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Huge Credit Card Debt

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Valued Contributor

Re: Huge Credit Card Debt

I have to agree with pursell1911 - same thought I had. There is a huge number of “if”s in this plan. Nothing is guaranteed and it seems that you’re banking on several of them to all align.

Something else to consider that I haven’t seen addressed yet - your health. Even at a young age with the assumption of good health and strength, trying to work this way for years on end WILL take its toll on your health and body. Ideally you’d be able to do this, but trying to work that many hours for such a long time isn’t going to end well. And when (not if) you get sick, or the outside opportunities dry up, then you’re facing a considerable setback. It’s more than enough to derail your plans.

Finally with regard to saving, you’re talking about bare minimum spending 5 years doing this. Find a retirement calculator and plug in some numbers, both in the simulation of beginning to save when you’re of the age you plan to be when this is paid off, and with a start at the age you are now. I think you’ll see a very stark, dramatic difference in the amount of money you’ll end up with. Losing that last five years of compounding investment can chop enormous amounts of money out of your retirement.

As for a BK7, a friend of mine just filed a couple months ago. It cost him less than $2k in total. Well worth the reboot. In your case, you really should wipe the slate and start over. Read as much as you can here, in the bankruptcy and rebuilding forums. There are many here who have done it, restarted, and ended up in far better shape, much more quickly than they expected to. Many have said their only regret was not doing it sooner.

I think you’re headed for trouble trying to shoulder this - please at least consult a lawyer and get facts and then look at your plan objectively, with a devil’s-advocate attitude. I think that when you put aside your passion for doing this (which is admirable but which is no way to live) you’ll see that BK is the way to get this resolved the right way.



Rose Gold/BCP/Delta Gold/Hilton Ascend/Hilton Honors | IT | Quicksilver | Target | VS | Home Depot | Lowes | Firestone | Wayfair | Kohl’s

Heir apparent to the SJ Special (finally got a Disco CLI of $300)





Entering the garden 5/27/2019, staying until 2020
Message 21 of 104
Senior Contributor

Re: Huge Credit Card Debt

I agree with everyone that a BK is the way to go but I am going to throw in a suggestion — before you file for BK, pay off Navy Federal in full. Navy Federal is an ally you don’t want to burn and they will give you a huge leg up in your rebuild. I wish I knew about Navy Federal when I started my own rebuild, things would have been much better for me. They don’t tend to forgive so if you want that leg up later, make sure you pay. 


Scores 1/2019:
Scores 6/2019:

Hover over my cards to see my limits!
Goal: Garden... and garden... and garden.
Message 22 of 104
Valued Contributor

Re: Huge Credit Card Debt


@Saeren wrote:

I agree with everyone that a BK is the way to go but I am going to throw in a suggestion — before you file for BK, pay off Navy Federal in full. Navy Federal is an ally you don’t want to burn and they will give you a huge leg up in your rebuild. I wish I knew about Navy Federal when I started my own rebuild, things would have been much better for me. They don’t tend to forgive so if you want that leg up later, make sure you pay. 


Attorneys strongly recommend against this . . it's considered preferential treatment and can cause a BK case to be thrown out.

 

Besides, saving the cash is far more important than voluntarily paying debts that would otherwise be dismissed. Complete waste of money. There are other institutions to do business with. 

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 23 of 104
Senior Contributor

Re: Huge Credit Card Debt


@SteelerNYC wrote:

@Saeren wrote:

I agree with everyone that a BK is the way to go but I am going to throw in a suggestion — before you file for BK, pay off Navy Federal in full. Navy Federal is an ally you don’t want to burn and they will give you a huge leg up in your rebuild. I wish I knew about Navy Federal when I started my own rebuild, things would have been much better for me. They don’t tend to forgive so if you want that leg up later, make sure you pay. 


Attorneys strongly recommend against this . . it's considered preferential treatment and can cause a BK case to be thrown out.

 

Besides, saving the cash is far more important than voluntarily paying debts that would otherwise be dismissed. Complete waste of money. There are other institutions to do business with. 


If you’re still paying your other debts, I can’t see how that’s preferential, it’s just working on one account at a time to reduce the stress of dealing with them. It’s easily explained away. I’m not suggesting stop paying everything else.

 

There are few institutions like NFCU and if there’s a way to avoid burning them I would definitely recommend doing it. I am not an attorney though so I guess get a consult first. 

