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Defeated - Any Help, Ideas or Suggestions?

Total80sKid
Valued Contributor

Defeated - Any Help, Ideas or Suggestions?

Hey guys!

 

Long time, no talk!

 

I want to start out by saying I already know that I got myself in this situation by my own actions. I am back here looking for any ideas or suggestions as to what I should do next, not a scolding or 'I should have done this or that.' I take 100% responsibility for my actions and know that I am not a good candidate for credit at this ppoint, nor am I wanting any for a very long time.

 

Maybe by the time I hit 50 I will have learned.

 

I could post a super long post, but my ADD won't allow me and I don't want anyone here to have to read a novel. Hopefully I will post my issues here with a somewhat easy way to read/follow. I am desperate for advice as to what I should do from right now forward. Here are my main issues that I really need some advice about. It all mainly pertains to my PenFed accounts:

 

- I had to default on 99% of my credit cards after maxing them out.

- I am in debt roughly $70,000.

- My current income is roughly $900 a month - On disability

- The only things I am paying on are all of my PenFed accounts.

  - Power Cash Card: $7,500 - Monthly payment is around $155+

  - Promise Card: $10,500 - Monthly payment is around $220+

  - PLOC: $1,000 - Montly payment is around: $25

  - Used Auto Loan: $7,100 - Monthly payment is around $205 - Still owed: $3,828 - 1.5yrs of the 3yr loan have been paid

 

I am wondering what to do. With my current income, I am paying roughly $600 to PenFed. I can't keep my credit cards from going over every month, because as soon as I pay the min. the interest get's added in and I'm over. Wash and repeat.

 

I need the car and can afford that payment. I am halfway through a 3yr used auto loan with it. I owe roughly $3,800 on it.

 

Now I am assuming most will say I should file for bankruptcy. Not sure, as I know nothing about it.

 

I have been trying to do my own research and can't get clear answers aside from me needing to contact a lawyer. Again, a $$ issue, but if I need to file bankruptcy, I will come up with the roughly $300? fee it costs to do so.

 

Now my main worry out of everything here is my car. I know you can't pick and choose what you file bankruptcy on and I am not sure what PenFed's rules are regarding defaulting on certain loans, yet still paying on time the auto loan.

 

If i need to file for bankruptcy, can I keep my car? Even if all of my other PenFed accounts are included for the bankruptcy?

 

I live in California, by the way, as I know every state has their own laws.

 

I am so sorry to anyone reading this who took interest in my quick rise from no credit and a score around 500 back in May of 2017, to scores just under 800 and over $70k in credit by July/August of 2017. I feel horrible. Life happened. The loss of a loved one, etc, but again, no excuses.

 

Also, Discover has served me, over a month ago and there was no date to respond by or anything, not sure what to do about that. I owe them around $11k.

 

If anyone can offer tips or suggestions as to what I should do, I would be beyond grateful. It took me months to come on here and admit my issues, but I am a human being and we all make mistakes.

 

Thank you again to everyone who followed my journey and to anyone who can offer friendly advice.

Tony

 

Message 1 of 22
21 REPLIES 21
Shooting-For-800
Senior Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

Seems like Ch 7 would be a good option.

 

Most states allow you to keep either a house or low valued car or “wild card” or a combo of the three.

 

Ch 7 works for honest people with low income, few assets, and a lot of honesty.

 

Many have been there.  It exists for a reason.

 

Most that have declared wish they had not waited so long.

 

I would stop paying any unsecured debt and start saving CASH.

 

With your income a debt, I see no other real options.

 

GL!

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $400k unsecured credit in 2021.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

5% Rotating - Discover                         5%-20% - Amazon & Lowes                   3-6% Groceries - NFCU & Amex Preferred
3-5% Gas - NFCU & Ducks Unl            4% Dining & Entertain - Savor               3% Travel & Hotels - Flagship, Propel, & Uber
2% Everything - Flagship, Synchrony, Evergreen, & Venture



Message 2 of 22
FireMedic1
Super Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

Welcome back. Sorry this happened. Look at it this way. If you paid the minimuns with your income and the total debt you have. It would take 20 years or more to pay it all back. You can keep your car since its an afforable payment. Dont know how that CU works on reaffirmations. But I guess you know the answer. Look into BK lawyers in your area and get advice from them on the best path to go from here. You've seen how many have recovered after BK. Its a tough choice. Only you know what will be best thing to do to get out of this situation. Best of Luck!





