@Anonymous wrote:Good morning everyone! This is my first post and I cant wait to be an active member of this forum and work towards debt freedom! I'll be posting my finances here and hoping to get some advice on how to fix this.
My Debts Are as follows
Auto Loan 1: $34,500 (Car Value $18,000) (Mini Pmt: $687)
Auto Loan 2: $20,500 (Car Value $ 9,000) (Mini Pmt: $569)
Auto Loan 3: $ 6,500 (Car Value $ 4,000) (Mini Pmt: $193)
Credit Cards: $11,365 (Mini Pmt: $328)
Pers. Loans: $2,555 (Mini Pmt: $135)
IRS Debt: $2,000 (Mini Pmt: $100)
My FICO: 568 (a few 30 day late payments and a high DTI)
My monthly living expenses including food and other misc should be right around $3,200 (not including doing anything fun)
I am a comissioned employee. My monthly (take home) income fluxuates between $4,500 and $8,500 a month.
Currently Auto 3 is a family member's car and she's paying for it and keeping the vehicle. Auto 1 is being paid for and driven by a friend but there's no telling when that will end.
Considering a bad month (COVID19 making most of my months that way), I am left with $168 after everything which is easily taken by misc things that can come up such as a vet bill or simply wanting to go out once or twice a month and IM TIRED OF IT!!!
My Plan so far:
At this point, I'm considering letting Auto 2 go into reposession and stopping all payments on my credit cards and personal loans. This would open up a little over $1,000 a month that would be able to go into savings + anything I make on a good month. Between the auto loan deficiency and the unsecured items, I would have slightly over $25,000 in bad unsecured debt. Overtime with the savings, I would hope to settle each of these debts for a max of 50% of their original owed amounts which would be $12,000 to $13,000 which means I could kill this in a year or less.
Any thoughts, advice or, adjustments I could make to this plan?
Thanks everyone!!!
I think you should consult with a bankruptcy lawyer before taking any action.
@Anonymous wrote:
@ccquest wrote:
I'd just say don't unless you have no plans to take out additional credit in the next 5-10 years because you're credit report will be absolutely destroyed by doing that.
If you really want to be done with everything, go about it the proper way and file for bankruptcy.
You could also look into voluntary repossession and if that would help at all. It may sting to be paying for something you don't have at all, but it would bring the payments down and not destroy your credit.
I appreciate the info however, a voluntary and involuntary repo will have the same effect on your score. It may only affect a lender's heart upon a manual review.
I've evaluated the option of bankruptcy and due to my income, I probably don't qualify for Chapter 7. Chapter 13 would probably have a worse effect on my credit not to mention I don't like the idea of being owned by a trustee.
I plan to negotiate for lump sum in exchange for settlement in full and pay to delete. After this, I can definitely work on repairing my credit.
I'm sure you qualify for Chapter 7. You need to consult with a bankruptcy lawyer. You should not be trying to figure it out by browsing the internet.
@Anonymous wrote:
@Anonymous wrote:^^^ all that. Very well-stated @Anonymous. I've followed your progress on here and have seen the hell you've fought back through. I agree, it's no way to live.
OP, there is some great advice here and it would be well worth your time to do a couple of initial consultations with a BK attorney or two just to see where you stand if you were to go down that road. At the same time, look at all other avenues of increasing income - you can do the above with a side gig, selling things, OT at work if you're hourly, you can sell plasma, or anything else you can think of.
We have a living icon of industrious and creative dedication to raising money to pay off a huge debt here on the forum. I'll page @Anonymous in the hopes that he sees this. He pops in occasionally to give us an update on his so-far-very-successful quest to pay off something like $110,000-120,000 in personal debt in a few years' time. In the meantime, click on his screen name to bring up his profile and read some of his posts. It may help put your situation in context.
I appreciate your as well as @Anonymous 's advice and insights. I've consulted with a good bankruptcy attorney and I would be required to pay $500 up front to start proceedings followed by $4500 over the life of a Chapter 13. His recommendation was to use the bankruptcy to eliminate Auto Loan 1 and "Cram Down" (Reduce the Lien amount to asset value) of Loans 2 and 3 and work out a payment plan on the settlement of all of the remaining unsecured debt. Not a fun process but possibly worth the while taking into consideration the insight I'm getting.
I am a car salesman and work 60+ hours a week. I barely have any time as it is with my wife and refuse to sacrifice any more of that precious time for a side gig that would probably pay me at a rate of 1/3rd or less of what I earn at work.
A Chapter 7 would be much cheaper, would be over much sooner, and would be much easier for you to live with.
