I need help getting out of huge debt. Advice needed...

[Jugernot]

Well personally, I think not getting a credit card is foolish... well this is... unless you can't control your own spending. My girlfriend ruined her credit early in her life and has now done some self imposed limits on her cards. Each card has only $200 credit... no more. She has 3 cards, each get maxed out each month and each month she pays them off. That way you can never accumulate a lot of debt.

I have 3 cards, that total over $30k combined and I have a balance of $0 at the end of each month. I put EVERYTHING on my credit cards. It's a cycle.... you must pay for what you buy. No one else is going to do it for you.

As for shurato's situation, do you have a roomate to share rent? Are you near relatives? If Yes, will they let you stay with them for a little while? If not, try to find a cheaper place to live... If you don't live too far from your work, ride a bike rather than driving your car. Don't eat out.... EVER (maybe once a month max) unless someone else is paying.

I do know what you are going through! For two years I had a balance of $4k on my credit cards... I was spending out of my means. Now I've got a handle on it and only spend for what I need and nothing else.

It'll work out!

 

[jaeger66]

Originally posted by: dxkj

does this actually work and

1) Will it be counted against you in the future?
2) Dont some people abuse this? IE is there a record kept?

It most certainly works. Some companies will place a note on your credit report saying that the debt was settled for less than the full balance. This isn't really negative, and is far better than a note saying they turned you over to a collection agency. But you should of course request that the CC company send you a written confirmation of this arrangement. I don't know if it's abused or not, but people in this situation genreally aren't prime candidates for any more high balance cards.

 

[CallTheFBI]

Originally posted by: Carbonyl

Originally posted by: CallTheFBI

Originally posted by: Carbonyl

Originally posted by: CallTheFBI
It's stories like yours that make me never ever want to get a credit card. I'm going to stick with my checking account until I get a rock solid career and I am OUT of college completely. I won't even get a credit card with tiny limit. It starts small and then it gets huge, that's how it works. Credit cards are the devil.

Smart. I encouage you to read Art of Money Getting by P.T. Barnum, a timeless, short, simple, classic which is tried and true.

Looks like good sound advice except for the part about being charitable. Charity is not in my vocabulary.

Of course men should be charitable, because it is a duty and a pleasure. But even as a matter of policy, if you possess no higher incentive, you will find that the liberal man will command patronage, while the sordid, uncharitable miser will be avoided.

I'm sorry to say this but things just work better when people get only what they earn. It's just how the world works, and it is futile to try to go against that truth.

 

[jaeger66]

Originally posted by: CallTheFBI


Uh yeah, your credit rating goes down the crapper. Every record is kept by credit report agencies that people can tap into. If you go to apply for a job they might look at your credit report and weigh that into your other stuff. No matter what people tell you when it comes to applying for a job, no credit is better than bad credit.

When I applied for a job as a dispatcher at my local sheriff's department the background investigator looked at my credit report and said it was good that I didn't have anything on it.

What are you talking about? Settling your debts is a good thing. Taking positive action over your finances is a good thing. Shying away from credit because you don't trust yourself is a bad thing, as is simply taking the phone off the hook when things get out of hand. And when the time comes to buy a house or a car, you will find that no credit is basically as bad as bad credit.

 

[CallTheFBI]

Originally posted by: jaeger66

Originally posted by: CallTheFBI


Uh yeah, your credit rating goes down the crapper. Every record is kept by credit report agencies that people can tap into. If you go to apply for a job they might look at your credit report and weigh that into your other stuff. No matter what people tell you when it comes to applying for a job, no credit is better than bad credit.

When I applied for a job as a dispatcher at my local sheriff's department the background investigator looked at my credit report and said it was good that I didn't have anything on it.

What are you talking about? Settling your debts is a good thing. Taking positive action over your finances is a good thing. Shying away from credit because you don't trust yourself is a bad thing, as is simply taking the phone off the hook when things get out of hand. And when the time comes to buy a house or a car, you will find that no credit is basically as bad as bad credit.

I never buy a new car. Always pay cash for a used car. And when I mean cash I mean benjamins in stacks on the table, no checks. I have only written one check in my life. And as for settling your debts, yes that is a good thing. But what I was trying to say is that if he doesn't pay off the full amount he is in dream land if he thinks his credit rating still won't be affected. Of course it is better to pay off some than not at all.

