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I'm About to Go Underwater

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I'm About to Go Underwater

Some stats. I'm married and 45 years old. Wife got laid off over a year and a half ago and just now got a job making half what she used to. Also during this time period my 10 year old daughter got really sick and we ended up with 10k medical debt. We have eaten into a lot of savings during that time because they only gave her limited unemployment benefits and we also ran up a bunch of credit just trying to survive. We basically have been living on credit for over a year.


Where it stands now is that I went from zero debt about 18 months ago to being $45,000 in debt, all on credit cards. I have other debt in the form of CAR PAYMENTS. I have been making minimum payments on the cards and big payments where I can and always paying the cars first as we need them. At this point, the interest on the cards is eating me alive. If I make a $500 payment, half of that is interest at times. Then I end up using the credit card again to put in gas because I can't afford it any other way. Basically I feel like I have crossed over into the event horizon of the black hole. I see no hope in my future and I'm desperate.


I do have some assets that I can sell and trust me, that is my first plan. I figure I can sell a few items (camper, rifles, etc.) and have about 10 grand. It won't be easy and may take 6 months to sell some of these things, if I can sell them at all. That will leave me with 35 grand in debt. My debt is as follows:


USAA MC - $5500

USAA AMEX - $11000

Sears CITI - $5500

Chevron - $3000

Discover - $1500

Amex - $2000

Chase - $3500

Wifes cards - The rest


Right now I am not behind but every month gets harder and harder. This month is a squeeze. Every paycheck, I am stressing out, having chest pain, can't breathe, can't even take my family out to see a movie anymore. We got ourselves into this mess I know. Does anybody have any advice for me? I don't care if you give me bad advice, just give me any advice at this point? I am looking for a second job but have no idea how long that will take. If I end up defaulting, I think I will let the USAA Amex default first since that's the card with the highest APR and the biggest balance.


My goal here is to see if bankruptcy is even an option or if there is another way. I really prefer not to go bankruptcy, though it might not even be an option for us. I am currently looking for a second job to get out of this hole, but no luck yet. Thoughts?  

Message 1 of 7
Moderator Emerita

Re: I'm About to Go Underwater

We need the whole picture to help. How much are the car payments?  What is your income? Your wife's income? Your wife's debt?

Rent? or Mortgage? How much monthly?


Also which state are you located in - it makes a difference if Bk is feasible or very difficult. There are very different exemptions in each state.

Message 2 of 7
Established Contributor

Re: I'm About to Go Underwater

Everyone is here to help you, you are not alone. Hang in there.

Ch.13 Discharge 8/2014
START: 9/2014: FICO: Eq-533/TU-519/Exp-560
CURRENT:1/2017: FICO: Eq-699/TU-700 Exp-703
/Cap 1 Plat (11,500)|Barclays (6200)|Cap1.Quicksilver (7650.00)|Overstock (6,000)|Discover (4500)|DCU/Auto/25k/1.99%
|Cap 1 Auto/35k/2.49%
Message 3 of 7
Regular Contributor

Re: I'm About to Go Underwater

Sorry to hear about your unfortunate situation...

I have two questions that would help me get a better sense of what direction you're heading in.

This may be obvious, but have you looked for another job--either to replace your current job or in addition to it?  I guess this depends on your skillset, and I imagine since your wife can't find work it's difficult for you as well.  It seems like ANY extra income would help at this point, and it may be time for either of you to look into retail, waiting, etc.  I work for a valet company at a hospital, and there are plenty of older employees making minimum wage plus ~$4-7/hour in tips.

Also, how far do you live from where you work?  If you work relatively close to home, it would make sense for your wife to bring you to work and use ONE vehicle during the day so you can sell the other vehicle.  If the distance isn't too far, you'd spend more on gas but less overall (taking away a car payment).  


As I said, this would help clear some stuff up... $45,000 is A LOT of debt, and it will take plenty of time to get through this.  Bankruptcy works for some people, but there are other options. 

