Closed Two Credit Cards -- Now What?

[kaybean22]

I was SO CLOSE to paying off al my credit card debt a few years ago and had improved my credit score to over 700. In the past few years, i've destroyed all that, lived WAY beyond my means and racked up over 40k in credit card debt.

Because of my financial situation, I decided just to close those 2 cards and setup a payment plan to avoid bankruptcy. (Other debt includes a personal loan, student loans, and my car which i just refinanced for a lower monthly payment.) Aside from the personal loan - which is cosigned with my father -- it's all pretty manageable.

The banks are noting the accounts are closed due to deliquency (not true, but whatever.) What happens if I fail to make payments? Curious what the financial and potential legal process is if I totally default on these accounts --- not the plan, just trying to get info. 

[Anonymous]

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@kaybean22 wrote:

I was SO CLOSE to paying off al my credit card debt a few years ago and had improved my credit score to over 700. In the past few years, i've destroyed all that, lived WAY beyond my means and racked up over 40k in credit card debt.

Because of my financial situation, I decided just to close those 2 cards and setup a payment plan to avoid bankruptcy. (Other debt includes a personal loan, student loans, and my car which i just refinanced for a lower monthly payment.) Aside from the personal loan - which is cosigned with my father -- it's all pretty manageable.

The banks are noting the accounts are closed due to deliquency (not true, but whatever.) What happens if I fail to make payments? Curious what the financial and potential legal process is if I totally default on these accounts --- not the plan, just trying to get info. 

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Worst case scenario - they charge off the accounts,  then send them to collections - two major derogs for each one, then they sue, get a judgment, and there two more major derogs. Judgement means a lien on any real property you own, and potentially a wage garnishment of as much as 25% of your take home pay.

Depending on your income, BK may be something to consider.

[Unfaithful]

That's how I started and then realized it was bringing me no where. Filed For BK 7 and never looked back. Such a financial relief. I wish I would have thought about that way before. Just my 2 cents. 

[kaybean22]

My husband has horrible credit as well, and I am in WAY over my head in debt -- like, it's half our monthly bills. We have everythign we need -- a great apartment, my car (which we are happy to keep paying for), etc. We don't really want to buy a house, and we don't want to live on credit (though having something to use to pay for things like airplane tickets, etc, would be helpful. We actually just got approved by our "new" local bank for a really great card.

Is there a person, aside from a BK lawyer, we can talk with? I appreciate all the advice on here and other forums, but I feel like I need a professional to look at my situation and give me an honest opinion of how eff'd I am. If BK is what I have to do, that's fine. I just really want to know what my reasonable options are. 

[Anonymous]

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@kaybean22 wrote:

My husband has horrible credit as well, and I am in WAY over my head in debt -- like, it's half our monthly bills. We have everythign we need -- a great apartment, my car (which we are happy to keep paying for), etc. We don't really want to buy a house, and we don't want to live on credit (though having something to use to pay for things like airplane tickets, etc, would be helpful. We actually just got approved by our "new" local bank for a really great card.

Is there a person, aside from a BK lawyer, we can talk with? I appreciate all the advice on here and other forums, but I feel like I need a professional to look at my situation and give me an honest opinion of how eff'd I am. If BK is what I have to do, that's fine. I just really want to know what my reasonable options are. 

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You can try different BK lawyers, they usually have free consult and you may get different opinions from diff lawyers.

Some employer's also offer Wellness benefits that include credit counseling, etc

best of luck!

[Anonymous]

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@kaybean22 wrote:

My husband has horrible credit as well, and I am in WAY over my head in debt -- like, it's half our monthly bills. We have everythign we need -- a great apartment, my car (which we are happy to keep paying for), etc. We don't really want to buy a house, and we don't want to live on credit (though having something to use to pay for things like airplane tickets, etc, would be helpful. We actually just got approved by our "new" local bank for a really great card.

Is there a person, aside from a BK lawyer, we can talk with? I appreciate all the advice on here and other forums, but I feel like I need a professional to look at my situation and give me an honest opinion of how eff'd I am. If BK is what I have to do, that's fine. I just really want to know what my reasonable options are. 

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For your situation, I would recommend you do the Dave Ramsey plan. Visit his website, and get his book "Total Money Makeover".