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Debts out of control... Can we come back or too late???


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11 replies to this topic

#1 indeepandneedhelp

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Posted 09 August 2017 - 10:05 PM

My husband and I are trying to figure out what our best move is right now.  

 

Basically, we realized our debts slowly overcame our monthly income to where we began paying money out of our savings to cover.  Using these forums, we created a budget, a tight budget, but we were alright.  

 

But over time, we ended back up in a bad situation.  Due to emergencies both in the home and vehicle, we ended up again in the red each month.  We are trying to figure out what our best means from this point are.  We would really appreciate your input to help us figure out what we need to do.  

 

My husbands median credit score is 710 (myFico) and mine is 620.  Mine is because I thought I paid a Kohl's charge when in fact the interest accrued and it went 30-days over.  Just about all cards and loans are in his name and I'm an authorized user on some.  I have three cards in my name, one of which has a balance.  Otherwise, we both have the mortgage.

 

We've tried for balance transfer cards and consolidation loans, only to be denied due to increasing debt and DTI.

 

We have four cards with zero balances, each with $5k limits and can do balance transfers.  Their rate is 2x12.9%, 14.9% and 16.9%.

 

Our debts are as follows (most credit card rates are +20%):

 

Creditor Min Payment Balance Amex 35 3235.54 Barclay 159 5200.81 Paypal 68 2094.21 Citibank 25 1299.05 BBRZMC 39 3060.05 Amazon 167 5853.77 Capital 1 262 11844.82 Venture 193 6598.79 Capital 1 217 8281.45 Capital 1 147 4939.68 Penfed Visa 84 4208 Penfed Loan 636.17 18650 Lending Club 421.24 11250 Alliant Loan 275.88 5565 Student Loan 421.64 60k+ Internet 36.69   netflix 12.83   Car Insurance 101   Cell Phones 112   Water/Sewage 85   Electric 250   Mortgage 1414        

 

We are planning on getting rid of Netflix and changing phone providers to save money.  However, even after doing that we are still -$142 per month after paying the minimums and utilities.

 

We do have $10k in our savings which we are willing to put to whatever we can to get back in the black, and we are willing to each get a side job for extra income.

 

We don't know what our options are.  We have other cards that have zero balances, and are current on all of our bills.  We just want to get ourselves to a point where we are back in the black each month and have money left over to pay for groceries, gas a bit extra to work on a snowball for our credit cards.  

 

We were contacted by Fr33dom D3bt R3lief, but after hearing their pitch, don't like how settlements rely on us defaulting and hoping that the creditors accept the settlement offers or face litigation.

 

We don't want to even consider Bankruptcy, especially since we have been out our house only a little over 2 years.  But then again, who ever really wants to declare bankruptcy?!

 

Ideally, we want to work this out on our own.  But with pets, groceries, gas, and draining our savings to bring down our payments, we aren't sure what to do.

 

We need someone who isn't emotionally stressed out by our situation to provide us some logic, please?

 

Thank you and I'm glad to finally be posting on this forum.  Although, I wish it wasn't because of this situation!





#2 breeze

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Posted 09 August 2017 - 11:03 PM

Read a little bit in this forum, if you haven't already, and see if "credit counseling," usually referred to as a DMP (debt management program) would work for you. It is one option available if you are able to qualify. I usually mention Greenpath, because I know people who have used them. There are a couple of others mentioned in posts in here. You could call and see if you qualify. 

 

There's also the option of finding extra income, using your $10,000 to get your balances down to where you could qualify for some of the good balance transfers. The members here are good at helping to structure a plan to dig out that way. You could wait for them to post here, or put that question up in the main credit forum, and ask for help making a plan to dig out this way.

 

The other option of course would be bk, but it sounds like you aren't really in that position at this point, since you do have some resources and your income.

 

Welcome to CB, by the way. :)

 

The formatting errors in your original post are common here. If you can figure out how to do it, put it in another post for folks to read more easily. You can also make up spreadsheets, turn them into graphics and then post them here. You've probably see some.



#3 Kat58

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Posted 09 August 2017 - 11:57 PM

Creditor-Min Payment-Balance-Credit Limit

 

Amex               35       3235.54          ?
Barclay          159       5200.81          ?
Paypal             68       2094.21          ?
Citibank           25       1299.05          ?
BBRZMC         39       3060.05          ?
Amazon         167       5853.77          ?
Capital 1        262    11,844.82          ?
Venture          193       6598.79          ?
Capital 1        217       8281.45          ?
Capital 1        147       4939.68          ?
Penfed Visa     84       4208.00          ?
 
Penfed Loan   636.17   18,650
Lending Club  421.24   11,250
Alliant Loan     275.88    5,565
 
Student Loan  421.64    60k+
 

Internet             36.69

Netflix               12.83

Car Ins            101.00

Cell Phones    112.00

Water/Sewer    85.00

Electric           250.00

Mortgage      1414.00

 

OP - Please add Credit Lines to above CC's.



