What course of action should I take?

[hockeymom2119]

Hello all and thanks for reading. 

Not even sure where to start, but in a nutshell, I am in huge debt - probably about $125k of unsecured credit card and personal loans with very high interest. Partly my own irresponsibility in needless spending and partly other reasons which I won't go into. I have a car that is going to be paid off in about 6 months and a home that I own with my parents. It has a lot of equity, but the equity is theirs (they paid their half cash and mine is the mortgage). I can't file BK because of that.

I've seen advertisements for various types of credit counseling, debt management, debt consolidation, etc. I'm not sure of the terminology of these programs or the differences of each, but am looking for opinions on what the best course of action is. I am current on everything and my scores are about 650 for all three. I make good money, but working 3 jobs to support this debt. 

I've been corresponding with a company that would contact my creditors (unsecured) and negotiate a balance. I would pay monthly into an account and they would pay my creditors. To start, I would just stop paying them for a few months and then the company contacts them to say I'm in this program. It seems a little shady to me. They gave me a monthly figure that I will pay and how much I will save, but how do they know this when they haven't contacted them yet. I'm just unsure about all this and would like opinions on what road to take.

[Anonymous]

Programs like this sometimes leave out details. You'll pay into the program for a determined number of months or years. They will tell you that if you agree to pay said amount over the months, they will negotiate settlements with your creditors. Their "few months" passing before they contact your creditors won't be a few months, it will more likely be 9-14 months and by then you will be 120+ days late or in charge off status with all those creditors. The idea is to settle 50% or so with your creditors and creditors won't settle at that rate usually until you are in the 120+ or charge off status. Also, the agreed payment with the program? Yeah, that will end up being more because all those accounts have now incurred late fees over those months of non-payment. In the end, you'll get those creditors paid, you'll have a huge hit on your CR which will eventually rebound a couple years later. I wouldn't do it unless it is an absolute last resort and you are not able to negotiate with you creditors yourself. Just my two cents! Best of luck.

[gdale6]

I dont see a problem with a CH-13 BK filing, the mortgage and other secured creditors all get their due first before any unsecured does. There are also some DMPs out there. Might checkout consumercredit

[Anonymous]

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@hockeymom2119 wrote:

Hello all and thanks for reading. 

Not even sure where to start, but in a nutshell, I am in huge debt - probably about $125k of unsecured credit card and personal loans with very high interest. Partly my own irresponsibility in needless spending and partly other reasons which I won't go into. I have a car that is going to be paid off in about 6 months and a home that I own with my parents. It has a lot of equity, but the equity is theirs (they paid their half cash and mine is the mortgage). I can't file BK because of that.

I've seen advertisements for various types of credit counseling, debt management, debt consolidation, etc. I'm not sure of the terminology of these programs or the differences of each, but am looking for opinions on what the best course of action is. I am current on everything and my scores are about 650 for all three. I make good money, but working 3 jobs to support this debt. 

I've been corresponding with a company that would contact my creditors (unsecured) and negotiate a balance. I would pay monthly into an account and they would pay my creditors. To start, I would just stop paying them for a few months and then the company contacts them to say I'm in this program. It seems a little shady to me. They gave me a monthly figure that I will pay and how much I will save, but how do they know this when they haven't contacted them yet. I'm just unsure about all this and would like opinions on what road to take.

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Just my 2 cents.  I would stay away from that company (I think I know who it is, not sure if I am allowed to mention name here).  I spent the last 3 years doing the same things with a company that promised the moon and it resulted in 2 law suits, 2 default judgements and an additional $17K vs what they “guaranteed”.  It was an extremely painful process.  Looking back now, I would have rather handled the negotiating and dealing with the creditors myself.  I really don’t have too many suggestions other than calling the creditors and explaining your situation.  Some may be willing to work with you while others may not. 

[Anonymous]

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@hockeymom2119 wrote:

Hello all and thanks for reading. 

Not even sure where to start, but in a nutshell, I am in huge debt - probably about $125k of unsecured credit card and personal loans with very high interest. Partly my own irresponsibility in needless spending and partly other reasons which I won't go into. I have a car that is going to be paid off in about 6 months and a home that I own with my parents. It has a lot of equity, but the equity is theirs (they paid their half cash and mine is the mortgage). I can't file BK because of that.

I've seen advertisements for various types of credit counseling, debt management, debt consolidation, etc. I'm not sure of the terminology of these programs or the differences of each, but am looking for opinions on what the best course of action is. I am current on everything and my scores are about 650 for all three. I make good money, but working 3 jobs to support this debt. 

I've been corresponding with a company that would contact my creditors (unsecured) and negotiate a balance. I would pay monthly into an account and they would pay my creditors. To start, I would just stop paying them for a few months and then the company contacts them to say I'm in this program. It seems a little shady to me. They gave me a monthly figure that I will pay and how much I will save, but how do they know this when they haven't contacted them yet. I'm just unsure about all this and would like opinions on what road to take.

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You can essentially do this yourself if you stop paying, diligently SAVE everything you used to pay, and have that money to settle for a % of the balance as each one comes (seriously) knocking.  The effects to your credit would essentially be the same.

As a previous poster said, I think I'd talk to a CH13 bankruptcy lawyer first. You should be able to protect the house and once it's over, I think you might even rebuild your credit faster. Your repayment would be based on your income, so I would think about quitting a job or two and filing a few months down the road.

[SouthJamaica]

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@hockeymom2119 wrote:

Hello all and thanks for reading. 

Not even sure where to start, but in a nutshell, I am in huge debt - probably about $125k of unsecured credit card and personal loans with very high interest. Partly my own irresponsibility in needless spending and partly other reasons which I won't go into. I have a car that is going to be paid off in about 6 months and a home that I own with my parents. It has a lot of equity, but the equity is theirs (they paid their half cash and mine is the mortgage). I can't file BK because of that.

