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I need help.... Coming to the light

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New Member

I need help.... Coming to the light

Ok, so this is hard for me to do, I am swallowing my pride and basically making a stride to move forward. 

So to start this off, in 2011 I had a career field change. I was a restaurant manager making 45k a year. In 2011 I found a career change that well changed my life, GOOD and BAD. in 2010 I made 45k. 2011 I made 78k and in 2012 I made 299k. 2013-105k and 2014-2017- 350k-400k a year. I thought I was rich. Taking trips all over the country, buying 100k mercedes etc etc etc You all know the story. So now after franchising from a parent company, me and 2 business partners decided to split out on our own. In Oct we started our own company, and got our first paycheck in April. And since april its been a weekly decision whether we get a check or not based on whats avalible. (The trials and tribulations of starting a new business). Well the problem is as follows, Im loaded to the GILLS in debt now, and with my uncertain paycheck weekly. Im not sure what to do. 

Debt is as follows

1) American Express- 15k

2) Capital One- 13.4k

3) Discover- 9k

4) Chase- 19k

5) Wells Fargo- 3.6k

6) LendingClub- 8.2k

 

So as you can see, I have quite a bit of CC debt. I am making monthly minimums on most, and have had about 3 late payments this year. My credit is in the tank. I am willing to do whatever is neccesary to get this handled. I just dont know what the best approach is being that my check is up and down weekly. Minimums on 60k in CC debt is outrageous as you all know. The only caveat is When you want to consolidate them with a loan, they deny you because you have too much CC debt. Catch 22. 

 

Please let me know what options I have or what options I should explore. 

 

Sincerely, 

BadSituation2018

 

Current situation is Sitting at a 564 Fico

Cards are all pretty much maxed. 

8 REPLIES 8
Highlighted
Regular Contributor

Re: I need help.... Coming to the light

Sorry to hear the stress your under. I’ve been there and so have many other members on here. By chance have you contacted he creditors and informed them of your situation? Some will work with you and it’s def worth a shot. Do you have any cards with some credit left you could do a BT?

Focus on the cards with the highest apr and pay more than the minimum IF you can.

Good luck to you and hope it works out.
Message 2 of 9
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Super Contributor

Re: I need help.... Coming to the light

From your recent years of income, and setting out for your own business, it seems you have a plan to earn substantial income. The $70k of debt is a lot of debt, and your best option for the time being may be to just make the minimum payments.

 

Do you have enough cash flow to cover minimum living expenses? This would be only rent/mortgage, any car payment, vehicle gas, home utilities, food, and clothing for work, plus the minimum CC payments? No vacations. No movies out, no eating out, just the basics? Because if you do, then my suggestion is to only do the minimum payments, and focus all your energy on making your business a success. In the long run, that will provide you with enough income to take down the debt quickly. The lates are there, and as long as you don't incur any more lates, those will age off eventually. With time, and on-time payments, all FICO scores rise.

 

Spending time and energy now trying to sort this lump of debt is going to take away from your better opportunity, and as you are finding, the options you have to sort this lump are quite limited, not much savings available for a lot of effort necessary. Even the quest for rewards cards is only going to give you a small return, for what may be wasted time better spent on growing your business.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 3 of 9
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New Member

Re: I need help.... Coming to the light

I do have plans of substantial income. Its gonna be successful as we have just started to turn profit. Starting up expensive.. we have done 2.2 million in sales In six mths. But our expenses to date have been 1.9mil. But as with any new business to be black or green after 6 mths is a great thing. I'm just sick over this debt. I have 2 kids and a wife. I can pay my mortgage (2k) and car payments (1.5k) and kids school etc. I just want to have this off my back. My other business partner who had about 50k in cc debt just quit paying his. I don't wanna go that route as 1) it's just not right 2) I don't want the long term consequences of that.

I'm young (34) and don't need to buy anything large in the foreseeable future (1-2yrs). My credit can be rebuilt. I just need some guidance on what the best move is. And it may be to just pay minimums. Try to keep everything current and focus all energy Into grinding this beast Into the green as hard as poasible..
Message 4 of 9
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Super Contributor

Re: I need help.... Coming to the light

In credit scoring, the only absolute rule to follow is “always pay at least the minimum payment on time”. And have at least one revolving credit card report a balance.