My partner recently took a loan from Lending Club to pay off about $29,000 in credit card debt.  The interest rate is lower than most of the rates of the cards, and the monthly payment is less than $1,000.  This should be something to consider as well, depending on your scores (which will affect the rate/amount they extend to you).  This information (scores, any other negatives on your CRs, etc.) would help us give further advice.  


Card/Limit/Opened — Discover it: $27,600 2/14 | Chase Sapphire Preferred: $10,500 7/14 | Banana Republic Visa: $10,000 7/14 | USAA Cash Rewards Visa Signature: $9,000 6/11 | Chase Freedom: $2,000 3/12
History — AAoA: 42 months | Oldest account: 119 months (including AU) | Inquiries: 1 EX 0 EQ 0 TU | Score: 765 (Discover TU) 750 (USAA CreditCheck Monitoring EX FAKO)
Message 4 of 7
Valued Contributor

Re: I'm About to Go Underwater



I am not an expert in this area, but just wanted to let you know that I am so sorry about what you are your family are going through.  It is heart-wrenching when I hear so many stories of job losses, getting another job at a fraction of the income and then the medical issues to boot.  I know this is very painful.  


Keep your head up.  You will get through this.  Between 2011 and early 2013 my wife and I went through very ugly times as well.  We were lucky that we were able to get through it without BK, however it did take a LOT of hard work.  I know the pain.  You will find a lot of very friendly people here who will offer very good advice and support.  


Best wishes!!  You will get through this!  



Year 2012: All Scores in the 520 range, during a foreclosure, CC Settlement and high UTIL. Very ugly days...
Jan 2021: EX8: 850; EQ8: 850; TU8: 850 -- Middle Mortgage Score: 824
In My Wallet: Discover $73.7K; Cap1 Venture $42.7K; Amex ED $38K; Amex Optima $2.5K; Amex Delta Gold $18K; Citi Costco $21K; Cap1 Plat $8.4K; Barclay $7K; Chase Amazon $6K; BoA Plat $21.6K; Citi TY Pref $19K; US Bank $4K; Dell $5K; Care Credit $6.5K. Total Revolving CL: $285K
My UTIL: Less than 1% - Only allow about $10 a month to report, on one account. .
Message 5 of 7
Senior Contributor

Re: I'm About to Go Underwater

Considering that you will still end up with significant debt after selling off assets, I highly recommend that you schedule a couple of free consulatations with bankruptcy attorneys. The bankruptcy laws are there to help you shed debt and get a fres start. Don't wait too long to do it. All the best to you and your family.

Message 6 of 7

Re: I'm About to Go Underwater

This is very similar to my situation before I decided to throw in the towel and file for bankruptcy.


Is there anything specifically that is preventing you from going the bankruptcy route? My lawyer's advice at the time was to stop all credit card payments for the next three months.  Save up that money while continuing to do the car payments (since those are important).  


I shelled out about $1800 to the lawyer, in the form of five monthly payments (this included court fees), and went through the motions of filing for chapter 7 bankruptcy.  Since you're paying for your car, they will give you the option of keeping your car and continuing to make payments on it, despite the bankruptcy - or you can let it get repo'd but it sounds like you need the car.  I believe they will even cut down any extra amount owed on the car, and the car's value as it stands now will become your new loan amount for the car (however I'm not sure if rules have changed in the past seven years; but this was my experience).  So essentially, if you owe, say $20k on your car, but with it's mileage and age, it's actually worth $10k, you should be able to keep the car and only owe $10k on it.


To me, a significant amount worth of debt in exchange for a fresh start is well worth it.  Rebuilding within the next 7-10 years is a trivial effort in comparison with the stress and pain you're facing now.  You also gotta take into account the fact that it took one year to rack up the $45k debt.  That statistic alone is concerning; in the event that you or your wife lose your job or any unforeseen expenses arise, that debt could rise very quickly. 


Wish you the best

CURRENT (11/28/2014 myFico): EQ 690, TU 679, EX 683
10/01/2014: EQ 626, TU 657, EX 638

Chap7 BK in 12/2008 · Goal: 700s
Message 7 of 7
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