Hello All:
Happy New Year all !. I am seeking some advice on how to resolve my mountain of debt. Attached below is a summary:
My monthly payment on all these loans and credit cards is close to $2K, but I have only been able to pay half of that (including the minimum on most of my cards), causing me to fall behind.
I have been trying to settle some of the smaller debts or pay them off entirely. Currently, I have a monthly payment agreement of about $80 with Upstart for a 60% settlement, and contemplating closing my American Express Card, offering them a settlement paid by installment.
My greatest concern is the Onemain Loan and Plaza (NetCredit):
-- The OneMain loan is secured by my vehicle, with a monthly payment of approximately $800. One main has given me some deferment of about $400, but I have exhausted those, and now I have to start making regular monthly payments this month. On top of that my vehicle that was collateral has also broken down with repair expenses (transmission) that exceed the market value of the SUV.
-- Plaza is after me for collection on a NetCredit loan: originally $5,000, but has almost doubled in its balance.
-- I am barely able to make a minimum payment on most of the credit card balances.
Thus, I am exploring options on paying down these debts over time. National Debt Relief contacted me, and quoted a monthly payment of $700 for my total debt of about $50,000 (cc's and loans). I am aware of all the caveats of debt management program: short term hit on my credit, and loss of access to credit (which at the moment is immaterial since I am already maxed out and don't use my credit cards that much)
My current employment does not give me a lot of options for a second job, hence I have no source of part-time/extra income to help pay down my debts, except from my monthly paycheck.
If I can afford the ~$700 that they are proposing, it is a viable or advisable option in these circumstances? If not, what other options can I explore?
Thanks again for all your thoughts..
cheers, Oy
@Oyiwaa wrote:Hello All:
Happy New Year all !. I am seeking some advice on how to resolve my mountain of debt. Attached below is a summary:
My monthly payment on all these loans and credit cards is close to $2K, but I have only been able to pay half of that (including the minimum on most of my cards), causing me to fall behind.
I have been trying to settle some of the smaller debts or pay them off entirely. Currently, I have a monthly payment agreement of about $80 with Upstart for a 60% settlement, and contemplating closing my American Express Card, offering them a settlement paid by installment.
My greatest concern is the Onemain Loan and Plaza (NetCredit):
-- The OneMain loan is secured by my vehicle, with a monthly payment of approximately $800. One main has given me some deferment of about $400, but I have exhausted those, and now I have to start making regular monthly payments this month. On top of that my vehicle that was collateral has also broken down with repair expenses (transmission) that exceed the market value of the SUV.
-- Plaza is after me for collection on a NetCredit loan: originally $5,000, but has almost doubled in its balance.
-- I am barely able to make a minimum payment on most of the credit card balances.
Thus, I am exploring options on paying down these debts over time. National Debt Relief contacted me, and quoted a monthly payment of $700 for my total debt of about $50,000 (cc's and loans). I am aware of all the caveats of debt management program: short term hit on my credit, and loss of access to credit (which at the moment is immaterial since I am already maxed out and don't use my credit cards that much)
My current employment does not give me a lot of options for a second job, hence I have no source of part-time/extra income to help pay down my debts, except from my monthly paycheck.
If I can afford the ~$700 that they are proposing, it is a viable or advisable option in these circumstances? If not, what other options can I explore?
Thanks again for all your thoughts..
cheers, Oy
To be clear, NDR is a for profit company that is not an accredited credit counseling service. They are a "debt relief" company. This is not at all like a true Debt Management Plan (DMP).
A true DMP can have less negative impact on your credit but also like DR, they are generally only for unsecured debt and may be of little help on a secured debt like a car loan. Going the debt relief route with the expectation that your credit will recover in a short amount of time is simply untrue, and unrealistic. It will tank your scores for 7+ years. They have no special powers, inside knowledge, or connections to do anything for you that you can't do yourself with the same results... for free. DRCs are there for one reason, to appeal to your vulnerability and make money off you.
They'll advise you to stop paying your bills. From there, unlike a BK, your accounts will charge off one at a time staggered down the calender. The charge offs alone will put you on a dirty scorecard for two years from the time the last serious delinquency/status reports, provided there are no more serious delinquency (60 days late or worse). Also unlike a BK, you'll have no legal protections from collections, or being sued over the debt. There's also no guarantee the creditors will be open to "settlement for less" right away, or at all
You should be fully aware that legitimate credit counseling agencies that administer true DMPs are non profit organizations. Many of them are approved by the Dept. of Justice. If you go that route I would search the DOJ, or your State Attorney General's office for a list of approved agencies to assist you on that path.
I'm not advocating you file bankruptcy, but rather consider all your options more carefully and at the very minimum, go speak to a BK attorney.
@JoeRockhead wrote:
@Oyiwaa wrote:Outside of securing a loan with a decent interest rate and large enough ($50k) to cover all your debt, I don't believe that getting a $10k loan is really going to help you. It's more like kicking the can down the road... and not very far down the road. The problem with the One Main account is it's secured by your vehicle. Neither a DMP, or debt relief is going help you there. I don't know that they'd be all that open to settling the account for less than you owe. They could realistically refuse anything less than full payment and just come repo the vehicle.
I admire your desire and drive in trying to keep up with everything, and avoid bankruptcy. Realistically, it sounds as though you're too far under water without a viable way out. I think it would do you a lot of good to go sit down with a bankruptcy attorney and explore the pros and cons of ch 7 and ch 13 BKs. You might find that it's best to just start fresh without the worry of continuing to scramble to make payments, or being sued. Many people who file BK find that it not only brings them financial relief, but more so, peace of mind.
this is the answer, one thing you could do (and you should do prior to meeting a BK attorney) is writing down all sources of income vs. all expenses in a giant list, to see how much you make vs. how much you bring in
then figure out if you can make more money or cut expenses
and if you truly can't make the numbers work, BK is likely the best way forward.
as a plus though, creditors treat you way better after a BK then they ever will universally defaulting/going through 'debt consolidation' on everything