#4 indeepandneedhelp

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Posted 10 August 2017 - 02:16 PM

Read a little bit in this forum, if you haven't already, and see if "credit counseling," usually referred to as a DMP (debt management program) would work for you. It is one option available if you are able to qualify. I usually mention Greenpath, because I know people who have used them. There are a couple of others mentioned in posts in here. You could call and see if you qualify. 

 

There's also the option of finding extra income, using your $10,000 to get your balances down to where you could qualify for some of the good balance transfers. The members here are good at helping to structure a plan to dig out that way. You could wait for them to post here, or put that question up in the main credit forum, and ask for help making a plan to dig out this way.

 

The other option of course would be bk, but it sounds like you aren't really in that position at this point, since you do have some resources and your income.

 

Welcome to CB, by the way. :)

 

The formatting errors in your original post are common here. If you can figure out how to do it, put it in another post for folks to read more easily. You can also make up spreadsheets, turn them into graphics and then post them here. You've probably see some.

 

Sorry for the delay in response and thank you for your input!

 

I'll try to figure out how to properly list items in here as now I can see how confusing that looks.  In the meanwhile, it appears that Kat58 beat me to it!

 

I'll pass the credit counseling to my husband and we can discuss.  I believe we may get free credit counseling through our jobs, but we'll have to check through our HR departments.



#5 indeepandneedhelp

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Posted 10 August 2017 - 02:22 PM

Creditor-Min Payment-Balance-Credit Limit

 

Amex               35       3235.54          6000
Barclay          159       5200.81          5500
Paypal             68       2094.21          4000
Citibank           25       1299.05          1700
BBRZMC         39       3060.05          5600
Amazon         167       5853.77          6000
Capital 1        262    11,844.82          14500
Venture          193       6598.79          8000
Capital 1        217       8281.45          10000
Capital 1        147       4939.68          5000
Penfed Visa     84       4208.00          9000
 
Penfed Loan   636.17   18,650
Lending Club  421.24   11,250
Alliant Loan     275.88    5,565
 
Student Loan  421.64    60k+
 

Internet             36.69

Netflix               12.83

Car Ins            101.00

Cell Phones    112.00

Water/Sewer    85.00

Electric           250.00

Mortgage      1414.00

 

OP - Please add Credit Lines to above CC's.

 

Thanks Kat58 for posting our current debts in a comprehensive manner.  Didn't mean for that to come out all jumbled out like that.

 

I've updated your list with the limits.  



#6 Kat58

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Posted 10 August 2017 - 07:15 PM

 

Creditor-Min Payment-Balance-Credit Limit

 

Amex               35       3235.54          6000
Barclay          159       5200.81          5500
Paypal             68       2094.21          4000
Citibank           25       1299.05          1700
BBRZMC         39       3060.05          5600
Amazon         167       5853.77          6000
Capital 1        262    11,844.82          14500
Venture          193       6598.79          8000
Capital 1        217       8281.45          10000
Capital 1        147       4939.68          5000
Penfed Visa     84       4208.00          9000
 
Penfed Loan   636.17   18,650
Lending Club  421.24   11,250
Alliant Loan     275.88    5,565
 
Student Loan  421.64    60k+
 

Internet             36.69

Netflix               12.83

Car Ins            101.00

Cell Phones    112.00

Water/Sewer    85.00

Electric           250.00

Mortgage      1414.00

 

OP - Please add Credit Lines to above CC's.

 

Thanks Kat58 for posting our current debts in a comprehensive manner.  Didn't mean for that to come out all jumbled out like that.

 

I've updated your list with the limits.  

 

I've been staring at this list trying to decide the best approach for your situation. Normally, I would suggest getting all CC's to report 49% max. (anything above will substantially lower your score) in hopes for a good BT offer, but I see WAY too many accounts with a balance. What are the terms of that Alliant loan? If you paid that off now, it would free up $275 a month. I'm not saying to do that... just asking.

 

I'm still thinking and hopefully someone else will chime in.



#7 breeze

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Posted 10 August 2017 - 09:01 PM

How about the interest rates? In this case, I like Kat's idea of freeing up the $250 a month, then apply that $250 to the highest interest card. Once it's paid off, start in the next highest. 

 

After you get some of these down, and get the highest interest cards paid down, you could strategize how to raise your scores, maybe be able to get a 0% balance transfer. 

 

Needless to say, you've got to stop using the cards for a while. If you use them to pay bills, include the amounts in your payments. I know I use cards to pay utilities etc for convenience.



