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Huge Credit Card Debt

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

Re: Huge Credit Card Debt

I again never want to have the type of credit lines I had before but it sounds good as I will still be paying back everything in a few years. without all the compounded interests that after caculated when talking to a financial counselr I would have paid close to 180k in interest, but unlike a BK will still keep my report and score intact, and at most could be out of this in less than 5yrs with a 2300 payment but maybe even 3 yrs with me grinding and putting much more towards that payment. I will only be 31 then and if I keep grinding after paying this off can finally start saving, maybe that 40k plus a year and still be in decent shape, while possibly only taking a small hit to my credit

Message 31 of 104
Valued Contributor

Re: Huge Credit Card Debt

I am not a fan of these companies. They work, but what they're telling you is influenced by the fact that they want to make money off of you.

 

I will say that if you go this route, you need to keep making your own minimum payments until you KNOW the company starts making them.

 

A lot of people that go this route still end up with tarnished credit because of a lag until the third party starts making the payments.

 

Your credit will take a beating because of all of the closed accounts, but you're going to be far better off if you manage to not incur any 30/60/90 day lates on it.

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 32 of 104
Valued Contributor

Re: Huge Credit Card Debt

Another thought: Living in your semi and going bare bones on expenses is a lot more fun when it's a choice and you're living off of a fraction of your income so you can retire at 40 or whatever, but it's a different story when it's due to necessity. Going to get old real quick!

 

I lived in hotels for a year to beat the system and I was pretty happy to fall into a great deal of an apartment and have a real place this past January.

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 33 of 104
Valued Contributor

Re: Huge Credit Card Debt

I don't know how much work you're willing to put into it, but you can call the creditors/banks yourself and try to negotiate a lowered/hardship APR to pay off your debt (with or without account closure).

I would also try using something like undebt.it (that link takes you to their site they have free and pay accounts, I use a free one), where you can input all of your debts, aprs, and budget to see different ways you can try to pay off your debts faster.

I have to admit, I'm not a huge fan of these consolidation/pay off companies, but I do have a couple of friends who used them to successfully get out of debt.  Whatever you choose, I wish you the best of luck in your pay off.




Garden goal: Completely clean reports and a gold spade (which, at my current rate, is never going to happen...)
Message 34 of 104
Super Contributor

Re: Huge Credit Card Debt


@bdub1234 wrote:

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.


If you don't have much weight on your shoulders, then don't sweat it, just keep your costs down and keep paying off with the snowball method.


FICO8 EQ 749 TU 783 EX 749 Total revolving limits 723k (602k reporting)
Message 35 of 104
Regular Contributor

Re: Huge Credit Card Debt


@bdub1234 wrote:

I again never want to have the type of credit lines I had before but it sounds good as I will still be paying back everything in a few years. without all the compounded interests that after caculated when talking to a financial counselr I would have paid close to 180k in interest, but unlike a BK will still keep my report and score intact, and at most could be out of this in less than 5yrs with a 2300 payment but maybe even 3 yrs with me grinding and putting much more towards that payment. I will only be 31 then and if I keep grinding after paying this off can finally start saving, maybe that 40k plus a year and still be in decent shape, while possibly only taking a small hit to my credit



I will keep this short and sweet based on my experience and opinions. I filed BK7 in 2010 and it was the best financial decision I ever made. I lived a cash lifestyle for a few years and saved the money I would have been trying in vain to repay. I bought a house 5 years post BK, at a great rate. The BK is still on my reports but it doesn’t affect my life or ability to get anything I need. 

 

Please don’t fall into the repayment morality trap. BK is a legal option and morality has nothing to do with it. Treat credit and finances as business decisions, just like lenders and creditors do. Banking and finance sectors in general have the morality of cockroaches, yet there is a social stigma surrounding the morality of debt repayment to these entities. I repeat, BK is a legally permissible option designed to give you a fresh start, use it and be free. 

Amex BCE $15k | Amex ED $15k | Amex BBP $9k | Amex Gold NPSL | US Bank Cash+ $8.5k | Golden 1 CU $10k | Lowe’s $10k | Cap1 QS $10.5k
Message 36 of 104
Regular Contributor

Re: Huge Credit Card Debt

BK is the way to go.  You'll get immediate relief (which is very important), save a lot of money, and in just a few years, you can get back to the 700 scores easily.  My parents went through BK a few years ago and now they can get whatever loan products they want.







Message 37 of 104
Moderator Emeritus

Re: Huge Credit Card Debt

End of the day the only person you absolutely have to live with is yourself.

I could have made more payments to my big honking tax problem but I did not, so really if I were you in your situation I would hit the reset button too and I have issues with such things.

Look if you wish split the difference anyway, maximum income last I checked for a 7 was 50k a year and a CH 13 is really just a way to force a repayment plan that you can afford on the lenders.

If I were you from what you have posted, I would try to negotiate a lower APR from the lenders, but if I could not and I was stuck I would file a 13 and force a plan on them.

There’s no fault to your current plan if you want to pursue it and you feel it is right then go for it... but as others have pointed out there is also no shame in taking what is available to you legally.



