Balance Transfer $75K from Chase and AMEX

[Kiesha8185]

Thanks, it definitely was scary. Especially to go from no cc debt to maxing out $75K worth of medical bills.

I make $55K, hubby makes a little more but his pay is so sporadic with military. I have a 401K with about $15K with a previously employer...should I borrow against it?

Chase 1: $19,492/$19,600 @ 16%

Chase 2: $32,132/$33,800 @ 20%

AMEX: $24,265/$25,000 @ 18%

Here are my Fico scores (as of 7/12/17):

Equifax - 654

Transunion - 680

Experian - 667

[Anonymous]

What's interst $amount per CC? LOL I'm bad at math if someone could chime in....how does CCCs calculate interest a mo. Thks in advance

😆

[Anonymous]

Only guessing here but is the strategy at the moment..... putting 1000 a mo. On each CC ???

[lexus829]

You can look at the Lending Club to consolidate your debt or if you have equity HELOC(home equity line of credit) is definitely the way to go...

Since you can pay a lot... i suggest looking into Truth in Equity...

or replace your mortgage... not a lot of people know this strategy... research it on google, they charge a fee for their preferred lenders and spreadsheet...

but great discipline is needed on this strategy which I see from you posts that you have...

The strategy is to treat your heloc to do everything for you... kinda like the old all in one accounts by chase... you can do this even with a personal line of credit..

doesnt have to be HELOC but i think HELOC have a lower interest....

[Anonymous]

---

@lexus829 wrote:

You can look at the Lending Club to consolidate your debt or if you have equity HELOC(home equity line of credit) is definitely the way to go...

Since you can pay a lot... i suggest looking into Truth in Equity...

or replace your mortgage... not a lot of people know this strategy... research it on google, they charge a fee for their preferred lenders and spreadsheet...

but great discipline is needed on this strategy which I see from you posts that you have...

The strategy is to treat your heloc to do everything for you... kinda like the old all in one accounts by chase... you can do this even with a personal line of credit..

doesnt have to be HELOC but i think HELOC have a lower interest....

---

Do not even consider a HELOC; the time and money saved is not worth risking your home over. If you're getting a consolidation loan, you're not looking like a prime file; even 8% interest is an unrealistic expectation for a new loan.

I did some rough amortization schedules with interest compounding monthly, assuming 3k a month payment consistently (I think I saw this earlier in the thread...) These are definitely back of the napkin as I just dropped in 75k instead of calculating your exact total.

Current interest: Roughly 33 months, 95k paid in total.

15% interest: Roughly 32 months, 90.5k paid in total.

10% interest: Roughly 29 months, 85k paid in total.

8% interest: Roughly 28 months, 83k paid in total.

0% interest: Roughly 25 months, 75k paid in total.

Saving 12k at 8% is incredibly appealing, as is all the time you would save on the payoff. The reality is that you almost certainly will have to make this debt secured, which takes away the safety valve if you have another medical emergency. You absolutely need to be able to discharge this debt in a bankruptcy if the wheels fall off again. Your best bet is to tighten your belts and increase your payment, applying for an unsecured line of credit or balance transfer card as your profile improves. Even then, you're not going to save a ton of time or money; getting a huge 0% line is just not going to happen with your circumstance.

[yapsalot]

Kiesha8185,

You mentioned that you live in the State of Florida. Florida has homestead protection, which means that your home cannot be taken or liened upon for unsecured debt like credit card debt. (I think retirement funds are similarly protected but I'm not certain about that, find out before you consider borrowing against your 401k). So with that in mind, I would not attempt to convert the credit card debt into any type of mortgage on your home, not a second mortgage and not a refinance to pay off credit card debt. Not to be a negative Nancy, but but your Amex and two Chase cards are maxed out. Suppose you refinanced your home to pay off credit card debt to lower your interest expense, for example, then were hit with a second medical problem, or some other emergency, that pushed you to the point where you were unable to pay the additional mortgage payment, you could lose your home. On the other hand, if you were unable to pay your credit card debt, and were sued by the charge companies, they could not take your home. I had a disabling medical condition that lasted several years and I was unable to pay credit card debt of over $100k. Yes, I did get bad credit, but no matter how bad your credit gets, it goes back to all clear after 7 years. But if you lose your home, that's permanent.

Another unfortunate thing to keep in mind, your three credit cards are maxed out, and even though you are paying the card payments monthly, there are plenty of stories on this forum from people whose accounts were suddenly, without any warning closed by the credit card companies. Chase and Amex have the absolute right to close any account at any time for any reason or for no reason or reduce the credit limit.