#8 DollarDog

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Posted 11 August 2017 - 01:56 PM

$86,000 in credit card and unsecured loan debt is a lot.  Whatever the emergencies were must have been massive and life-altering.

 

If your budget is tight and you can't make much more than minimum payments, it will be many years before you're in the black.  People here can help you shuffle the balances from one card to another to save some money on interest, but it's unlikely you'll get an $86,000 line of credit at 8%.

 

Cancelling a ~$13 a month Netflix subscription may sound nice, but really has no impact on that amount of debt.  Being bored at home usually leads to going out and spending money, so the Netflix subscription might be a good thing.



#9 indeepandneedhelp

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Posted 11 August 2017 - 06:51 PM

Sorry for not responding again all.  We both greatly appreciate your input and thoughts, we've just been busy with getting our budget in order, looking for side jobs, and thinking of other ways to get cash together.

 

I'll respond to your posts in order.

 

Kat:

Honestly we were thinking the same thing.  Pay off two or three debts (no matter the type) to give us the most money back towards our budget.  The Alliant loan was first on our list.  We wanted to get more input to see if that was the right way to go.  Consider that one good, and we'll keep 1k of our current savings in savings in case something happens and we need the cash.  All other cash is going towards the debts.

 

Breeze:

We were thinking of using the lowest amount snowball effect, and not the highest APR route.  Unless you all think the highest APR is wiser, we felt that seeing the debts being paid off will help motivate us.  Honestly, most (if not all) of the APR's are about 22-24%.

 

Dollardog:

New house renovation with hidden issues pumped up a personal loan into cards.  A family member taking advantage of us, car problems mixed with furnishing our first home and other selfish purchases.  We aren't going to say we aren't part of the problem.  But now we are getting a list of items (TV's, Blurays, Appliances, Tools, Xbox, etc) that we are going to sell on craigslist as well as have a garage sale for clothes and jewelry we no longer want or need.  We do not have cable, only internet and we live on Netflix.  We agree with you that getting rid of that will only make this painful experience more dreadful because we will need a way to unwind after we get additional jobs.  

 

To be truthful, we don't need another line of credit.  Maybe if a consolidation loan can be found with a decent interest rate.  But we are honestly sick and tired of debt and want to crush it out.  My husband works full time and his job is paying for him to get another degree.  He's currently looking for a weekend job to pull in extra cash.  I'm looking for another side job or two to help.  We feel that with selling the wants in our home we don't need, getting additional side jobs and putting 90% of our savings into our debts, we can put ourselves into a better place for a snowball attempt.

 

Again, sorry for not responding sooner.  We look forward to hearing your input on this response and any other ideas you may have.

 

I forgot to mention my husband is going to call all the credit card companies to see about reducing our APR and any other repayment terms we can work out.  Not sure if this is a waste of time or not, but he's going to try.


Edited by indeepandneedhelp, 11 August 2017 - 06:52 PM.


#10 Kat58

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Posted 11 August 2017 - 07:27 PM

Sorry for not responding again all.  We both greatly appreciate your input and thoughts, we've just been busy with getting our budget in order, looking for side jobs, and thinking of other ways to get cash together.

 

I'll respond to your posts in order.

 

Kat:

Honestly we were thinking the same thing.  Pay off two or three debts (no matter the type) to give us the most money back towards our budget.  The Alliant loan was first on our list.  We wanted to get more input to see if that was the right way to go.  Consider that one good, and we'll keep 1k of our current savings in savings in case something happens and we need the cash.  All other cash is going towards the debts.

 

Breeze:

We were thinking of using the lowest amount snowball effect, and not the highest APR route.  Unless you all think the highest APR is wiser, we felt that seeing the debts being paid off will help motivate us.  Honestly, most (if not all) of the APR's are about 22-24%.

 

I forgot to mention my husband is going to call all the credit card companies to see about reducing our APR and any other repayment terms we can work out.  Not sure if this is a waste of time or not, but he's going to try.

 

I think the 'lowest amount snowball effect' will work well for you, along with paying off the Alliant loan. Definitely keep the Netflix  :) I'm not sure if calling your creditors is a good idea. Wait for others to chime in on this.

 

And... there's no need to apologize for not responding sooner.

 

Sounds like you have a good plan!



#11 DollarDog

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Posted 11 August 2017 - 07:32 PM

I can spot a bot faster than Kat.



#12 indeepandneedhelp

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Posted 14 August 2017 - 10:34 AM

DollarDog, a bot?

 

Kat,

I wasn't sure if checking to see about getting an APR reduction was ok or not.  I thought I read instances where other members here did that but not positive.  

 

ETA:  and thanks for the support.  I'm picking up extra shifts and my husband just got a weekend job delivering and cooking pizzas.  So that bit of extra income will help.  


Edited by indeepandneedhelp, 14 August 2017 - 10:38 AM.





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