 

[shurato]

To answer Jugernot, yes I live on my own and no I cannot move back in with my parents or relatives or friends. I've supported myself financially and have been independant since I went to college. Through various jobs, financial aids, loans, I put myself through school only to be stuck in this terrible situation. My credit is already pretty much ruined and I can only hope for it clear up down the road once I can get myself out of debt. My parents never made much money and have a hard time themselves so I can't turn to them for help. It just really hurts to know that I'm in such a situation as this when I know my parents went through such hard times and they wanted the best for me. I don't really blame anyone but myself for this...well i take that back...the credit card companies are evil and I was their perfect mark that got suckered.

Can someone explain chapter 7 bankruptcy to me? Like is this a viable alternative to debt consolidation? I will seriously have to consider this if debt consolidation cannot help me. Also to the person who suggested trying to work something out with the credit card company...they've already canceled my credit card account, do you think i could broker a deal with them, essentially do the same thing a debt consolidation company will do? I tried calling one of my CC companies today and the dept i needed to speak with was closed. I'm about 2-3 months behind on all my credit card payments and am over the limit on all of them. CC companies are calling and leaving me messages every day pretty much... not debt collectors "yet" harassing me.

I appreciate all the advice from you all...both serious and not serious (makes for a good laff to lighten the terrible mood).

 

[ShallowHal]

GO HERE. YOU HAVE NOTHING TO LOSE!!!

This is the various explanations for bankruptcy:14.

CHAPTER 7

The chapter of the Bankruptcy Code providing for ?liquidation,? i.e., the sale of a debtor?s nonexempt property and the distribution of the proceeds to creditors.

CHAPTER 7 TRUSTEE

A person appointed in a chapter 7 case to represent the interests of the bankruptcy estate and the unsecured creditors. (The trustee?s responsibilities include reviewing the debtor?s petition and schedules, liquidating the property of the estate, and making distributions to creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.)

CHAPTER 11

A reorganization bankruptcy, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

CHAPTER 12

The chapter of the Bankruptcy Code providing for adjustment of debts of a ?family farmer,? as that term is defined in the Bankruptcy Code.

CHAPTER 13

The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)

CHAPTER 13 TRUSTEE

A person appointed to administer a chapter 13 case. (A chapter 13 trustee?s responsibilities are similar to those of a chapter 7 trustee; however, a chapter 13 trustee has the additional responsibilities of overseeing the debtor?s plan, receiving payments from debtors, and disbursing plan payments to creditors.)



Your credit rating will be terrible for ten years after going bankrupt. I suggest the debt counseling. I know from experience that it works. It took me five years to pay off my various credit cards but I had excellent credit when I was done. I won't say it was easy. But climbing out of the hole you dug yourself is never easy. Try ANYTHING before bankruptcy.

 

[heartsurgeon]

you are dangerous to yourself..

number 1) DESTROY ALL CREDIT CARDS..you are a fool to have done what you did with them.
number 2) nobody is going to help you out of your situation for free.. ? "non-profit" debt consolidators..not likely
number 3) you need a lawyer (which means you need money to pay them.. again,)
number 4) don't sign anything without your lawyers approval..
number 5) work hard..cut down on your lifestyle..move in with your parents if you can..pay off your debts..get back to school..you've learned a hard lession that will serve you well later in life..

don't live beyond your means, insteading of spending "future" income now, save money for the future in case a unexpected catastrophe arises....

 

[StageLeft]

Originally posted by: Fritoz
Time for some tough love...

A reputable debt counselor may help, but you need to get to the root of the problem: Cash flow. Do you have free nights or weekends? Then get a second job. Get a third job, if necessary. It's the answer many young people don't want to hear these days, they're too busy going out with friends, buying DVDs and surfing the web. Stop eating out, buy your clothes at garage sales, eat ramen noodles, buy the generic brand of food at the supermarket, cancel the cable TV, and yes, cancel that precious internet account and use a free account to check email (since you'll be too busy working to need more than a few free hours anyway.) It's time to give up the luxuries and start living that "starving college student" life you easily avoided by financing your way through it.

