After the loss of my husband's job and some very poor choices, we have found ourselves in a mountain of debt. Thankfully, he has a new job but at a slight pay cut for now. I do not know if we should file BK to rid the debt? We want to keep our house. Is there a way to file BK on everything except the house? If I were to try to pay off the debt (which we want to do), is CCCS better than doing it myself? We pay over $2600 per month in minimum payments. We feel like we are drowning. So far, nothing has been paid late but our credit scores are not that good because of the very high balances on the cards. I don't know how much longer we can juggle. We have extensive equity in our home, but no one wants to refinance it for us because out DTI is too high at this very moment and the scores hovering around 620-670. Does anyone have any advice?

110K? I'd consult a BK attorney.

My sister filed BK and was able to keep her house (although she lost it a year later in foreclosure).

Thanks Squirrel girl - after reading another post where someone was bashed really bad for lifestyle choices, I may have to re-think the entire idea of "asking for opinions". We are willing to make changes and have already started doing so. We have 123K in income (gross) so I am grateful to have a large shovel. Just trying to weigh the pros and cons at this point.

have you plugged the numbers into one of the "snowball" spreadsheets pinned up top?

btw, CCCS can not do anything for you that you can't do yourself

Have you called your creditors to ask about lowering interest rates?

Hi HDIGTF:

Don't be afraid! We don't normally bite. Many here have been where you are and we all have made our own lifestyle choices for better or worse. I for one, will never let go of highlights and a good cut. I won't go to students, i won't go to supercuts. I will eat rice and beans if i have to just to make sure i have good hair I did let my eyelash extensions go...and i miss them terribly!

It sounds like you are very open to ideas which is all that matters. Many people here will spend a lot of time going running through your numbers and giving you suggestions. I think you will find people here are blunt, but generally kind and supportive.

Having said that, if you make a decision to do something that members here don't think is in your best interest (ie - i am walking out on all my debt, but i have decided to keep my yacht), no one will be shy about telling you they don't like it. If your children aren't eating and you have cable, someone will tell you to cut the cable. Things will only get ugly if you tell us your children don't need to eat as much as you need to watch Bravo.

Here is a thread that you might find more helpful:
http://creditboards.com/forums/index.php?showtopic=332455

Keep in mind, that is the second thread klesko posted. The first one, he was weighing the option of a 'passive bk' ie: not declaring bankruptcy but just stopping his payments. Most people here felt that he was very likely to get sued because of his income and because of the amount he owed. So, in the beginning people are kind of hard on him, but if you get to the later part of the thread, there are some really good suggestions about how to negotiate with his creditors to get the interest stopped..etc..

I think you could probably apply some of those principles to your situation.

In general, most people here will tell you to either BK or 'build your own CCCS plan'. (as jenn just did) In other words, you can negotiate everything that a CCCS can, but you can do it in a way that also protects how a creditor will report on your credit report. A CCCS plan will generally be as bad or worse than BK for your CR.


If you are weighing doing your own CCCS plan and want to post all your expenses and credit cards here, people will nitpick through every expense, which requires somewhat of a thick skin. But if you can see it as helpful and weather through it, you will also get a lot of great suggestions.

You can also request that anyone who responds to your thread has to confess the luxury items they refuse to let go of no matter how ridiculous. it'll make everyone seem less preachy.

I was researching FL judgments for another poster, and ran across this thread and thought it might help:

http://creditboards.com/forums/index.php?s...orida+judgment*

Jenn - I have not plugged everything in to the spreadsheet yet. Very good idea! I will do that and see if we can get out of this in the next 24 months or so. We have cars that will be paid for by then and only one more year of private school x 2 kids (our schools here are beyond HORRIBLE). We are clipping coupons and making a real difference there! No vacation this year either!