Everything else, how much more to pay, whether to pay interest, utilization levels, are choices of how you use credit. The high utilization choice has consequences limiting further access to credit, but it is still just a choice you can change later on.

Make the business a success and the debt can be handled later.
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 5 of 9
Highlighted
New Member

Re: I need help.... Coming to the light

I've considered selling my house, which I have about 100k in equity in. And paying it all off.. renting for 2-3 years then buying another house. Just don't know of that makes much sense..
Message 6 of 9
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Community Leader
Super Contributor

Re: I need help.... Coming to the light

Hi OP

First, like another MyFICOer said, contact your creditors and ask if there are any solutions they can offer.

Like another said, many of us have been in your shoes.

Second, since this is definitely a huge debtload, you may want to speak with an Atty about your options for filing Chap 13–repayment of debt through reorganization, especially since you still have income coming in. This will relieve a great deal of the pressure. And you’re still paying your debt—not having it discharged through a Chapter 7.

Third, $1,500 for carnotes is extremely high. From your stated lifestyle, I’m assuming this is for two luxury cars. Can you sell the most expensive one to free up funds?

Fourth, is there any equity in your home that you can tap into to pay off 1, 2 or 3 of the CC debts.

The good thing is you haven’t just stopped paying your debt. Kudos to you for realizing your mistake and taking responsibility for it.

This forum is great for giving step-by-step guidance. If you feel comfortable with doing so, provide your monthly income, the APR for each card, the minimum pymts, the CL of each CC, and provide any other outstanding loans you’re responsible for. We’ll try to provide more detailed options.

GL2U and breathe. You’ve already made the first step.


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || CitiCostco $12.7K || NFCU Platinum $12.5K || Apple Card $6.5K ||
Message 7 of 9
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Super Contributor

Re: I need help.... Coming to the light


@BadSituation2018 wrote:

Ok, so this is hard for me to do, I am swallowing my pride and basically making a stride to move forward. 

So to start this off, in 2011 I had a career field change. I was a restaurant manager making 45k a year. In 2011 I found a career change that well changed my life, GOOD and BAD. in 2010 I made 45k. 2011 I made 78k and in 2012 I made 299k. 2013-105k and 2014-2017- 350k-400k a year. I thought I was rich. Taking trips all over the country, buying 100k mercedes etc etc etc You all know the story. So now after franchising from a parent company, me and 2 business partners decided to split out on our own. In Oct we started our own company, and got our first paycheck in April. And since april its been a weekly decision whether we get a check or not based on whats avalible. (The trials and tribulations of starting a new business). Well the problem is as follows, Im loaded to the GILLS in debt now, and with my uncertain paycheck weekly. Im not sure what to do. 

Debt is as follows

1) American Express- 15k

2) Capital One- 13.4k

3) Discover- 9k

4) Chase- 19k

5) Wells Fargo- 3.6k

6) LendingClub- 8.2k

 

So as you can see, I have quite a bit of CC debt. I am making monthly minimums on most, and have had about 3 late payments this year. My credit is in the tank. I am willing to do whatever is neccesary to get this handled. I just dont know what the best approach is being that my check is up and down weekly. Minimums on 60k in CC debt is outrageous as you all know. The only caveat is When you want to consolidate them with a loan, they deny you because you have too much CC debt. Catch 22. 

 

Please let me know what options I have or what options I should explore. 

 

Sincerely, 

BadSituation2018

 

Current situation is Sitting at a 564 Fico

Cards are all pretty much maxed. 


1. You're young and have good prospects for a much better and more regular income, so don't panic.

2. You need to reduce expenses for now, so yes selling the house is a good idea, and IMHO you should sell the Mercedes.

3.  Keep making your minimum payments + $5.

4.  Once your income gets better, start paying everything down with the snowball method: (a) stop using credit cards (b) pay off lowest balance first, then next lowest, and so on.

5.  IMHO you and your partner should decide on a minimum paycheck that you get each week.


Total revolving limits 653000 (575000 reporting)

Message 8 of 9
Highlighted
New Member

Re: I need help.... Coming to the light

I agree with the Mercedes. I'm reaching out to some of my contacts to see if I can move it quickly..
Message 9 of 9
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