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 3 of 22
Morpho
Valued Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

Your situation is a little more complicated than that because you have credit card debt and a car loan with a credit union. Normally in chapter 7 you can get rid of all the credit card debt and kept the car and make payments. (This is an oversimplification but you get the general point).

 

But since you bank is a credit union they could invoke the cross collateralization clause. You need a bankruptcy lawyer. (Preferably one familiar with credit unions). Almost every bankruptcy lawyer will give you a free consultation. It will last an about hour. Take notes. If you decide to file you will stop paying your bills anyway, 1-2 months of not paying your bills and you should have enough to cover lawyer cost and court fees.

 

Read this explanation from Nolo. They give an example that is exactly like your situation. It will all become clear after reading this.

 

https://www.nolo.com/legal-encyclopedia/credit-union-cross-collateralization-bankruptcy.html

Message 4 of 22
Total80sKid
Valued Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

Thank you for that info and link, @Morpho and to the other posters above.

 

Will get to reading that link in a bit.

 

This is what I was worried about. Having the car loan with a bunch of other loans from the same credit union. *sigh*.

 

If that's the case, I will have to just keep paying the minimums on everything PenFed for the next year and a half until the car is paid off. I will have no other choice. I can't lose my car.

 

Hopefully it can all be worked out.

Message 5 of 22
Total80sKid
Valued Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

Oh, geez.

 

Just read the article.

 

If that clause is in my auto loan contract, they can take it even if paid off. Wow.

 

Lawyers scare me. Have no idea who to trust, can't rely on yelp and their false negative/positive reviews, etc.

 

Wouldn't even know where to start to find one that is trustworthy. This is another reason I have put this off for over 6 months. With my anxiety issues, I deal with stress poorly. The stressor will come into my life and I can somehow just put it out of my mind and not deal with it. I hate that I can do that. This does need to be dealt with, but it all just seems so overwhelming to me.

Message 6 of 22
Shooting-For-800
Senior Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

You might be better off selling the car and buying a $1000 car to get you by before you file.

 

Once that car is sold, it is done.

 

Just a thought.

 

Your stress level can be completely different in less than a year.

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $400k unsecured credit in 2021.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

5% Rotating - Discover                         5%-20% - Amazon & Lowes                   3-6% Groceries - NFCU & Amex Preferred
3-5% Gas - NFCU & Ducks Unl            4% Dining & Entertain - Savor               3% Travel & Hotels - Flagship, Propel, & Uber
2% Everything - Flagship, Synchrony, Evergreen, & Venture



Message 7 of 22
Total80sKid
Valued Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

^ I can't sell the car as I don't own it, yet. I can't give up my car. I earned my 1.49% rate, have paid on time and plan on doing so, and if it means paying off PenFed for 20yrs, then so be it.

 

I can't lose my car and I am not thinking of selling it. Never had a car newer than a '91 and found this '08 used.

 

If that clause is in there is it 100% certain they will take it and sell it? I know this is why I need a lawyer, but if I am just gonna end up losing the car if I file, I will not be filing.

Message 8 of 22
truckinusa
Established Member

Re: Defeated - Any Help, Ideas or Suggestions?

refinance it with a subprime lender and then deal with the high interest rate?  Pay it off with a high interest credit card cash advance?  Just a few ideas.

Message 9 of 22
maxo-bk
New Contributor

Re: Defeated - Any Help, Ideas or Suggestions?

OP has 70K debt with $900 a month disability income. Never going to catch up unless a well paying job comes along. California has many free legal clinics that can handle a relatively simple BK with essentially no assets involved. List all debts in your petition with a request to reaffirm the car even if you're not reaffirming. It's a crap-shoot to figure out if the CU will want to repo or allow him to continue paying. My guess is that the car is probably not worth enough to cover the outstanding balance. After filing he could save enough to buy a transportation worthy car for 1000 or 1200 before the discharge day. OP needs a closure badly in my opinion. Continuing with payments on some obligation in order to keep the car is not the answer. The defaulted cc accounts will file lawsuit sooner or later and will complicate everything.
Discharge Date: 7/24/2018

Message 10 of 22
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