Drowning in Debt

[sweetland]

Good evening forum. It has been sometime since I have been here. I currently have bit off more than I can chew regarding my debt. I'm starting to get to the point where I'm delaying payments with creditors so that I can afford others.  I have ZERO late pays or delinquient paymets to any creditors but I feel the inevitable is approaching. I have been almost over 800 credit score prior to purchasing my home and maxing out my creditors.

My Scores

Experian App = 699

Credit Karma= 598 Trans 603 Equifax

Chase Credit Journey- 596

My Revolving- (most are maxed w/in a couple hundred dollars)

Discover:            $13,794 19.99%  $200

Chase Sapphire:$22,375 15.99%. $450+/-

Chase #2:           $9,711 23.74%     $604 (currently past due as of 2/14-need to pay asap)

Best Buy Visa:   $4,231 24.24%.    $120/mo

Amex:                 $2,766 25.24%.     $86/mo

My Installment Debt

Lightstream:      $20,669 12.74%.   $450/mo

Vehicle                $52,800                  $934/mo (no equity, cannot re-fi)

*not broken down above is my home and all bills (insurance, electric, gas etc. etc. )

I have made horrible decisions and I need to get back on track. As a last ditch effort I have applied for a discover home equity loan to pay off $50-$70k, if that happens I will have a path to get unburied. In the event that it does not work out, I wanted to be pro-active with my inquiry on this forum. I tried my local credit union for home equity but was denied due to DTI ratio, so my spirits regarding discover is nill.  Does anyone have any recommendations with Consumer Credit Counseling type compaines or any other option that may be recommended?

[SouthernCredit]

I'm sure you've probably looked, but if you haven't, the car market is such right now that you may be able to sell the car outright to a Carvana/Vroom/Carmax type place and get out of the loan (or even make a little). May be worth a look. You'll have to get another vehicle, though, and with the market the way it is that won't be fun either.

A consolidation loan could get rid of your credit card debt and put you in a cheaper payment that might be more affordable.

[sweetland]

I actually never thought of my vehcile, until you posted. I just ran the VIN/Equipment through Carvana and it was $41,200, I was shocked it was even that much but not enough to get me out of it. I would part ways with that thing immediatly If I could get what is owed, or close to. 

I can't seem to get a decent loan as my scores are tanked due to my utilization.  It's soo crazy how this credit/debt ordeal is double edged, I feel. If I could pay my revolving down my scores would skyrocket thus allowing me approval for many prime type loans but because I'm in soo much debt I don't feel like anyone will touch me. 

I thank you for your reply

[disdreamin]

Those are some big numbers, and I am sorry you find yourself in this postition. I know asking about income can seem very intrusive so I won't ask numbers, but it seems like a lot of this will depend on how big your shovel is. If your income is large enough to keep your basics covered (food, housing, utilities), plus pay all of those minimums, and still have a decent chunk left over to start digging away at the highest-interest debt, then that seems like your best way forward.

If your income doesn't support that, I'm personally not sure I'd choose to tie unsecured debt to my primary residence if I could avoid it. I'd be discussing these specifics with someone who knew about debt consolidation and bankruptcy and the pros and cons of each. I wonder if the rebuilding forums here may provide some additional useful insight.

[disdreamin]

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@sweetland wrote:

I actually never thought of my vehcile, until you posted. I just ran the VIN/Equipment through Carvana and it was $41,200, I was shocked it was even that much but not enough to get me out of it. I would part ways with that thing immediatly If I could get what is owed, or close to. 

I can't seem to get a decent loan as my scores are tanked due to my utilization.  It's soo crazy how this credit/debt ordeal is double edged, I feel. If I could pay my revolving down my scores would skyrocket thus allowing me approval for many prime type loans but because I'm in soo much debt I don't feel like anyone will touch me. 

I thank you for your reply

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Honestly, that's horrific. It seems like it's almost impossible to be upside down in a vehicle in this market - even most leases are worth considerably more than their projected residuals. Did you check kbb (kelly blue book) by chance? I don't think the difference will be what you need it to be to get out of that vehicle, but I'd check anyways. Carvana was nowhere near the highest estimate I got when I traded my vehicle.

