Might need Debt Consolidation help

[Anonymous]

Okay so I'm asking this for my Dad. He had bad credit for a LONG time and only in the last couple years completed rebuilding. In the last few months he's had to stop working because he has been sick and getting on in age (he's a carpenter).

Because he was working he was able to pay his cards down with no issues but now his only income is social security but he needs to pay rent among other things along with credit card debt.

His current score is 750 (probably would be higher but is above 30% UT on 2 cards). His overall UT though it about 15%.

His CL combined is $40,000
Of that about $6,800 is used out of his 16 credit accounts. He doesn't want to get trapped in a situation where he's making payments which cover just a little more than interest you know?

So far I'm thinking his only options are a low interest debt consolidation loan or bankruptcy. But he's worked so hard to get to where he is now with his credit that it would be heartbreaking to have to file for bankruptcy especially at age 69.

What are your thoughts? (Hopefully elders can chime in here).

[Anonymous]

Have you researched balance transferring? My uncle was in a situation similar to your fathers, and he transferred his 4500 in debt to a 12 month 0% BT card, and at month 11 he did the same exact thing. It took him almost two years to pay off his balance, but he didnt pay a dime in interest while doing it.

He can also see if he can take out a low interest personal loan through his bank or credit union to pay off the cards.

I only offer these opinions because I feel like the end game here is to avoid paying a high APR on a long term debt payment

[Anonymous]

That's pretty much what we're hoping for he's really stressed and overwhelmed because of it and it's not helping him get better.

The cards with a 0% BT usually have a 3-5% fee though which is a big downside.

[Anonymous]

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@Anonymous wrote:
That's pretty much what we're hoping for he's really stressed and overwhelmed because of it and it's not helping him get better.

The cards with a 0% BT usually have a 3-5% fee though which is a big downside.

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OK, lets look at some actual numbers:

A $10K balance at 18% interest will cost you $150 per month - $1800 over the course of a year.

A $10K balance transfer at 3% will have a one time cost of $300, and will save you $1800 in interest over 12 months. 1800 minus 300 equals 1500 net savings.

Seems like a pretty small "downside" to me.

[cjane1]

Chase Slate is 0 interest for 15 months with no transfer fee, also try Citi card they have the same offer if not better.

[Anonymous]

About half his debt is with Chase and I already checked they don't do balance transfers from a Chase account to the Slate card but my SO has the Slate card and we love it because we charge what we need to it and no interest for a while.

[Anonymous]

I don't even think you CAN file bankruptcy for $6800, so that's not going to be the answer.  Can he afford the minimum payments?  $6800 is not an insurmountable amount of debt, it may seem so right now, but he can get out of it.  I'm a huge fan of the snowball or avalanche.  Pay the minimums on everything except one card which you pay extra, when that's paid off add that amount to the next one.  And keep going.....  A balance transfer to 0% would be ideal.  Capital 1 QS gave me a 0% balance transfer for 18 months....I would check on that.

[Anonymous]

You can file bankruptcy on even $2,000, is it advisable? Probably not, but if you can't pay you can't pay and dealing with collections and judgements causes a lot of stress and anxiety.

$6,800 isn't too crazy but it seems overwhelming to him at the moment. He can pay the minimum but it's about the same as the interest rate he has so it'll barely be scratching the surface each month

So no one thinks a debt consolidation loan would be a good option it would be better to BT? And what are the approval odds for a BT card with at least a 7-8k CL with low income but good credit scores that's another issue.

[IantoJones]

I don't know their income requirements, but LendingPoint offers debt consolidation loans to people with 600-680 FICO.

Been around for about two years, decent (4 out of five star) user reviews, uses alternative qualifications (more data than just FICO).

They have soft-pull to see your offers and rates.

Might be worth looking into?

They offer 2-3 year repayment schedules, so your dad would at least have an end in sight?

[Anonymous]

Is this even a question?  I mean seriously a balance transfer is the only way to go here.  Ok he can't do chase but there have been other suggestions as far as cards go for balance tranfers right here in your thread.  Its the cheapest alternative.  

Hope your father gets well soon.  Prayers sent