Quick spreadsheet shows 53 months to pay off if I can pay an extra $150 per month! Don't really understand the spreadsheet though. I have to make the minimum payments and it looks like spreadsheet doesn't show that. I am thinking I will stop using them totally as step #1, it will be tough as some months we use them for necessities. We may get behind a couple of weeks here and there in order to stop using the cards and establish cash flow. I hate to ding our credit, but I think it just not an option and I really want to pay it off rather than file BK. We want to keep our house (for now) and it has significant equity so we probably wouldn't be able to file BK and keep it.

To answer that question: no.
All debt must by law be included in a bankruptcy filing. In a chapter 13 you can choose to keep the house and make your mortgage payments outside of the BK plan. (You could include delinquent payments in the BK plan though)
In a chapter 7, if your equity in the house exceeds the exemption in your state, you run a very large risk of losing the house to the BK court. They'll sell it and use the proceeds as partial repayment to creditors.
If all of your equity is exempt you can generally keep it as long as the payments are current at the time of filing and are kept current.


RE: the minimum payments- are you still at reasonable interest rates, or have the creditors rate-jacked you?

No rate jacks, all are reasonable, only a couple at 21%, the rest are 9.99 or 8.74, etc. We are not behind on anything, no cards, not the house, etc. I am trying to figure out how to make the minimums plus a little extra without missing any. We are saving a lot on groceries but that still doesn't allow me to quit using the cards totally. I guess I need a 1-2-3-4 plan of paying them down and it looks like the spreadsheets are the way to do it, although I cannot access Excel - is there another one that is preferred? I used one that was posted already but it was just a quick fill-in-blank and hard to understand the steps of payment after I had plugged in the numbers.

You can contact your creditors and negotiate a lower monthly minimum and reduce/stop the interest rates (they all have hardship programs). I would recommend figuring out a target number that you can pay each month for monthly minimums + snowball + emergency fund.

So, if you have $2600 available after your living expenses to put toward debt and emergency savings then you might target 10% for savings 10% for snowball, which leaves you $2080 for monthly minimums. Then you can go through each of your cards and based on the balance/interest rate, determine what you should try to negotiate with your creditors.

Doing so should not hurt your credit (i don't believe). You aren't closing the accounts or trying to negotiate to pay less than the full amount. As long as you renegotiate your payments and make sure that you stick to the agreement, you should be fine.

If you don't have a copy of Excel, you could download Open Office (free!) which has an equivalent program that will open XLS files.

Sounds like you're on a spare money hunt. The place to start is with a notebook and pencil, keeping track of every last penny that you spend. After doing that for about a month you can compile the numbers into two basic categories:
1) I had to spend that; and
2) I could've gotten along without spending that.

Then start adding up items in category #2 until you have enough freed up to make extra payments on a card. Pick just one to snowball BTW, make the minimums on all the others. Some people like to start with the highest interest card (saves money) others like to start with the lowest balance card (faster initial victory!) Once that card is paid off- apply that entire payment + the minimum you are making anyway to the second card. Once you get going they pay down faster and faster...


Some folk find things they can sell off to raise cash for an initial larger payment to get the ball rolling. Might be an option if you have some excess stuff you don't currently need. Heck, once your debts are paid off you'll have an awful lot of money freed up to buy replacements!


I was asking about your interest rates because you'd asked about CCCS.
As long as you aren't paying default rates (23-29%) and aren't paying late penalties, there isn't much they can do for you. They aren't going to get the interest rates under the 8.7-9.9 you are paying now- and there aren't any late fees or Overlimit fees to waive. All they'll do at this point is damage your credit.


You are still needing the cards to get from one payday to the next? How large a gap are you needing to fill?
Are you managing to pay what you charge back off again or are the balances slowly increasing?

Most of them have discontinued doing that, they just point the consumer to CCCS now. Over and over again in the BK forum we see people who attempted to get the creditors to work with them- and they were refused.
In fact I remember MBNA a few years ago actually rate-jacking consumers who called and asked for a hardship adjustment. They saw the call as an "increased risk factor". Bah. It's almost as if they don't want their money back.
I'd try it in a nothing-to-lose situation where the rates are already at 29.9%. If they are at 8 or 9% now, I wouldn't risk it. Lay low and don't give 'em a reason.

