Not Sure What To Do

[Ondi]

 To make a long story short, I lost my job  and am now only living on a small income. There is no room to pay any of my credit cards. My credit was great and I was never late or had any issure. I'm now almost three months behind on my cards and just don't know what to do. I have asked people I know but they just get funny and don't know what to say or have any advice to give. I'm losing sleep at night because I have fear now that my credit is runied I won't be able to rent a place ever again or do anything. It kills me that I went from good credit and now to not even being able to pay the cards. I have eight credit cards and yes that may be stupid of me but they all were paid on time and I do owe on most of them. Should I file chapter 7 or before going that route is there anything else I can do? I'm so worried I can't eat or sleep. Any advice or help will be greatly apprecited. Thanks in advance. 

[DaveInAZ]

My advice:

1- Don't lose sleep over it, be optimistic things will work out.

2- Don't worry about never being able to rent again or never getting credit again. Your credit score is a snapshot in time, it was good previously and can be good again. 7 years ago I was without a job & massive debt. I chose BK and it worked out. Today I have good income & good credit once again.

3- Don't just ignore your bills. Call your credit card companies and explain your situation and ask them to work with you, and explain that compounding you debt with late fees & very high interest (which kicks in when you miss a payment) won't help them or you in paying down your debt. And don't just call the phone # on the back of your card, go to the Credit Card Applications forum here on MyFico and look for the 'sticky' thread "Backdoor Numbers. That's the #s for the Executive Office and will get you someone with the knowledge & authority to work with you.

4- Consider working with a Credit Counseling Service. But be careful, look for one with a AAA raring from the Better Business Bureau (BBB). You might start here, a list of approved credit counseling service by state approved by the US Dept. of Justice: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

And here's good info on credit counseling services provided by the Federal Trade Commission: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor

5- Stay strong, and wishing you all the best.

[Anonymous]

Good advice from Dave......just wanted to add: is it possible you can pick up a second job to help with finances? 

[wa3more]

how much do you owe and to whom ?

Depending on your answer, you can probably solve this on your own without a credit counsel company.

Dont worry or lose sleep and do not worry abour credit. Four wheels and 4 walls that is all you spend money on.

Been there :

-perfect credit for 27 years until 2009. Then lost job. Then bought business that lasted 9 months. 2010, got divorced.

-defaulted on about 45k. Only chase sued on 1 account and walked away from another 20k account.

now credit scores are 830 and i only have 1 mortgage and 1 credit card reporting. 2009 ? credit lines/cards... i learned my lesson.

You will be ok. Just tell me what oustanding debt is then it will help give a better answer.

[Ondi]

Thank you so much for the help and advice. I'm taking it all in and will folow the steps you listed. I owe $6218 by the way. That is the total of all of the cards but I deceide to just try t do the best I can for now and try not to lose sleep over this. 

[Ondi]

Thank you. I owe $6218 Three Cap 1 cards, two comenity, Amazon store card, and Kholes. 

[Ondi]

I am currently looking for a job now. Thank you for that suggestion also

[wa3more]

no way would I BK over 6k.

Around the charge point, 6 months, you will start to get offers to settle, they will be may 60-80% of balance. Obviously the older the debt gets the lower the settle % so 2 years down the road you can settle for less.

To stop the calls, i would send a letter to the creditors telling them "All calls to all numbers are inconvenient. Please contact me by mail only. Original creditors do not have to abide by teh FDCPA but most will honor your request.

Get your account agreements if you don't have them. Following the 2009 CARD ACT, they now must be posted online. See if the agreement has an arbitration clause, preferably JAMS. AAA is ok but not as expensive as JAMS. Read up on arb. When you get collection letters, you respond that you dispute the debt in its entirety and you elect private contractual arbitration per your contract.

It costs 1200 upfront to get JAMS going then the creditor gets a bill for about 5k prior to commencement. Arb is leverage for you to settle these debts for say 20%.

Also get agreements in writing and negotiate via email. but you are probably 6 months or so away from serious negotiations that will be good for you. When you are current or 60-90 days late, they won't negotiate. They may try and get you on a payment plan. I would not do plans, only lump sum.