[SouthJamaica]

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@sweetland wrote:

Good evening forum. It has been sometime since I have been here. I currently have bit off more than I can chew regarding my debt. I'm starting to get to the point where I'm delaying payments with creditors so that I can afford others.  I have ZERO late pays or delinquient paymets to any creditors but I feel the inevitable is approaching. I have been almost over 800 credit score prior to purchasing my home and maxing out my creditors.

My Scores

Experian App = 699

Credit Karma= 598 Trans 603 Equifax

Chase Credit Journey- 596

My Revolving- (most are maxed w/in a couple hundred dollars)

Discover:            $13,794 19.99%  $200

Chase Sapphire:$22,375 15.99%. $450+/-

Chase #2:           $9,711 23.74%     $604 (currently past due as of 2/14-need to pay asap)

Best Buy Visa:   $4,231 24.24%.    $120/mo

Amex:                 $2,766 25.24%.     $86/mo

My Installment Debt

Lightstream:      $20,669 12.74%.   $450/mo

Vehicle                $52,800                  $934/mo (no equity, cannot re-fi)

*not broken down above is my home and all bills (insurance, electric, gas etc. etc. )

I have made horrible decisions and I need to get back on track. As a last ditch effort I have applied for a discover home equity loan to pay off $50-$70k, if that happens I will have a path to get unburied. In the event that it does not work out, I wanted to be pro-active with my inquiry on this forum. I tried my local credit union for home equity but was denied due to DTI ratio, so my spirits regarding discover is nill.  Does anyone have any recommendations with Consumer Credit Counseling type compaines or any other option that may be recommended?

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I don't like to say this but selling your home is one option, and Chapter 7 bankruptcy is another.  I'm not familiar with the consumer credit counseling world, so I can't help you on that.

[Anonymous]

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@sweetland wrote:

Good evening forum. It has been sometime since I have been here. I currently have bit off more than I can chew regarding my debt. I'm starting to get to the point where I'm delaying payments with creditors so that I can afford others.  I have ZERO late pays or delinquient paymets to any creditors but I feel the inevitable is approaching. I have been almost over 800 credit score prior to purchasing my home and maxing out my creditors.

My Scores

Experian App = 699

Credit Karma= 598 Trans 603 Equifax

Chase Credit Journey- 596

My Revolving- (most are maxed w/in a couple hundred dollars)

Discover:            $13,794 19.99%  $200

Chase Sapphire:$22,375 15.99%. $450+/-

Chase #2:           $9,711 23.74%     $604 (currently past due as of 2/14-need to pay asap)

Best Buy Visa:   $4,231 24.24%.    $120/mo

Amex:                 $2,766 25.24%.     $86/mo

My Installment Debt

Lightstream:      $20,669 12.74%.   $450/mo

Vehicle                $52,800                  $934/mo (no equity, cannot re-fi)

*not broken down above is my home and all bills (insurance, electric, gas etc. etc. )

I have made horrible decisions and I need to get back on track. As a last ditch effort I have applied for a discover home equity loan to pay off $50-$70k, if that happens I will have a path to get unburied. In the event that it does not work out, I wanted to be pro-active with my inquiry on this forum. I tried my local credit union for home equity but was denied due to DTI ratio, so my spirits regarding discover is nill.  Does anyone have any recommendations with Consumer Credit Counseling type compaines or any other option that may be recommended?

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Getting whatever low interest/no interest lines of credit is the best course of action.  In addition to applying for a HELOC id look into something like FNBO.  They are giving out 15K credit lines with a soft pull pre-approval and an intro no interest for 12 months promotion.  

Your biggest uphill is paying interest.  to pay things down you need as close to 100% of your payments going to principal as possible.  Any defferment you can get is helpful too.  

That car payment is a big one.  can you sell the car and downsize?  That would be an option I would look into, but i wont fault you if that isnt possible, i obviously have no insight into your life beyond your post, so please dont take that as some criticism, just an option.