These are all great suggestions! We have not done an exact budget to know how much we could do without but I am sure there is plenty! Will look at eactly what it takes to pay mtg, eat, and keep the lights on, then will seet what is left and try to negotiate with the creditors on a lower monthly payment. There are a couple that we could ask for a lower interest rate on. I really want to try to keep our credit from being hit too hard so we could refinance the house in a year or so.

Radi8 - we do use the cards to get from one pay check to another, and this stops TODAY! They are all almost maxed anyway and we have to start somewhere! My fear is getting a week or two behind on the payments and getting the rate jacked up

You might consider delaying a creditor that doesn't play games with interest rates if it comes to that.
Phone bill? Cable? Something like that where 2-3 weeks late isn't going to do you any real damage.
A better option would be to free up some quick cash though, yard sale, etc.

A friend of mine who is a Bankruptcy court judge refers to credit cards as "financial shock absorbers", lol.
People use them to take up the slack when things are tight and pay them down a little when they have some extra cash. But they generally just bounce back and forth between the upper limit and a few inches below.
Boing boing boing. I thought it was pretty accurate, that's the reality for an awful lot of families.
It's a tough thing to break yourself free of that- and we salute you for digging in and digging out!
Let us know how we can help-

Oh- have you shopped your insurance around lately? Car? Homeowners? I just chopped $125/year off of my homeowners and roughly $900 (!) per year off of my auto insurance. And I though I had a pretty good deal before, lol. Make a couple calls!

IMO, not a good idea, as you will be rate jacked, and have to pay late fees. Rate jacking might be even with cards you are not late on (universal default).

Other ideas: Can you get a job/second job? Your DH?
This is to increase income so you have enough to live on without cards and can put the excess towards a debt snowball.

I can try to work more, but cannot get a second job, 2 kids. DH already works a lot, salary. He is hoping for a raise soon! I am thinking if we can make it through 12 more months, one car will be paid for, one less kid in private school, and hopefully we can inch down the cards.

+1000%

Protect those single-digit interest rates with your life! Quite honestly, if you are that close to your limits they are probably all that is standing between you and chaos. (One ratejack = tripled finance charge = overlimit = overlimit fees, and it snowballs from there...) And I'm sure you're aware that even ONE day late with a payment could be enough to trigger a ratejack...and should the other CCs get wind of that, you could have a REAL mess on your hands (stupid universal default or whatever it's called! )

My other tip is, when organizing your snowball, make sure the "minimum payment" is enough to actually cover the interest each month even if it doesn't put a dent in the principal. Not so much an issue with low-interest cards (to exceed a 2% minimum payment your APR would have to be in the neighborhood of 24%), but I learned this the hard way and now I've got a real mess on my hands.

The best way to do this is to download or dig out your bank and credit card statements since the first of the year (or the last3 mos) and look at what your actual spending is. Too many people look at a budget as a wish list.

Once you get an idea of where your money is actually going, versus where you think it's going..... then you can move forward.

GOOD LUCK!

We have about $3000 in monthly debt payments (mortgage, cars, credit cards, student loans), and make $100k a year. We are doing just fine. We just had to drastically cut back on things.

Good luck.

Our mtg is $5050 per month, plus another $950 in cars, plus all of the credit card payments. And, tuition!!!! One will be paid for shortly, then car pymt. drops to $650. These are ridiculous, I know. I am going to talk to my husband about getting rid of the more expensive car (it's mine). That would save on ins. too. I have a budget for June already which looks okay. It includes NOT using the cards for anything and buying tires for one car. We do not pay tuition in the summer, thank goodness! Will work on finding a spreadsheet that I can use (and read). Next big hurdle is taxes - one thing at a time!

Selling the house is in the back of my mind in the next year. We could be in great shape with a high income, no debt, good credit, and a huge downpayment on a less expensive house.

One other thought I had to earn extra income: Being paid for surveys. That is something I and my husband could do a few hours per week. Does anyone know anything about that industry? I know a lot of college kids do it.

