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Huge Credit Card Debt

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Super Contributor

Re: Huge Credit Card Debt


@SteelerNYC wrote:

It basically amounts to whether or not you want to spend the next 10 years of your life dealing with this OR if you want to hit the reset button and get started with your life now.

 

I was almost exactly you at your age and kept spinning my wheels for another 8 years. On paper I should have been able to make progress, but somehow (interest) the debt just wouldn't go anywhere. I also had a pretty severe health incident which threw a big wrench in things.

 

The main thing a BK would do is let you work hard now and apply that hard work to your future instead of the wrongs of the past. I had just started a new job as I was filing and once I got past my attorney's fees etc., I was able to do things like start a savings account and take advantage of my new employer's 401k. IMO the ability to stockpile money (and actually doing it . . . very key point) far outweighs having an unblemished credit report and being able to borrow it. And even with a BK, I have $23.5k, $18k, $9k, $7k, cards etc. There is some strategy involved in finding banks that will work with you but it absolutely can be done and you can learn everything you need to learn here.

 

I don't suggest BK lightly, but I can tell this is really weighing on you from your posts and it wouldn't hurt anything to talk to a few attorneys and just see what they say. Talking to a few is especially important because your income will be borderline for a Chapter 7 (no repayment) and you very well might need to do a 13 (partial or full repayment depending on your income/expenses) but you have to watch for attorneys that will too easily say you only qualify for a 13.

 

Even if all you qualify for is a 13, the interest charges will stop and you're going to be out of this mess 10x faster. Life certainly goes on after BK and as long as you take the lesson learned and don't start running back into debt, you can actually end up with a much healthier financial life long term.

 

Almost 5 years after my filing, I generally don't exceed 10% credit card usage (and if I *do* carry debt, it's at 0% or 1.9% etc., and a strategic choice) and I'm saving 12% of my income to my 401k and 15% to my savings. 5 more years and the BK drops off my report.


My advice would be to try the snowball method. And if that isn't working then go to a good consumer bankruptcy lawyer and file Chapter 7.

 

Snowball method.
1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

 


7/1/19: FICO8 EQ 749 TU 783 EX 746 Total revolving limits 713500 (592500 reporting)
Message 11 of 105
Valued Member

Re: Huge Credit Card Debt

Hello thank you for your post, I have a few questions. 1 have no idea how to even start a bk or the difference between different chapters plus the cost of an attorney or any other things.  and 2 I understand what you mean and I have pondered the thought of saying screw it, because even though my credit will be ruined for awhile I can actually start saving, but I seriously don't have much weight on my shoulders as I don't need much money for anything right now, and figure if I can make even very min 34k a yr in payments I could be debt free in 5 yrs and sooner with my other opps. . which I would be 33. and still hopefully have plenty of time to save as well as still saving my credit. I figured before when I was making next to nothing this was a very real possiblilty as I did not want to spend over the next 20 yrs repaying this debt.

Message 12 of 105
Valued Member

Re: Huge Credit Card Debt

I have been paying down the smaller cards now,  and making progress, they also are adding intrest, I figure if I can get them paid off pretty soon that intrest I was losing will start being applied to other accounts. I am just trying to figure out at this point with lots of options to make really good money, how fast I could pay this debt down. if 7 or under years I feel like it might make more sense specially if I can do it possibly way quicker like 5 yrs off lots of diff options. I may still have lots of time to save plenty being early 30's then, rather ruin my credit for yrs. alll my cards average an 19 percent intrest rate. with that being said off what I can put towards them now and even more later possibly with all the options I have just at puttting 3k a month towards them I will be free in 5yrs or less. Is it still worth filling bk>? 5yrs is not that long only 2 more years than it took me to rack this debt.

Message 13 of 105
Established Member

Re: Huge Credit Card Debt

I would suggest bankruptcy. My personal situation wasn't dissimilar to you except I ended up with a divorce and 1/3 of my paycheck going to child support and it just wasn't sustainable to continue paying creditors.

I had perfect pay history, ended up getting divorced and at the point child support order kicked in I was barely able tl scrap by. I was actually using payday lenders just to make my rent while still paying my credit cards because I didn't want them to get behind.

I never considered bankruptcy because growing up it was my belief that that was THE ABSOLUTE WORST thing you could ever do to yourself financially. So I just let it all go, didn't pay it, let it sit there as old, bad debt, go to charge off. I was never sued (surprisingly) but 5yrs after the fact I still couldn't get a mortgage because of all of it. Finally 6yrs after everything went delinquent some of it started to fall off my credit report, by FICO improved to about 640 and I was able to secure an FHA loan. My LO even told me I'd have been better filing bankruptcy because that really only follows you for 3yrs. I wish I'd done it a year or so out of my divorce.

