Stuck and don’t know what to do

[wendyh17]

Earlier this year, I racked up about 18K in additional expenses due to a family member's illness. Unfortunately, this meant that I had to stop paying my credit cards for a span of 4 months as all available funds were directed towards the 18k. My credit is ~500 and two creditors have already closed my accounts for delinquency. I don't know what to do from here as I never had missed a payment on any account prior to this year or had any collections. I am back on track now but my credit is through the floor with at least 3 late payments for each creditor.

I'd hate to have to go into bankruptcy as I was hoping to buy a home sometime in the next two years. I looked at some pay for delete forums but not sure how much that would help considering that removal from a collection agency won't impact negative remarks by the OC. Any advice on next steps is highly appreciated.

for reference –

Total Debt: 47k amongst below balances

Amex: bal- 6200 APR- 23.99% | 3 late payments; closed as a result

Citi: Bal-1200 APR- 21.99% | 3 late payments

US Bank: Bal- 5700 APR- 23.49% | 3 late payments

Barclays: Bal- 6900 APR- 24.99% | 3 late payments

PP Credit: Bal- 3000 APR- 25.49% | 4 late payments; closed a result

Cap One: Bal- 6300 20.89% | 3 late payments

TD Bank: Bal- 3000 APR- 24.40% | no lates as I forgot it on autopay

Commenity Bank: Bal- 1000 APR- 23.44% | 3 late payments

Synchrony Bank: Bal- 3000 APR- 24.99%| 3 late payments; closed as a result

Suntrust/Truist personal loan: Bal- 10000 APR- 12.44% | 1 late payment reported but I've missed 3

All accounts except the personal loan are over their their limits by $200.

no accounts are in collections yet.

[FinStar]

@wendyh17 - so that the community can provide guidance on your question(s), can you provide more details on: (1) the balances/limits on each of your current accounts as listed, (2) the APRs on each of these, (3) the accounts that went into collections and their balances, (4) the accounts that had the late payments.

Also, two threads on the same subject have been removed. Please refrain from posting in multiple forum areas on the same topic as it's against our TOS and it can lead to confusion by the community. Thanks for your understanding on this.

[wendyh17]

@FinStar Understood, thank you. I've updated my original post. 

---

@FinStar wrote:

@wendyh17 - so that the community can provide guidance on your question(s), can you provide more details on: (1) the balances/limits on each of your current accounts as listed, (2) the APRs on each of these, (3) the accounts that went into collections and their balances, (4) the accounts that had the late payments.

Also, two threads on the same subject have been removed. Please refrain from posting in multiple forum areas on the same topic as it's against our TOS and it can lead to confusion by the community. Thanks for your understanding on this.

---

---

[FireMedic1]

If your looking at PFD. Then pay to keep the remaining accounts open. Cut back on all expenses and apply it to the debt. BK should be your last resort. You can call some creditors and they can work out a payment plan with lower interest rates until your caught back up. Everyone is hiring for part time work for a decent wage. You could take on a second job to help out. Or donate your plasma that pays well. Least you dont have any charge offs and you want to aviod that mess.

[Anonymous]

Hi,

I disagree with BK as last resort.  If you have to donate plasma like above poster suggested, you might as well file BK since they're going to suck you dry anyways....get it?  In all seriousness though, since you have no house and I'm guessing not much assets, BK should be an option for you to get a fresh start.  You are at a crossroad where I was 6 months ago, you will need to decide soon and don't leave any options out.  Best thing for you is to be honest with yourself.  Are you able to pay off $47K of debt with interest and fees AND obtain mortgage in 2 years?  

If, however, your finances right now allows you to pay some of your debt but not all, I would look into settlement options where you pay a % of your debt and not file BK. If you are able to do this, your timing is perfect since you are getting to the sweet spot where your creditors will soon negotiate before charge off.  Start settling with those that sues, i.e. Citibank, Cap 1, Amex, etc.  Damage to your credit score is significant right now, but it will recover, and so will you.  Good luck.  

[Anonymous]

I dont think BK should be off the table as more then a last resort, but i would table it until you have done the math and been truthful with yourself on the situation.  I'd start here:

How much can i realistically allocate monthly to this debt?

47K is a big number, but 47K @ 20+ APR is the bigger hurdle.  paying minimums wont chip away at the debt and $500-$1000 in interest monthly is tough money to pay.  So if you do plan to try and repay all/some of the debt, I would strategize how to minimize or delay interest payments.  I dont love the solution in most instances but given your lates and closures a debt consolidation loan, even if at 15% APR would likely help you out.  Some will require you to close accounts but some will allow you to keep some/all open.

Leveraging creditors to get on a payment plan to reduce the total debt would be ideal as well.  alot of collection agencies wont charge interest either if you are paying consistently.

Next, I wouldnt worry about your credit score for now.  its going to be ugly and all you can really do is wait for things to drop off and pay down the debt.  Diluting 47K in debt with new lines of credit will be difficult given your lates/closures/score so i would focus on strategies to pay it off.  odds are by the time you pay it off, it wont be TOO long before some of those drop off.  (relatively speaking)

[gdale6]

Im sorry to say in all reality your home purchase in 2 years is not possible at this point unless they are all paid off and if you cannot do that a BK would most likely be in order. You can qualify for an FHA loan 2 years post BK filing.