I am with a CCCS for two accounts with BofA. My cc interest is now 4% and my signature loan is 13%. Due to a few extra payments, the signature loan will be paid by the end of the year. Fico doesn't count *managed by CCCS* against you.

These two accounts were closed and I kept my other accounts. Clear Point Financial is the organization. I pay about $15/monthly for them to handle the account.

So you did not include all of your accounts in CCCS? Can I ask why? I am just trying to think about that as an option for us on the high dollar accounts. What were your interest rates before? Did it substantially lower your monthly payment?

I am pretty sure that this statement is incorrect!!!!!!!!!! CCCS did more damage to my credit than BK.


Glad you are having good luck with this company, because with me with no missed payments (by me) my debt nearly doubled from them not making timely payments, then they would negotiate to make the accounts current (but all of the crazy fees would remain). So after 2 years of payments of over $7000 (about the original amount of my debt) I was still in debt, but the debt had grown to close to $14000, between that and a job loss, I went BK.

MAC

This may have changed, but once up on a time CCCS (at least the ones I spoke with) wouldn't take you until you were 30 or more days behind in payments.

Also, the CCCS notation itself may or may not directly affect FICO, but I'm fairly sure that closing all those high-balance-to-limit accounts will, due to the utilization factor. Keeping the accounts open, the OP's scores can only improve as the balances go down.

OP, I'm sure anyone who has given advice on this thread would be glad to help you figure out your snowball spreadsheet. You can either post your numbers (balance, minimum payment, interest rate for each card, along with how much extra $ you have to put toward the snowball) here, or if you'd rather not have it all out in public, you could PM the member of your choice for help offline. (just don't PM me, I suck at math. )

Bakerman - did you also use Clear Point Financial?

I am thinking with our situation, some extra cash/cutting back to avoid using the cards and paying them off systematically is a good choice for us right now, or selling the house which is a last resort option.

Holy crap, didn't you have some legal recourse against the CCCS?

Good luck.

For someone drowning in debt like you are, Ramsey can help. Just be ready to sell all of your material possessions and eat beans and rice for a few years. LOL.

Yes I used Clearpoint Financial. Despite what these companies tell you, your payments may not go down, mine didn't, so I struggled to make the payments and still ended up with bigger debt.

MAC

You sign papers saying that you are still responsible for everything and they are not. You still have to babysit your accounts except now you have a middleman between you and your creditors that can wreak havoc with your accounts, and when working with these companies your credit card companies really don't want to deal with you, and if you leave the program, the credit card companies just want their money and are often not willing to work with you.

MAC

We used to be big fans - wish we would have stayed the course much earlier, hindsight is always 20/20. We have his book, actually! Will get it out and read again - it may not take too long before we are on the bandwagon and selling everything! It is such a hard choice to make, especially with kids involved.

I did CCCS in the late 90s. I was not late at all at the time on a single payment.

What's the situation with your car? Upside down? Can you refinance it or sell it? $650 is a lot for a car payment, so I'm assuming it's a luxury or near luxury vehicle. While I'd never suggest someone not mechanically inclined get a questionable car, you can definitely find a reliable car for a lot less than that. Even lowering the payments might help, but it kinda depends on what you have, what you owe, what you can sell for, and the interest rates.

You might also check out places like miserlymoms.com or the Tightwad Gazette for some ideas on other places to cut expenses. Some are just wacky, but a lot are pretty painless and add up over time.

Yes, luxury vehicle, not upside down, could sell, but will be paid for in a couple of years, still debating. Our teenager drives it more than I do, safety is a big concern. I have been reading all morning and found some very helpful information. Thanks to you all!

Hi OP:

After reading the boards, do you still think that bk or cccs are the best options? I know the debt numbers are large, but it actually doesn't seem like things are really that dire. You aren't upside down on anything, no late payments, etc.

It sounds like you could probably come up with the cash just by tightening up things.

Also, are you teenagers aware of the debt? Are they pitching in with summer jobs etc?