 

My Chapter 7 was surprisingly easy. I hired a paralegal to file my paperwork, went to court and answered some questions, underwent additional questioning about my desire to reaffirm my car (which I should have listened to the judge and not done but live and learn) and I was done. I think it was like $500 all told since I was friends with the paralegal who filed my paperwork. 


Scores 1/2019:
Scores 6/2019:

Hover over my cards to see my limits!
Goal: Garden... and garden... and garden.
Message 24 of 104
Established Contributor

Re: Huge Credit Card Debt

There are so many people in the rebuilding forum that have come back from BK's and now have better scores than I do, and I have no late payments, no collections, and low utilization. Kinda irks me, but it is what it is. What I'm trying to say is that there is a light at the end of a BK tunnel. You're still young and can get passed this before it's too late. Good luck with whatever you do and I sincerely hope you find your way out of this mess.


Also, as others have said, wouldn't you rather be saving that money for other things in life? What kind of life are you going to live by paying off all these cards just because you don't want your credit score to have a boo boo for a few years? I'm not trying to sound mean here, honestly, but you really need to think about what your life would be like if you followed your initial plan. You could be saving money for your retirement, a down payment on a house, an emergency fund, etc. You've mentioned that you don't have any financial commitments right now, so now is the best time to save as much money as you possibly can.


I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 25 of 104
Established Member

Re: Huge Credit Card Debt

Thank you for the Feedback I will definetly do some more research on  BK  but in regards to the ifs in my plan, the only big one is one of the lot better paying jobs in a year or 2 I mentioned, otherwise just currently I am making enough to put about 3k towards my debt a month and while I do work longer hrs a week its an easy job. becoming a trainer I can make happen here in the next week or so and I can always go live in my truck, if need be, I was just saying I have read articles about couples bringing in maybe 100k a year and paying more than this debt off in about 5 yrs. While I don't currently make quite that much I am not far off on track for about 75k yearly with none of the other ifs involved and am able to put more cash then others that I read that were making more then I. Again I can live virtually free in my truck, lots of drivers I have met on the road do it that don't have other obligations and its not a bad idea no rent/utilities/car payment/insurance. While yes I see the upside of just filing for BK, I also see a possible little shimmer of light at the end of this tunnell. I can sell my car if going to live in truck and prolly another 5-6k. Everything else besides possibly getting a extremely well paying job around 4k weekly is something I can do right away with no ifs, I am just slowly going about implenting everything I can and yes it sucks because all this money I am making I could be saving, but in all honest truth if my back was not pushed against the wall like this I would prolly not be working anywhere this hard and prolly would still be making $11 an hour and never contemplated about getting into the career I am in now making while maybe not much to some a decent amount of money now and almost always guaranteed a job. I feel like this is maybe a positive thing to get me better focused and I will just have a little later start being in my early 30's, which again I know and have met lots of people that age still living with their parents and they can't save a dime. Again I will do some research on the benifits of filing for BK, while also continuing to work and just weigh my options. I just made all my min payments today plus a surge more onto my Chase cards paying the balance down from 4.5k to 3.7k, and will get paid again on Friday, which now all my payments are met so my check friday for about 1k net I can throw onto the fire. Thanks again I will keep posted on my progress and decisons

Message 26 of 104
Super Contributor

Re: Huge Credit Card Debt

I know you touched on it a little back in Post 6, but have you figured out the total amount of interest across all cards that you're paying in a year?  You suggested it could take ~5 years to pay off the debt, so also try and figure what the total interest you'd pay over the course of that time span would be.  Whatever that number is, no doubt you'd like to eliminate it or at the very least reduce it significantly.  I've never looked into debt consolidation loans, but with decent income/DTI I would think it could be worth looking into.