One repayment technique that's widely accepted is to pay the minimums on the two cards with the lower interest rates and pay all extra money to the card with the higher rate. This method minimizes your interest expense. Most credit card statements cut the same day or about the same day every month. Put the date for each of your cards on your calendar at the beginning of the month. I don't mean the date the payment is due, I mean the day the statement cuts, then as soon as the statement is issued, hit all three with the payments. That way you won't miss a payment. If you were to miss a payment on a maxed-out situation, I suspect the odds of account closure or reduction in your credit limit would dramatically increase. If you don't already have it, get electronic access to your accounts so you can closely monitor the issuance of statements and make electronic payments that you can verify online have been received. Don't trust US Mail.

[Anonymous]

These are all really good post here really hoping for the best outcome ....now out of curiosity??? Are these CC still in use???

[Anonymous]

---

@Kiesha8185 wrote:

Thanks, it definitely was scary. Especially to go from no cc debt to maxing out $75K worth of medical bills.

I make $55K, hubby makes a little more but his pay is so sporadic with military.  

Your husband is in the MIlitary, is your home a VA loan?  You could do a VA Cash Out Loan, read about it.  Example, say the balance of you home loan iis $200,000 and per the appraisal, it is worth $300,000, you could do a cash out of $75k.  The $75k will get added to the current home loan ($200K+ $75k) which will increase your monthly mortgage payment by roughly $250-$350/month.  You then get your $75k and pay everything off.  Doing this will get you to $0 credit card debt.  You will be paying a few hundred more on your mortgage, but will be better than paying $3000/month on CCs.  Even better, since you can afford to pay $3k on credit cards, you could use some of that and make extra payments on your motgage to bring the loan balance down quicker.

I have a 401K with about $15K with a previously employer...should I borrow against it? Do not do this!  This is your future retirement money.  

@Anonymous 1: $19,492/$19,600 @ 16%

@Anonymous 2: $32,132/$33,800 @ 20%

@Anonymous: $24,265/$25,000 @ 18%

At this point, of course the banks are not going to lower your interest rate...because they will make more money off you this way.

You didn't tell us how much cash available you have to pay down some of this debt.  Wew need to know this to analyse how you can best allocate the funds toward the balances.

Here are my Fico scores (as of 7/12/17):

Equifax - 654

Transunion - 680

Experian - 667

It is great that you know your scores, but at this point it doesn't matter.  Appying for another cardfor BT and getting approved for a high limit (with your income) is highly unlikely.  Not trying to put you down just being realistic :-)  You need to concentrate on paying these off.

The last resource IMO (other than the cash out refinance) would be to:

1. File Ch7

2. Whatever amount of cash said you had to pay down some/most of the debts, you can put in savings

3. Start from scratch - $0 debt and money in the bank (savings)

It is not hard to build your credit after filing Ch7. This forum is a great way to help you accomplish that. 

---

[CreditCuriosity]

Surprised at how many people are saying Chap 7 BK as a possibility..  I never had to file it nor hopefully ever have to.. OP might make to much for this to be an option and then BK13 comes into play if I am not mistaken.  Just because someone doesn't want to pay a debt Chap 7 BK isn't an option if you make x Amt of money.  As stated no expert to BK's as never filed, but alot more peeople would file BK 7's if they simply wanted to get out of debt when in reality they can afford to slowly pay off things although it is painful.  OP case is pretty extreme, but many people on here could run up 75k in CC quickly and be in a world of trouble as well as alot of people on this forum has 250k-500k in credit and more and not the income to support it if they decided to go wild.  Understand this is a medical issue, but i don't think that changes any rules whether BK7 is a possibility or if they would have to go route of bk13 which obviously must be repaid, but obviously the interest would stop (I believe)

[Anonymous]

---

@CreditCuriousity wrote:

Surprised at how many people are saying Chap 7 BK as a possibility..  I never had to file it nor hopefully ever have to.. OP might make to much for this to be an option and then BK13 comes into play if I am not mistaken.  Just because someone doesn't want to pay a debt Chap 7 BK isn't an option if you make x Amt of money.  As stated no expert to BK's as never filed, but alot more peeople would file BK 7's if they simply wanted to get out of debt when in reality they can afford to slowly pay off things although it is painful.  OP case is pretty extreme, but many people on here could run up 75k in CC quickly and be in a world of trouble as well as alot of people on this forum has 250k-500k in credit and more and not the income to support it if they decided to go wild.  Understand this is a medical issue, but i don't think that changes any rules whether BK7 is a possibility or if they would have to go route of bk13 which obviously must be repaid, but obviously the interest would stop (I believe)

---

i get your point, but not everyone who falls under debt are fortunate like you, everyone's story is different.  OP is looking/asking for help/advice and we are doing that by giving her options and what's available on the table to get out of debt.  It is ultimately her choice to decide what route she wants to take.  Her income is $55k by the way.  

Back to the topic, what is your advice?