Chained to credit card debt!

[Anonymous]

I am in BIG TROUBLE with credit card debt.  For the past 7 years I have managed to rack up $80,000 in debt.  I was laid off my job in June (building industry) of this year.  I am ashamed, embarrassed, scared, and don’t know what to do.   I don’t sleep at night knowing October could be the month I start falling behind.  My husband and I pay roughly $2,000 in cc debt.  I use to own a home, sold it, moved to California in 2003 and didn’t qualify for a mortgage because of his BK prior to marring him.  Long story short, I messed up, kept living above my means by using the credit cards, and now reality is setting in.  I don’t believe I can file BK nor do I want too, I just don’t know where to start.  I have read up on consumer credit counseling, but I am scared of signing up with a company that doesn’t provide me with good service or worse yet, ruin my credit.  I have thought about writing the 4 major cc company’s I owe to see if they would reduce my payments and/or interest rate, but from what I have read in today’s forum, my chances are slim.  I haven’t looked at my fico score (too afraid) however; I did pull up my credit report and it still looks good, just maxed out.  Can anyone give me some guidance?  I know your thinking what a fool, and you’re right, but I need help. I am pleading for it today.

[cadavis0609]

Deep breath, I can sense the panic in your writing. I want to start by saying that you are in a family environment now and nobody is thinking negatively of you because many have been here. Just get ready to buckle down and grit your teeth because you've got a tough job ahead of you but you will succeed and come out stronger. Others who have more experience will jump in and give you their perspective on how to dig out, but the fist thing you need to do is face your financial picture head on and pull your ficos, along with your credit card statements and begin to form a plan, one at a time for pay off. 80,000 is overwhelming but face a little at a time.

Message Edited by cadavis0609 on 09-30-2008 03:36 PM

[fishbjc]

Hello and Welcome to the Forum!!!!

If your cards are all *maxed out*, chances are good that your fico score is low.  Utilization is BIG.

Do you have ANY assets that you can sell?  Do you have any way of raising additional cash?  Can you take a p/t job?  Can you sell a new auto and purchase a good used one for cash?  Get a less expensive apartment?  Take a roommate?  Get rid of cable?  Trim, Trim, Trim is the key!

Yes, $80k is a LOT of debt, but you have to start somewhere.  There are two of us here that have used great CCCS'.  My scores have climbed steadily.

Don't let yourself get behind.  Get proactive.  If you're paying $2k now a month, you should be able to get with a good CCCS and get that $80k behind you.  Most CCCS programs are for 60 months and you have to agree not to use the cards.  Can you do that?  If so...then you're headed in the right direction.

I don't think you're a fool at all!  You've made mistakes....now is the time to listen to the pros advice and get yourself out of debt once and for all.  You CAN do it.  We're all here to help you.

[Anonymous]

Thanks for the warm welcome. The only assets I have left are some art work ($10,000 secondary market), a 2000 Camry and furnishings.  I have a truck payment of $400 which is paid off 16 months.  My daughter will be giving me $7,000 from a debt she owes me in a couple of weeks.  I don't know if I should pay off a bunch a small cc's or the truck @ 4.99%.  My problems is most of the large cc payments are due at the 1st of the month along with $500 rent and child support of $454.  When I was working we had no problem making ends meat.  I do receive $1500 a month for unemployment which is 1/2 my take home pay.  I am scheduled for back surgery on 11/3 which has slowed my prospect of looking for work down.  I told my husband I'd forego surgery if needed.  And at this point, I feel I need to cancel my surgery.  I don't have a cell phone and cable is free for a year.  I do like the roommate idea.  Didn't think about that...Anyway, I would appreciate any advice.  Oh, we have a SL of $305 to worry about as well.

[cadavis0609]

SEE!!! Breathing room already. After that 7000, you now have 73000 in cc debt. I know its still overwhelming but now you've freed up the small cc payments to put on the bigger cc's, which you will now be paying off quicker. Use the snowball effect and slowly but surely, you will be out of this hole. Also, call those creditors and ask for that rate reduction. The worse that can happen is that they will say no. Use the backdoor numbers found stickied in the CC forums. They will be more likely to help you than the standard CSR. Keep us posted.

[Anonymous]

So I should pay off the small cc's first?  No my truck to give me an extra $400 at the beginning of the month? We do know about the snowball effect, just never implemented it.  As for the back door numbers, they are posted on this forum?

[cadavis0609]

I don't know your total financial situation, but I do think you should do whatever you feel will free up the most money for cc repayment. I was just suggesting that putting the 7000 on cc's provides a little bit of immediate gratification and progress. And yes, the backdoor numbers are posted in this forum in the CC section.

[Anonymous]

The immediate gratification sounds much better.  With the economy in such a mess, what do you think my chances are?  I have only been late once in the past 17 years. Also, I have a couple of cards at 4.42% and 6.99% which I don’t want those ccc’s to know that I am struggling. 

[cadavis0609]

Your chances of getting the interest rates lowered? I think you have a great shot if they are high enough to lower. The only thing that might stop you is that in current economic times, banks are scared and feel like having money out there causes increased risk to them and tend to raise interest rates, but it never hurts to ask.

Message Edited by cadavis0609 on 09-30-2008 10:01 PM

[Anonymous]

That's what I am afraid of.  I'm still looking for the numbers.  This is my first day so....I really don't know my way around this forum. Thanks so much for feeding me with hope! I will sleep much better tonight.