        
Message 38 of 104
Valued Contributor

Re: Huge Credit Card Debt

Debt management companies will never recommend Bankruptcy, that is because they get funded by the creditors to prevent consumers from going that route.  I am not saying to not do a debt management plan but I would reccomend speaking with a bankruptcy attorney before making any decision including the decision to just pay off all of the debt over 3-5-7 years etc.  Before I filed back in 2000 I spoke with a debt management company and the counsler was suprisingly candid, he was new and he told me that it was in my best interest to speak to an attorney before entering into a debt management agreement.   I made the tough a pride swallowing decision to file, it was very stressful but within a month of filing I realized how much less stress I had, how my wife and I know longer had the stress of managing debt to deal with in our lives and how for the first time in years we could look forward and plan for a good life. 

Message 39 of 104
Established Member

Re: Huge Credit Card Debt

Hello Everyone, I really appreciate everyones advice/encouragement. So I am now a trainer at my current company, I was just talking to another one of my co workers that I did a class with a while back and I asked how he was doing and suprisingly he said he became a trainer and without me even asking he said he's netting 1500-1600 a week when he is with a student and was very proud to show me lol, and again I just became a trainer. I figured off what I make and how I get paid (I won't explain it all due to always writing long paragraphs) as well as with the assumption most people have lots more expenses coming out their check due to insurances or child support or whatever plus my driving account I am on is more profitable.  I should be able to NET at least 1600-2100k here very shortly about 2 weeks a month while still NETTING a little over 1k on the other 2 weeks a month. So in all I should be netting on a very conserative end at least 5200 to possibly 6200 a month as I am already netting about 4200 a month. I also enrolled in the perdiem program which will give me another $60 a day which is not taxed so I will be netting more each week starting next paycheck

 

I figure even off the low budget I have been setting for my self even if I up it to 1300 a month just due to unexpected things that may occur. I can still put somewhere in the range of 3200-4900 a month towards payments as well as my quarterly bounuses of anywhere from 1000-1500 so 4-6k a year, bonuses from my students once they are on their own and my tax return on this fire to extinguish it. I looked at all my APR's the 2 that are highest are at 27 and 25 percent with a 10k balance and a 8k balance.

 

I just paid off one of my chase cards that had a 700 balance and pushed the balance down a lot on the other to 3700. Feels good to eliminate one balance, but I also am going to start calling some of these lenders and just ask myself for possibly a lower apr or a lower payment that way I can attack this cap 1 balance first with 10k and 27% apr very aggressively. Which once paid off will free up so much more capital to throw on the other ones instead of paying $260 a month just on that cap 1 in interest.

 

I have read that they may still say no but I have a better chance since I have been a long time member with most of these lenders and never been deliquent or late with a payment.

 

This is all with me not doing or accounting for any of the other stuff I mentioned that if all else I could do like living in the truck and starting school again earining another 1600 a month tax free, or in the near future getting a debt consolidation loan after getting these balances down by quite a bit, or even nabbing that 4k a week job in the future but based on where I am at the moment.

 

With cacaulating everything where I am now I KNOW I can still get this paid off within 3yrs maybe a tiny less and up to 3 n a half years by myself without any blemishes on my report. That was with me caculating an average of 23 percent interest which actually a lot of my cards are lower in the 13-19 percent range but still accounting for a few high ones.

 

I am determined to do this mainly because of my pride and my conscience, of knowing I always keep my word and these lenders trusted me giving me a kid at 24-25 over 250k in unsecured credit lines and I would n't  be able to sleep at night feeling like a deadbeat that just said screw you. I ate the steak and now I am going to pay for it, lots of stupid decisons I made along the way such as after my company failing and me being in over 40k debt I just kept trying to get by without any help where maybe I should have asked for a little gov assitance such as food stamps or hud or whatever programs are out there but I continued to use credit and open more credit lines till where it has gotten me now.

 

I know all this money I could be saving but again I somewhat believe everything happens for a reason and this pushed me to get to where I am at now with a good amount of income in a job I actually like so by no means I am not killing my self I like going to work every night that at a career I prolly would not have considered in the past, and once I am done I will still have a perfect credit report that any lender will see and say WOW this guy handled his sh$t was over 100k in debt and did what he had to do and payed as agreed, I also think I am bit more wiser. Every time I look back at things hindsight is 20/20 but never had any family from growing up in group homes and foster care to educate me and always being on my own never able to depend or call anyone else for help, which I appreciate everyone reading and their advice. I have overcame lots of obstacles in my life and accomplished lots and this will just be another one, that I will look back at and laugh and say what was I thinking.

 

I have stopped using my credit cards almost completly, and finally been looking over APRs and caculators to figure this out and actually have plan and budget as before I didnt even know what my APRs were and barley like looking at my accounts would just log in to make a payment then log right back out thinking I am still good till next month.

 

While very expensive this will be a very good learning experience, and I hope I can educate young people or anyone by that matter one day on budgeting and credit. and as someone else said I will still be young early 30's if all willingly while no day is promised I should still have plenty of time then to invest the type of money I am making then and still have a good financial future. Thanka again for reading and I will keep posting regulary on my progress.!!

Message 40 of 104