No, I do not think CCCS or BK is the best option now! I think we can tighten up and rake in a few extra dollars and get out of this! We can always sell our house, we have tons of equity.

Kids are aware that we are on a "spending freeze"! We do not want to burden them with the details, but they are great kids and do whatever we ask of them. One will be gone the majority of the summer on a scholarship to an educational program. The other doesn't care about buying anything. We are very fortunate!

Our situation feels dire when I must use the cards to get from month to month, but I really believe we can remedy that. My next biggest hurdles are taxes (due in October), tuition in the fall, etc.

I am going to call and ask for lower cable/internet rates (have to have for my job and we only have basic cable), shop the car/homeowners ins., consider selling my car, and clip those coupons! Our hime is energy efficient and we have all energy star appliances and have already begun switching all bulbs to CFs. Watering the yard will be greatly slowed this year. And, I am going to check in to the online surveys, etc, that you can make a few extra bucks on. One month without using the credit cards is huge considering we have so many and the minimum payments are so high.

a couple other suggestions:

Do you belong to a credit union? If not, you might consider joining. With some of the goals you have, it might come in handy 6-12 months from now. There are a lot of great posts in the main credit forum that will point you toward CUs that are generous with consolidation loans etc.


Also, I sent you a PM for Focus Forward and got your reply. I thought I would post my response here regarding surveys, so anyone else interested can see it too:


I have had really good luck with this company. They seem to have higher paying focus groups, which is great. I have had one that was $150 and one that was $250 (which involved going shopping at a store), but at least their compensation is usually really fair for the amount of time required.

This is the only company i have done surveys through, so i am not an expert, but my impression (with this company and others) is that the vast majority of pay-for-survey work is $1-2/per survey, and that the 'power survey' takers can make up to $200-300/month.

Even with focus forward, the higher paying surveys are very random, and you have to meet their pre-screening requirements before you get paid. You wouldn't be able to count on 2 per month i don't think, unless you found several (many) companies that all had similar opportunities. You should look up research firms in your area that conduct focus groups and sign up for their panels. Anything that involves live participation (ie - you go down to their offices) will pay well.

Here is a directory of other part-time work-at-home stuff:
http://workathomedesk.com/work-at-home-directory.htm

They also have a leads section:
http://workathomedesk.com/work-at-home-leads.htm

Where they pull from a lot of sources. Some of those are full time, but if you keep your eye out, you will find temporary gigs doing online research, posting comments on blogs etc.

My overall impression of most part-time/flex-time work-at-home stuff is that it really doesn't pay well when you break down what you are getting paid by the hour, but many are a good way to bring in an extra $500 or so per month. I think it would be very hard to make much more than that with most of them.

If you have strong writing abilities, the possibilities open up quite a bit. One of the better gigs is writing for about.com. You get paid based on the traffic to your pages, but they guarantee $750/month. The time required is extremely flexible and not huge..just requires consistency and quality.

Here is a list of open topics they are currently recruiting for:
http://beaguide.about.com/applynow.htm

There are also a ton of blogging opportunities which generally pay $5-10/per post. Just find a topic you like, apply, and start blogging


Hope those help!

These are all great suggestions - thank you! We do not belong to a CU but will check that out for future reference. I already work at home and do extremely well, I am looking for something at home that my husband could do as well. Will check out the links above and the survey company. I am feeling better about all of this already!

You seem to have what it takes to get this done. Congrats on that. Keep motivated! After this is all said and done, you will appreciate being free from the ties of unnecessary debt. Imagine having a high income and being able to put away like 30% of it every month just by living a less flashy life.

Good luck

MAC

I am over the flashy life. No one really cares. We do love our house, but my sanity is worth much more and we will sell it if it comes to that. Right now I think we can dig out slowly but surely! Good news, cable company agreed to take $32.03 off the monthly bill for a year! As far as ins. goes, I think we have great rates by my comparisons thus far! Next call will be to the alarm company and ask if using digital phone service will still work, it is half the cost. And, I looked at our cell phone bill, we are only using half of the plan we have because most of who we have to communicate with has the same provider so those calls are free!