Message 27 of 104
Established Member

Re: Huge Credit Card Debt

No I have not added the total interest I will have paid off to be exact but just looking at caculators on what I currently can put towards my debt around 2500-3000k monthly(should increase by at least about 1k very shortyly) at an average of around 18 or 19 percent intrest rate averaging all accounts I would be paying approx about 70-85k in total intrest in a period of 5yrs. I was hoping to get a debt consolidation loan from somewhere for anywhere between 7% unlikey to 15% just for 21k to consolidate 2 cards that combined have about 21k balance but super hight apr around 25%, but after trying several as I do not care about hard inquiries at this point since they will have dissapeared in the 5 yrs I am hoping to get this taken care of I always get denied but I am hoping in maybe 6-12 months I could be approved. once I am making some sort of significant progress, again I have just got all my crap together, lowering my monthly budget and increasing my income with a fairly good stream, and can make even more changes as mentioned in earlier post here, and as I currently live with all my belongings able to fit into my car in my studio apt, thinking about selling my vehicle throwing my stuff in the Semi Truck I drive and living like that for 2 yrs would be able to put at least another 7k a yr into my debt plus another 5-6k from me selling my car to the capital 1 card right away that has 10k but extremely high interest. Also as much as I don't want to hear it I have been looking at BK forums and doing research as lots of posters suggested that may be best, also going to talk to someone from Money Management International today and break down my situation and see what is the best option from their view for my current situation. One poster suggested BK and said I have lots of "ifs" in my plan, I only see one possible big if and that is me getting one of the jobs I mentioned before that I talked to but was told I needed more experience first that I could possibly be making around 4k a week, but also asked what "if" I get sick or injured. That is an If in itself, the last 5yrs have flown by and I have been fine, knock on wood, and all my medical expenses are covered under the VA. I still think I have a viable plan to get through this, and I can't fathom just giving up I always take responsiblity for my actions and obligations and have never screwed anyone over in my life, Its my financial problem I got my self into this and am determined to beat a lot of odds stacked up and others saying just go for BK and it has pushed me to a good field right now of income for me where as before I did not have a set plan besides a business that I failed at. It really has not stressed me out as I always make my payments and am going overdrive in payments now too, besides thinking about all the money I could be saving if I did not have this debt and was making this much but I still feel like this has pushed me to start making this type of money which may not be a ton to some but good for me without having any other responsibilities and have never wanted anything, anything such as fancy cars, clothes, jewlwery none of that type of stuff interest me. and I live happy now in a Studio apt. Lol like Stan Bush Transformers theme Touch ("I'm at my best when the going gets rough, and I never give in when my back is to the wall gonna fight to the end and take it all.") Lol and like Elliot Ness tells Deniro(Capone)" Never stop fighting till the fight is done."

 

Again thanks for your feedback, I will still contiune to research BK and talk to debt counseling services, but just wondering on paying this, my plan is now paying off my smaller cards in the 2-3k range they are not like the apr rate on that capital one but none the less incurring interest $25-$40. I can get them knocked off very quick 1 by 1 and each of those cards interest I was paying will start going towards the bigger ones.

Message 28 of 104
Regular Contributor

Re: Huge Credit Card Debt

Ok, so you are talking about living in a Semi, I guess that's different than what I thought.  I was under the assumption you would be living out of an F-150 or something.

 

Well it sounds like you are dead set on your plan, so best of luck!  Let us know how you're doing from time to time!


Starting 5/2018

Current 3/2019
Message 29 of 104
Established Member

Re: Huge Credit Card Debt

Yes a Semi lol, I was not talking about living in a typical vehicle. I talked to Money Management International, BK was not recommended as I was told it is not as easy as it use to be as well as if I have never been late with a payment it is not a good cause for BK and creditors could sue me if I am still making enough to still cover my debts even though I cant save anything I could still be on the hook for tons, but ,was told with my situation after going over my credit report and score and debts which suprisingly Experian still has my credit score at 704, a debt repayment plan where they send proposals  to the creditors I choose and based off what they know with each of my creditors my interest rate would be reduced to anyhwere from 3 percent to 12 percent, alot better than some of the 25-26percent ones, and caculated I could make one monthly payment of about 2300 and my debt would be gone in 54 months. The only draw back is any accounts up to all of them would be closed upon the proposal agreement, but I could always open acounts with them later if I need to after they see I finish my obligation of paying them off with the proposal,  and I  could make more than that payment and be done sooner with even a 3k a month payement it was reduced to like 42 months and I want to make even more than that. Was also told it does not really affect my credit outside of it may or may not only show up on my credit report as an alert to revolving credit lines/lenders that I am having some financial diffuculty but still want to pay my debt back just with out the insane interest rates but nothing may show up since I have never been deliquent. And after all is done I will still have a great credit report and sounds like I could always open accounts with these lenders again if I ever choose to. It sounds like a decent plan.

 

Any thoughts on this or experience???? Does this sound like a good Plan? Thanks

Message 30 of 104