topic Re: Big CC debt, no current job, running out of funds -- need to buy time in Personal Finance

Big CC debt, no current job, running out of funds -- need to buy time

Anonymous — Tue, 31 Dec 2019 17:20:02 GMT

Newbie to the boards, and embarrassed to be here. Seeking advice on what to do...

Stats :

54 years old, wife is 60.

I was laid off from my job about 15 months ago, sold our house about 8 months ago. Downsized into an RV. Tried for work in FL, GA, NV, AZ so now getting training for a (hopefully) lucrative self employed career. Need about 2--3 more months to be knowledgeable enough to go out on my own.

Approx $96k of CC debt (avg of ~20% interest)

Approx $3500 min pymts incl $1500/mth interest --- no late or missed payments YET

Approx $1200/mth in monthly expenses not including CCs

Have been using the equity from the sale of our house, and some IRA early withdrawals to pay mthly bills

Scores vary between 590 and 670 depending on CRA and scoring method

Only current income is wife's SSA (survivor benefit) of $1200/mth

Running out of funds in my IRA (about 3 months left at our current rate)

Questions :

Should we look into getting a third party to negotiate a deal with our CCs? (Obviously with such a small verifiable current income, we wouldn't get very far with a consolidation loan.)

Should I reach out to them myself to request a "3--6 month stay" on my accounts? (Is there even such a thing?)

Want to avoid the score hit of bankruptcy, of course. I just need some time.... we are completely willing to work with the CC companies if they are willing to work with us.

Thoughts and feedback pls? Thx in advance!

Re: Big CC debt, no current job, running out of funds -- need to buy time

Anonymous — Tue, 31 Dec 2019 17:39:06 GMT

Welcome. Sorry to hear about your struggles.

My first question would be: how confident are you that this new career you are in training for will be lucrative (and more importantly, lucrative from day #1)? What is the career, if you don’t mind me asking?

The reason I start with this is because a clear, realistic picture of the future will allow you (and us offering advice) to formulate an appropriate course of action.

I wish you the best!

Re: Big CC debt, no current job, running out of funds -- need to buy time

Anonymous — Tue, 31 Dec 2019 18:07:16 GMT

Whilst researching the RV lifestyle, one issue that came up consistently was the shortage of RV technicians nationwide. I've always been technically-minded so this field suits me better than my previous career of warehouse management. My mentor has been doing this for 3 yrs now and is showing me the ropes at no charge. Once I go out on my own, my initial goal is to have 15 billable hours per week and that will keep us afloat after taxes and other operating expenses are slotted away.

Re: Big CC debt, no current job, running out of funds -- need to buy time

Anonymous — Tue, 31 Dec 2019 18:26:18 GMT

Well, good luck. It’s always awesome when you can do something you enjoy.

I’d caution that the type of field you are trying to enter, especially as an independent / self employed technician, can sometimes be slow to start and inconsistent. Your trade will cater to a very niche market (few people own RVs) and is heavily dependent on reputation, word of mouth, and referrals. Just be sure you have a realistic expectation.

To answer some of your questions:
Yes, you can call your lenders and ask if they have a hardship program you can enter Into. Some do, some don’t. This program can lower your interest rates for x number of months and get the debt paid off.

While I won’t go so far as to suggest Bankruptcy, it shouldn’t be an option you eliminate without thought. Yes, it will lower scores initially, but they can rebound quickly - quicker than dragging out debt you can’t afford on your own. $90k + in debt is no little thing.

Like I said, good luck. Others will be along with their advice too.

Re: Big CC debt, no current job, running out of funds -- need to buy time

Revelate — Tue, 31 Dec 2019 21:19:28 GMT

Welcome to the forums!

Negotiated settlements often have a scoring penalty as well, and your scores aren't pristine currently so any hit might not be as bad as you fear.

I likewise wouldn't chuck out the BK option immediately, but what you didn't mention was how much equity you have left from the sale of your place. If there's enough to airstrike the debt or even most of it, go do that.

If there's not, bleck. Outflows are 3x your inflows and that's just minimum payment style... depending when you think you're going to get additional income is the other deciding factor, but I think you should keep all options on the table. In your shoes I'd probably be exploring the BK option personally.

Re: Big CC debt, no current job, running out of funds -- need to buy time

CreditInspired — Wed, 01 Jan 2020 00:31:48 GMT

Hi OP and welcome to myFICO

Your burden is heavy and I admire your gumption to try your damnest to make this unfortunate situation work. However, $90K is a boatload of debt to overcome and my hope is that you think really hard about throwing all your remaining monies at the interest on your credit cards.

Sometimes one has to make the hard decision to go the BK route because it may be the only way you can breathe again. Before making a decision to not go the BK route, I implore you to visit the BK forum, which I have provided the link https://ficoforums.myfico.com/t5/Bankruptcy/bd-p/bankruptcy

You will find that one of the mistakes some members wish they had not done was to delay filing BK. Also there is a lot of good read there. Our very own CL @pizza1, has put together a fabulous guide to assist those when/if they make the decision to go further.

One thing I do want to say is please, please, please don't feel or be embarassed, especially about circumstances beyond your control. Many of us on this forum has filed BK. I'm one of them. You can and will get back on your feet again.

The reason I hope you rethink BK is because I dont want you to deplete all your remaining funds before your new career gets off the ground just to realize that the end result might still have to be file BK.

So, yes, first see if CC companies will work with you on decreasing your interest to a single digit APR and ask about any hardship programs offered. Then, if these two things are not promising, consider BK.

And fair warning--do NOT pay any company (who promises to help you) hundreds of dollars. You can do the work yourself.

GL2U