I have been reading your posts and would like to give my scenerio. Put simply, changed jobs about 7 years ago………income was cut in half for the first year at the new job………used credit cards to supplement the missed income that year…….have been able to pay the minimum required for the next 5 1/2 years, but have not been able to make any payments for the last 6 months.
There are about 8 credit cards with a beginning balance of $63,000.00. Now with all the fees that balance is closer to $$68,000.00. 2 accounts with BoA, 2 accounts with Discover, Wells Fargo, Chase, Citibank, and a couple of dept store cards. I had kept in verbal contact with all accounts (the calls were initiated by me), but have avoided all calls for the last 2 months as I have no answers to give them as to how and when I could pay. There is just not enough income to cover. I made a 12 month arrangement with Discover and have maintained that so far, but the others are behind.
My year to date will be over 6 figures, but the last 5 months have been way short of that average. My current take home is a struggle to cover our living expenses. My wife also works to help cover those living expenses. We have refinanced all the equity out of our home to lower the payment, but were not able to cash out for elimination of other debt.
Where do I go from here? I have no real assets to sell to generate cash, no family members to ask for a loan, I am sure my credit score is dinged with the last 6 months being not paid so a consolidation loan is not possible. Do I start writing them letters asking for a solution? Are there archived letters that I could use as an example? Your insight and guidance will be greatly appreciated! I have kept a great attitude under the circumstances, but I really need some solutions for closure to our problem. Thanks
Welcome to the community.
Unfortunately, you looked for help a little too late.
I know the reason was because you were trying to do the right thing and being optimistic…and that is okay.
You have another hit coming with this months bill, because if you did try to make minimums you would find that they have doubled.
At this point you only three general options:
1) Make more money.
Do anything that you can to make money. Start an online business or do eBay. Sell used stuff animals on the side of the street or at flea markets. Sell your own baked goods — go door to door if you h ave to. Deliver newspapers in the morning…
Do whatever it takes to bring in more cash.
2) Cut and slash your budget.
If you have cable “git” rid of it. And I don’t want to hear that is they only way to have TV. Right now you don’t need TV–it’ll take away from our making more money.
Get rid of the cell phones. Get dial up on the computer instead of DSL.
Change you W2 form at work so you bring in more cash.
Whatever it takes to cut the budget.
It won’t be forever…only as long as it takes to get you out of this mess.
3) Settle your debts, either by doing it yourself or with a company.
At this point there is no other option. CCCs will not work, and snowballing is just out of the question do the lateness of your accounts, etc.
Your credit cards are a bitch (sorry if that offends anyone).
Most of your credit cards are the most difficult to deal with. Boy you know how to pick them :-s
Citibank, MBNA (now owned by BoA), BoA, Discover, and the retail cards are goina be a bear to settle with.
MBNA actually will be your best card if they have NO idea that you are working with a third party debt settlement company. With MBNA you can get as low as 20 cebts on the dollar more often than not if you know how to deal with them. But if they know you are with a company the gloves come off.
Citibank, MBNA, BoA and Discover will more than likely sue you ar attempt to. You’ve gone too long for that not to happen. The only thing that you can do is to challenge it and prolong it as longs as you can.
When selecting a debt settlement company, you look at a performance-based company first like Provanta or www.edebtfree.org first. If they can’t help then you’ll need a front-fee based company like Credit Solutions out of Dallas, TX.
If you live in TN, NY, Il, WA or any of the nine other states where debt settlement is illegal then you need to do-it-yourself or get an actual attorney. Of course www.edebtfree.org can help you as well. As what they do is teach you how to do the settlements yourself with one-on-one coaching and handholding.
www.edebtfree.org will charge the most for the first settlement and then the fees go down from there as you settle each one. You can quit at anytime in between settlements so you are not bound to any contract and you are doing the settlements yourself so they can operate in anystate.
When trying to settle with the creditors, try to settle the Citibank and the store cards first (the store cards are owned by Citibank) as they will be the most difficult, then MBNA/BoA and then Discover.
Because you are so late and have no funds you need to start to protect your assets from the creditors.
You will also need to know your rights so read the Fair Debt Collections Practices Act.
Finally, if you just want to try and do it all yourself without any company. Know that you’ll need to have some backbone and be able to deal with stress, because the creditors and CAs will try to put you through hell.
I recommend http://zipdebt.com/ if you want the education to do settlements for yourself. It is a very good program and gives all the information that you need to get yourself out of this situation.
It is lacking in the finer knowledge that will give the great deals, and is a bit general. You will not not get the inside knowledge that a company has and it doesn’t go in to how to establish those contacts that you will need to get 20 and 30 cents on the dollar deals.
It is GREAT though, if you are looking to do the settlements yourself. I can recommend the course highly enough for this.
And it is very affordable. For only $99 bux you get everything you need to settle your debts and for another $100 you can actually get one on one coaching as part of the deal. You simply will not find another deal like this.
When you compare the cost of the program to the amount your will save and lessened stress I would say it is the BEST deal around. I would gladly pay $200 bux to get rid of the debt monkey. That alone is well worth the cost.
I hope that this helps you out.
Feel free to ask any other questions you may have. I would love to help and I know there are many great, knowledgable people on this forum that will help as well.