What to do?

[proudnavymom]

I have worked very hard over the last 9 years to improve my credit and I did so.   I am very proud of the work that I have done.  However in the last few months I have had some financial setbacks and now my monthly expenses are more than the income that I have coming in and for the first time in 10 years I have some credit cards that are reported 30 days late.  I just really don't see any way out of this situation.   What is my best plan of action?  

Thanks.

[DebtStinks]

BK - either CH7 liquidation or CH13 wage earner plan of 36-60 months with surplus income (above normal bills like mortgage, etc)

Debt Settlement - Wait until accounts are ready (but not yet) to charge off or thereafter and offer 10-40% of the original amount...this may result in tax implications, so consult with a CPA or tax attorney for advice on that part

DMP (Debt Management Plan) - These can be done on your own directly with each creditor with most favorable terms coming in the 60-150 day late range....this can also be done via 3rd parties but they don't do it for free and fees vary.

You can tag me or PM me directly if you have more specific questions.

Best of luck going forward and I'm sorry you're going through a difficult financial time.

[Anonymous]

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@proudnavymom wrote:

I have worked very hard over the last 9 years to improve my credit and I did so.   I am very proud of the work that I have done.  However in the last few months I have had some financial setbacks and now my monthly expenses are more than the income that I have coming in and for the first time in 10 years I have some credit cards that are reported 30 days late.  I just really don't see any way out of this situation.   What is my best plan of action?  

Thanks.

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I would try reaching out to each creditor to see if they have any hardship programs or can offer any assistance. Perhaps they could lower the interest or take reduced payments/payment plan or something else to avoid gping further into delinquency to save you from ever more severe derogatory marks. 30d lates you can recover from, but the later the reported lates are the longer the damage will be for. 

If you cannot even do reduced payments/payment plan or they offer no assistance, you will have to choose if you try to slavage some or none of the accounts.

As mentioned abive there are other options, such as BK or DMP, but I would hold out on those options unless you absolutely feel there is no recovering financially in the future.

If you like you can list the creditor/balance/limit/interest rate/payment amount out and how much you have to work with monthly to pay towards them and perhaps we can help you devise a plan.