%

Credit Card 4 $170 (8k balance) 0%

Credit Card 5 $180 (7k balance) 0%

Attorney $50 (2k balance) 0%

Gas is usually $200 / month

Groceries are usually $500-600/month

bourgogne · ‎01-21-2018

@Anonymous wrote:
Take home income/month $2500
child support/month    $980
Total income $3480

Expenses
Mortage $1320
Car Insurance    $60
Health Insurance    $225
Cell phones (3) $200
Phone/Internet/TV $175
Electric $100
Oil    $200
Orthodontist    $60
Car Payment $155
Credit card 1    $115 (2k balance) 1%
Credit Card 2    $60 (1k balance) 0%
Credit Card 3    $200 (5k balance)    10%
Credit Card 4    $170 (8k balance) 0%
Credit Card 5 $180 (7k balance)    0%
Attorney $50 (2k balance) 0%
Gas is usually $200 / month
Groceries are usually $500-600/month

just waking up so give me some rope here but your card debt is $25K and your monthly outgo is $3.2K. you are totally underwater here. what are the %#s, they are not apr. sorry, moving slow

marty56 · ‎01-21-2018

A DMP program could cut your CC payments from about 725 to 400 if they could all be reduced to 0% interest over 5 years saving you about 300 a month. You could also maybe cut some off the cable and phone bill too.

1/25/2021: FICO 850 EQ 848 TU 847 EX

Anonymous · ‎01-21-2018

Only one of my credit cards right now is charging interest. 10% on the one, the rest are 0 or 1%.

Anonymous · ‎01-21-2018

Oh I see that now. With basically all your cards going from 0% to likely 15% or higher after promotional rate you will like see a sharp increase in your monthly payment. Even if you ask them to reduce your interest rate after your promotion they likely won’t or will only drop it 2-3%. So will still be looking at much higher payments. A DMP may be your only option for long term reduced interest rates, however I know with those programs they close your card.

bourgogne · ‎01-21-2018

@Anonymous wrote:
Only one of my credit cards right now is charging interest. 10% on the one, the rest are 0 or 1%.

wow so this is best case now huh, what is your equity situation in the house and who is the loan through?