I've seen advertisements for various types of credit counseling, debt management, debt consolidation, etc. I'm not sure of the terminology of these programs or the differences of each, but am looking for opinions on what the best course of action is. I am current on everything and my scores are about 650 for all three. I make good money, but working 3 jobs to support this debt. 

I've been corresponding with a company that would contact my creditors (unsecured) and negotiate a balance. I would pay monthly into an account and they would pay my creditors. To start, I would just stop paying them for a few months and then the company contacts them to say I'm in this program. It seems a little shady to me. They gave me a monthly figure that I will pay and how much I will save, but how do they know this when they haven't contacted them yet. I'm just unsure about all this and would like opinions on what road to take.

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1. Congratulations on staying current with everyone. No mean feat. And much respect for working 3 jobs.

2. I don't think you should get involved with those companies or anything promising a debt solution.

3. I don't think you should "settle" any debts, because each "settlement" usually winds up being a long term derogatory item in your credit reports.

4. My advice is to stay the course, and to use the snowball method:

- Stop using cards.
- Pay off smallest balance first, then next smallest, and so on.
- 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.

[Anonymous]

@hockeymom2119, Pm me I am in the same situation but making good progress, I am paying mine off was at 112k at very peak very high interest though on some, I need more info because I am telling you now, I am making very good progress down to about 98k now in a matter of 5 months and still have 1k in my pocket for a rainy day, plan on being at or goal 80k at tax season but jounrey keeps getting easier I promise.

I am not  a finacial expert or someone with a fancy degree just a hard working sob that said F this I am not letting someone else control my life but someone was just in the same spot if not worse with the high interest and I have found ways to start conquering this debt to less than 100k now in a pretty short time, again same as you my first massive debt I  just kept making more mistakes and not doing what I should have a long time ago, but the present is here and only to move forward not dwell.

If you get negative pm's or public ones ignore them, I have at this point, but I have a plan lol like kevin bacon in Tremors agian I have a great sense of humor, with all of this and what I have done so far to get down and to where I am and continue this, It all starts with you, without knowing your situation its def a dark hole to dig out of, which some people may judge you on this forum and say its impossible, everything is relaveant to 1 person not all, I have paid over 12k in debt in 4-5 months which some people that is there panic attacks, but no one can tell the exact person you are, just because someone else can't do something or the odds are against you, you don't let it discourage you, as I have not, lol Im listening to Flying Home from the Kickass soundtrack, lol I am cheesy but simple and just hearing the orchestra hit motivates me, anything to keep me motivated, and I am definiteley on track to pay my debt off in 3 yrs possibly less the faster the better, I can work hard now or drag something out. I decide the first, then I move on with my life.  Yes It sucks because I could be saving a lot of money, and I am living very cheap, but I just continue to get up and work everyday and meet people at places I never thought I would be that live homeless and their plasma donation is just enough for food or ebt ssi at dollar tree is all they have, again can't be blessed enough to know where I am and my mindset and know this will pass in no time,  but as I have put from my first post I have never screwed anyone over when it comes to money and don't intend to now, if they are large corparations, I look at it this way I ate the steak now I pay for it no matter what the stances were, and I don't like anyone controlling my life putting public statments and ruining my reputation, I just get madder and I am at boiling point on paying this off now just to say FU Creditors and your interest lol. I was not joking when I am like Rocky in any fight, I am not quitting and have a plan, and some other contributiors such as Tacoply/Save in invest and many others may assit, but just take the negative comments as more fuel to the fire.

I am like you working multible jobs and paying this off, again need so much more info, because again I may be making much less than you but have fewer obligations, so many questions? I may be able to help with I would just need full story or at least partial of where you are? PM ME, again I can't see filing BK for myself when I can pay this off in 3 yrs but not sure your situation, again I am willing to go live in my truck and hav been living now on a deflated air matteress now I swear it does not bother me but most can't imagine even though its not that bad maybe not sure where you are.

Also you are right don't rely on a debt settlement if you can't pay within a very fast settlement time, again, I can go into detail with everything I have learned from BK to Settlement, to Management to hardship programs,

I am someone going through this right now, I plan on being debt free in 3yrs no matter what others say because I know my work ethic and where I am now, I am sure people will say how come I was not there before? I was just not making enough and was depressed, but yes was stupid by not budgeting and possibly taking state help or fed help back then, but I am still here now and progressing like a freight train now at full speed, never being deliquent and will do everything I can to put this debt to rest very soon. I don't expect all my creditors to work with me as they are not, it was my fault I used it iresponssibly but I am amending this real quick, and when I say quick I mean 3yrs it took me about 4yrs to get into this and I will be out of it in less.

so many questions, are you behind already?, credit report?, Income? living expenses?, assets?, to many to list but please feel free to contact me PM as I can tell you I am down to less than 6 figures now in 5 months or less, or read my tons of other post, but if you want suggestion on different programs I can def help and tell you pros and cons, from what I have learned. Just taking it day by day.

Thanks I hope you reach out to me

[CYBERSAM]

You own a house with equity, that is huge!

Talk to your parent/partners, get a home equity loan and make sure you pay that. Payoff the highest interest rate debt.

Whatever is left make a 3 year payoff on your statement and should reduce your debt significantly.

Oh and lock all your CCs and go cash/debt card only from now till your all paid off.

Unfortunately credit counseling companies are short of predators that out to make money off of you. Stay away. If you go through them is going to take you many years to get clean record, if that...

You own a house and make money. Just reduce the high interest rate balances and you should be good in couple of years. You are in much better shape than you think.