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Credit Card Debt Repayment Strategy Help!

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Hello, I had some poor second line of income strategies and then was unemployed for 2 years so racked up a significant amount of credit card debt from 2016. Due to the pandemic, the issuers have closed the cards so I'm just focused on paying them off. Luckily I have a fair amount of income coming in now from my new consulting work so am just trying to address this in the most strategic way. Since interest has been accruing for 4 years a good portion of the debt is merely accrued interest. Given that the cards are closed I'm unsure of the best strategy (if I should try to get a settlement offer, work with a consolidation firm or just pay what's owed). I am a travel hacker so would like to be able to open miles and points cards again in the future but am prioritizing becoming debt free. I have roughly 35k in an IRA, currently 10k available to pay towards cards and will have 10k/month available to pay off through November (so 40k in total) at which point my consulting contracts end and my income stream is TBD. My credit is currently at 612 because of my high utilization. I am completely lost as to the best strategy and a friend directed me to this forum so would greatly appreciate any/all advice. All my current debts are below, I have no other debt besides my student loans which are all public.

 

Issuer Card Balance Limit APR Open/Closed
Amex SPG $ 10,381.97 $ 6,900.00 18.99% Closed
Amex Platinum $ 20,269.28 N/A 18.24% Closed
Amex Blue $ 1,469.59 $ 1,700.00 29.24% Closed
Amex SPG Biz $ 1,521.80 $ 1,800.00 27.24% Closed
Chase Marriott $ 5,849.21 $ 6,000.00 15.24% Closed
Chase Sapphire Preferred $ 956.19 $ 1,000.00 15.99% Closed
Chase Sapphire Reserve $ 10,036.69 $ 12,000.00 22.99% Closed
Chase United Club $ 3,362.91 $ 5,000.00 15.24% Closed
Chase United Explorer Paid Off $ 1,000.00 15.99% Closed
Alliant N/A Paid Off $ 3,000.00 11.24% Open
Target RedCard $ 1,321.89 $ 5,000.00 22.90% Open
Discover It Paid Off $ 500.00 22.99% Open

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welcome to CB!

 

please don't touch your IRA, especially if it is not a ROTH and you are under 59.5 years of age. and does the 10k per month consulting account for your tax liabilities?

 

have you considered filing BK? It sounds like you have been in a systemically bad financial position for years and BK is designed for just such situations.

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The extra 10k is on top of my expenses and tax liabilities. I likely should have filed for bk when I was previously unemployed but should have enough now to pay off 80% or more of my outstanding debt. The only thing I'm considering is if I should try to get a settlement offer from Chase.

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Are the accounts listed above closed and charged off, or closed and current?

On 10/9/2020 at 4:11 PM, ilanaks said:

work with a consolidation firm

Tread very carefully.  Don't send money to a third party who tells you to default on everything so they can settle with your "payment money" later, after everything charges off.

 

Edited by cv91915

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Thanks for the clarification.  The reason I asked is because of the discussion in this recent thread, where the OP had success converting revolving balances to low interest loans, and reducing the interest rates significantly.

 

The obvious difference here is that these cards were closed at the consumer's request, but it may still be worth a try.  You might ask some questions of this poster for additional details/insight.

 

 

Edited by cv91915

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