A consolidation loan could help prevent missing payments/late payments.  your minimum on a consolidation loan may be lower thent he total of several minimums against all your trade lines/credit lines.

[Anonymous]

I can't help regarding consolidation loans but I have worked with home equity loans for over 10 years. Both lenders have worked for (both top ten banks in the US) will remove debts that are to be paid off with the heloc from dti calculations. Make sure you tell them that's the purpose of the loan. They may require that the payoffs be handled by the bank.  

I'm not sure of your scores but if they're at least 620-640, I believe most lenders would be ok with that. Of course, you have to clear credit, income, title & appraisal also but I feel like a heloc is your best bet at lowering interest and payments.

Not sure where you live but some states won't allow debt not tied to the collateral to be removed from dti. Texas is the main one I know for sure that this applies to. 
Good Luck!  

[chiefone4u]

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@sweetland wrote:

Good evening forum. It has been sometime since I have been here. I currently have bit off more than I can chew regarding my debt. I'm starting to get to the point where I'm delaying payments with creditors so that I can afford others.  I have ZERO late pays or delinquient paymets to any creditors but I feel the inevitable is approaching. I have been almost over 800 credit score prior to purchasing my home and maxing out my creditors.

My Scores

Experian App = 699

Credit Karma= 598 Trans 603 Equifax

Chase Credit Journey- 596

My Revolving- (most are maxed w/in a couple hundred dollars)

Discover:            $13,794 19.99%  $200

Chase Sapphire:$22,375 15.99%. $450+/-

Chase #2:           $9,711 23.74%     $604 (currently past due as of 2/14-need to pay asap)

Best Buy Visa:   $4,231 24.24%.    $120/mo

Amex:                 $2,766 25.24%.     $86/mo

My Installment Debt

Lightstream:      $20,669 12.74%.   $450/mo

Vehicle                $52,800                  $934/mo (no equity, cannot re-fi)

*not broken down above is my home and all bills (insurance, electric, gas etc. etc. )

I have made horrible decisions and I need to get back on track. As a last ditch effort I have applied for a discover home equity loan to pay off $50-$70k, if that happens I will have a path to get unburied. In the event that it does not work out, I wanted to be pro-active with my inquiry on this forum. I tried my local credit union for home equity but was denied due to DTI ratio, so my spirits regarding discover is nill.  Does anyone have any recommendations with Consumer Credit Counseling type compaines or any other option that may be recommended?

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If you're afraid missed payments are coming, consider contacting your creditor's BEFORE you miss the payment and see if they can/will offer a hardship program to you.

Discover can lower your interest (they cut mine in half for 12 months), taking their hardship program will cause charging privileges to be canceled for the term of the hardship (unable to charge anything to the card), but can reduce minimum payments. 

American Express used to offer a hardship program, I'd imagine they still do... might have to miss a payment before they will offer it (typically you only have to be 24 hour's past the due date to have a creditor that requires you to miss a payment allow you into hardship).

Chase used to be willing to offer those who missed a payment a 0%apr for 5 years... trade off, they close the account-- if you pay in full you won't get black listed.

I'm not sure if putting your credit cards into hardship will offer enough help, but is another option. 

I would also look at NADAguides and kbb.com to see what private party prices are on your vehicle, as it's possible selling it yourself will get you the funds needed to pay off the loan.

Hope you find the right combination of changes to get your debt payments back to a manageable level and reduce the stress of playing shell games with payments to stay afloat.

[SouthernCredit]

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@sweetland wrote:

I can't seem to get a decent loan as my scores are tanked due to my utilization.  It's soo crazy how this credit/debt ordeal is double edged, I feel. If I could pay my revolving down my scores would skyrocket thus allowing me approval for many prime type loans but because I'm in soo much debt I don't feel like anyone will touch me.

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You say your Experian app is showing a score of 699. That should be a decent enough score to talk about a consolidation loan. Don't pay any attention to the Credit Karma scores - nobody uses those for lending. Get your actual scores from Fico and see what they are -  you might be surprised.