Do you think you can do as Jenn suggested and download all of your expenses for the last few months? That is the best way to get a really good idea of where your $$ are going and where you can make additional cuts.

It can be really overwhelming too though. If you can't do it, then at least figure out your fixed necessities every month (including cc minimums) It looks like you are already doing a good job of going through the fixed costs and cutting where you can.

Draw a hard line between the fixed necessities and the rest. If needed, open a separate bill paying account that automates all of those things.

Then take whatever you have left over each month, and figure out the categories of spending you need: maybe each kid gets a part, household expenses, emergency slush fund (which actually you can use as a fund for the things you would have grabbed a cc for in the past), taxes for Oct etc.

Then do what ever you can to make it a 100% cash proposition...give everyone envelopes or pre-paid debit cards etc...

Doing this will give you a really quick pulse on whether it is your fixed expenses or discretionary expenses that are pushing you to charge. If you can't take the left over amount after fixed costs and come up with something that will work...time to look back at the fixed costs for more cuts.

One more thing...since you pay tuition during the year...can you snowball that amount during the summer? By keeping the $$ in your fixed monthly costs, it will prevent sticker shock in the fall when it comes back in..and in the meantime..you can get the snowball rolling

We decided last night to go to strictly cash. On paper we stil barely have enough to cover CC minimums, etc. On paper it appears we do not have enough for taxes (used cc last year) or tuition. I have a plan for tuition though, will try to save some this summer, then when the kids go back my husband and I both have extra checks that month which will cover half of the tuition bill, then he is due to get a bonus the first of the year which should cover the rest. I realize this is risky, but it is the last year to pay for 2 kids and will be easier. I think that by not using the cards, the minimum payments will begin to lower because no new charges are accruing. One card that we have had a minimum of $480 2 months ago, we didn't use that particular card and the minimum this month was $417. I still need to figure out with a spreadsheet what to pay extra on first. Instinct says highest interest rates, but on the other hand, paying down a higher balance will help lower a minimum payment. We have a credit line for $500 that has 21% interest, and at least one other card with a higher rate. I will be calling them shortly to see if they will lower it, but I am not sure how to get them to do it because I cannot threaten a balance transfer to another card.

My DD goes to private school....

While you probably make too much for scholarships, is there a way to work off tuition at your school? I know some of the kids in ours work after school or helpign with landscaping, etc to pay it off.

I realize that is putting some of the burden on your kids, but it might be a valuable lesson as well.

Mine is in Kindergarten and frankly, I think she's old enough to be painting bleachers or something jk!!

A little 'no debting' pledge...it is surprisingly difficult, especially when you start realizing how frequently you order services without paying upfront.

It is from the book:
How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis
http://www.amazon.com/How-Debt-Stay-Live-P...y/dp/0553283960

Here is a simple action you can take to complete your foundation work:

JUST FOR TODAY, ONE DAY, DO NOT INCUR ANY NEW DEBT.

Not one.

# Don't borrow $2 from a friend.
# Don't accept a service you plan to pay for later.
# Don't take a loan from a bank.
# Don't charge anything on your credit card.

This is easy. Anyone can do it. Just go through today, this one small twenty-four hour period, without taking on any new debt in any form. No matter when you're reading this, just do not incur any new debt today. If something is absolutely essential − which is rarely the case − find another, nondebting way to get it. Or defer it for twenty-four hours.

I disagree with the line in bold. How is using the credit card adding to your debt?

I love this - will copy and e-mail to my husband!

And, as far as working off tuition, we don't have that available. And yes, we make too much to qualify for tuition assistance. But, it absolutely worth every penny will pay! Our oldest will go to an Ivy league college with MUCH scholarship money! Kids in public schools here do well to get into community college, it is really that bad.

If you do a search on my previous posts you will find info on paid surveys. I belong to tons and you might want to get into mystery shopping which is also in my old posts. You could make extra money which can go to your debt and also get free gas, free supplies, etc.