I'm sorry if this sounds harsh. But you can "sack up" and pay the debt that you owe, or you can roll over and take the easy way out. I can guarantee you one thing: If you pull yourself up and pay off that debt, much like Private Pyle in Full Metal Jacket you will be "Born Again Hard" in the financial arena! Then you can hold your head high, and offer up some "been there-done that" advice of your own when you come across people in similar situations. Now good luck, and go get 'em!

Darn good post and dead on.

 

[shurato]

Originally posted by: heartsurgeon
you are dangerous to yourself..

number 1) DESTROY ALL CREDIT CARDS..you are a fool to have done what you did with them.
number 2) nobody is going to help you out of your situation for free.. ? "non-profit" debt consolidators..not likely
number 3) you need a lawyer (which means you need money to pay them.. again,)
number 4) don't sign anything without your lawyers approval..
number 5) work hard..cut down on your lifestyle..move in with your parents if you can..pay off your debts..get back to school..you've learned a hard lession that will serve you well later in life..

don't live beyond your means, insteading of spending "future" income now, save money for the future in case a unexpected catastrophe arises....

Yep i'm a fool...no denying that...however...what do i need a lawyer for again?

 

[heartsurgeon]

what do i need a lawyer for again?

rather than making decisions based on what you read in ATOT..you should get an lawyer that specialises in situations like yours to help you figure out what to do, and how to do it.
you need professional help to resolve a $20,000 debt..

 

[tm37]

My sister did credit counseling and it took about 4 years to get everything paid off. THey lowered her rates down to about 4% overall and I thought it was well worth the money it cost her (about 15 a month) She mailed one check to the Credit counseler and they sent checks to the card companies.

I also have alot of CC debt and Am in the process of refinancing the house. I am going to cut my CC debt in half and lower my payment by 50 bucks a month:Q This will really lower my debt/imcome ratio and should allow me to get a 0% transfer card to throw the rest on (about 8K).

What stinks is that while you are on CC you will not beable to to get anyother credit ontil you are done and the cards you have will really not be usable. I would suggest you o it though as you do payoff everything. Bankrupcy is an option but I don't recommend it. The fact is you ran this debt up and SHould pay it off. BK sounds nice and easy but alot of times it can be messy.

 

[LaLaLand]

File bankruptcy and start over.

DO NOT USE THOSE DEBT CONSOLIDATERS they look worse on your credit history than if you actually file bankruptcy!

 

[tm37]

Originally posted by: LaLaLand
File bankruptcy and start over.

DO NOT USE THOSE DEBT CONSOLIDATERS they look worse on your credit history than if you actually file bankruptcy!

WHile I am sure you may have heard this it is in fact false. I good Credit couseler will have the acocunt shown as an AGREEMENT PM instead of Disolved. I am a firm beleiver in doing the right thing and poor finacail planning is a bad reason to declare bankrupcy. I could easliy could have filed for chapter 7 before I moved. It tells creditors that I do not follow through with my obligation. Where as Credit counseling makes it some what right.

True that bankrupcy is a quicker solution and requires you to pay back nothing. And I will also give you that BK will allow you to begin the rebuiling process immeadiatly after processing the disgarge of bankrupcy. Chapter 7 really isn't all that the law office that advertise on TV make it out to be. My sister will be done in a few months and while her credit is by no means sterling it is bettre than if she had declared BK a few years back. They are looking at buying a house as soon as this is payed off. Her credit is not repaired but payed. There is a human element you do deal with and paying something off due to an agreement is far better than dissolving your assests and liabilities.

Just for thought have you ever gone through a BK? Or Credit counseling? Helped someone do either?

 

[LaLaLand]

How much would a bankruptcy cost if he filed for bankruptcy??



He said he pays the minimum, the debts going nowhere he's just getting eaten alive.

 

[ShallowHal]

Originally posted by: LaLaLand
File bankruptcy and start over.

DO NOT USE THOSE DEBT CONSOLIDATERS they look worse on your credit history than if you actually file bankruptcy!

This is absolutely false. Not a shred of truth in that statement. I know from experience.

 

[Rookie]

I use CCOA and haven't had any problems yet... 25K debt