Good luck with whatever you decide.
Message 14 of 105
Regular Contributor

Re: Huge Credit Card Debt

Please keep posting. No apologies needed for post length. Talking things out is helpful sometimes. We're here to listen. People with expertise on matters will give helpful advice and good faith opinions. 

 

I like your fighting spirit and strong sense of responsibility. The only concern I have is that while you are working 28 hours a day 8 days a week you have no opportunity to plan for retirement. The years go by fast. You're still young and feeling invincible. I don't have the expertise you will get from others. I read and learn at this site. Seems silly of me to wonder about a rainy day fund since you are building an ark. 

 

Please take care of you. 

 

Keep talking to us, ok?

Message 15 of 105
Valued Member

Re: Huge Credit Card Debt

thx for response not somthing I will consider just yet, but how much is a BK regarding attorneys/court/etc.... I don't know anything about, and how much can I still be charged for in the end. again I want to wait and see what I can do here first, but in all worse case would like some informative info for the worst if that should ever happen. thank you.

Message 16 of 105
Valued Contributor

Re: Huge Credit Card Debt


@bdub1234 wrote:

thx for response not somthing I will consider just yet, but how much is a BK regarding attorneys/court/etc.... I don't know anything about, and how much can I still be charged for in the end. again I want to wait and see what I can do here first, but in all worse case would like some informative info for the worst if that should ever happen. thank you.


I'd say $1k-$4k for a Chapter 7 and maybe $3k-$6k for a Chapter 13.  Depends on the attorney, but this can very well be a get what you pay for situation IMO.

 

Chapter 7 you need to pay the fees up front. In a chapter 13 they can often work them into your monthly debt repayment.

 

 

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU Cash Rewards/PenFed Power Cash Rewards/PenFed Pathfinder AMEX - $60k total revolving
EQ/EX/TU: FICO 8's Oct 2018: 700/685/671, 1% utilization/AZEO, INQ's: 6/2/4
Message 17 of 105
Valued Member

Re: Huge Credit Card Debt

Lol your right working expect Im working 24 hrs an hour. I seriously want to see what I can do, I have overcame bigger obstacles in my life,  in all seriouness I appreciate the post and advice and it feels good to people about this without being charged.  I just really don't want a Bk on my record and on my profiles for possibly 5-10yrs if I can get this debt paid off in 5 yrs. if I could net 50k a year and virtually have no expenses it would make all sense to pay this debt off right?, which after seeing post, I could possibly and even definitely do, by living in a truck lol for 2 years and being a trainer. Again its all kinda what else I want to sacrafice.  but lets say for instance I still net 45-50k a yr and only have about 5k a year in expenses. the other 45k goes towards debt again without any of the other possiblities I can do to make even more than that and within 4o months I am debt free, lots of hard work and sacrafice. yes I would be giving up up all that cash but 3 yrs is not very long. I will keep posted reguarly where my progress is and what ultimatley happens. thanks again

Message 18 of 105
Valued Member

Re: Huge Credit Card Debt

how much in fees would I be paying? on either of two in the different situations on the debt that I have?

Message 19 of 105
Regular Contributor

Re: Huge Credit Card Debt


@bdub1234 wrote:

Lol your right working expect Im working 24 hrs an hour. I seriously want to see what I can do, I have overcame bigger obstacles in my life,  in all seriouness I appreciate the post and advice and it feels good to people about this without being charged.  I just really don't want a Bk on my record and on my profiles for possibly 5-10yrs if I can get this debt paid off in 5 yrs. if I could net 50k a year and virtually have no expenses it would make all sense to pay this debt off right?, which after seeing post, I could possibly and even definitely do, by living in a truck lol for 2 years and being a trainer. Again its all kinda what else I want to sacrafice.  but lets say for instance I still net 45-50k a yr and only have about 5k a year in expenses. the other 45k goes towards debt again without any of the other possiblities I can do to make even more than that and within 4o months I am debt free, lots of hard work and sacrafice. yes I would be giving up up all that cash but 3 yrs is not very long. I will keep posted reguarly where my progress is and what ultimatley happens. thanks again


The problem I keep seeing is you continue to say "if I can get this job that nets "x" a year, I will be fine".  The reality is you don't have that job that nets "X" a year.  So are you just going to go the next 5 years of your life with no expenses?  I have personal experience living out of a vehicle, you wont last a month...  You are going to live off of 5k a year for the next 5 years?  That's $13.69 per day, come on man that's a 6" subway meal with a coke and a bag of chips, and a couple gallons of gas...You know that is not a good plan.

 

Talk to a BK attorney while you are still young, at least hear what the attorney has to say.


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Message 20 of 105