Hire a credit counseling company to negotiate reduced settlements you can pay off at lower interest with no more penalties mounting. Tear up the cards and NEVER use them again. EVER. In about ten years you may have the amounts paid off. Do NOT return to using credit cards, even then. Go to a cash management system and only purchase (month to month) what you can afford. If you do not follow this advice you’ll simply end up in the same situation again in ten years (like so many people posting questions here) and not learn from your mistake. Good luck
First, STOP using any credit cards. You need to wait 90 days before filing (if you decide to file). Also, stop paying the minimums. Take that money and save it for an attorney. You should consult with a bankruptcy attorney IMMEDIATELY. Most will give you a consultation for free, they just won’t proceed until you have paid them their fee plus the filing fee, in advance.
The bamkruptcy court may make you pay some or all of the charges made within 90 days of the filing date.
All of your assets will belong to the bankruptcy court if you file, but they are pretty generous as far as exemptions & allow you to live pretty comfortably.
Bankruptcy is tough for a while (during the process), but if you are completely honest it can give you a fresh start. And it doesn’t completely ruin your credit either.
The important thing is not to repeat the same behavior and expect different results.
And, it isn’t entirely your fault, so don’t feel too bad about it. It’s a trap that is purposely set up by credit card companies, and the credit card business is a multi-multi-billion-dollar business!
There is a ‘free’ consultation with a bankruptcy attorney for about 20 minutes, this may help you make your decision, before that I would
check every aspect I could, if you have already done that, a personal loan from a family member perhaps???with a debt consolidation?
good luck to you, but one thing DO NOT keep using the cards….
and tighten you budget, learn to live differently… make a list of WHAT you really NEED not WANT!!
With out knowing what income you have its hard to deal with the answer. But this will work. Sell the car and get one for cash. Cars for 500 are fine but might not look so good. Now you pay rent elec etc, first. Starting with the smallest amount owed you pay this one off first. You make the minimum payments on the others. Keep this up until everything is paid off. Get a second job and get rid of the car first.
Have you tried credit counseling? Check here for one near you: http://www.nfcc.org/. These are legit, non-profit companies. They can review your finances and advise you how to proceed. They have debt management programs available if you qualify.
Chapter 7 may or may not be the answer depending on your income level. To qualify to file for Chapter 7 you need to pass a "means" test: your income must be below the average for your state.
Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS) in your area. They can negotiate much lower payments and interest rates.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you’re enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt.
Please note that CCCS cannot perform miracles in situations where there is an overwhelming level of debt relative to your income/assets. Sometimes Chapter 7 bankruptcy is the only solution to overwhelming debt. Don’t let anyone smear or guilt-trip you for making this decision if you have to…especially all the people who like to quote Dave Ramsey who think that BK should always be avoided….this is ridiculous advise that only benefits credit card companies…Of course BK should be avoided if at all possible…but sometimes it is needed. Do what’s best for you and your family. Corporate America uses BK all the time and no one slams them.
Just remember that you can only file for Chapter 7 once every eight years….so if you file, you won’t be able to discharge your debts again for eight years, even if you find yourself in a worse financial situation..
STAY AWAY from any debt settlement firm you see advertised on cable TV or the Internet…they will only make things worse for you.
A second job is the answer. But if you cant do that and If you want to cut alot of that debt off, sell the car. (as i suspect you probably have at least a 20k car right?) That would free up at least 400 dollars per month. (if you have negative equity, sign a note for teh difference) Then buy a beat up old car for like 1000 bucks. You can buy an old geo or old hyundai for under 1500 on ebay. Plus your car insurance will be cut almost in half because you will not have to pay full coverage and it will be cheaper also on an old car.
After that, have a garage sale. With 40k of debt, im sure you have a big screen plasma TV. Sell that and stop your cable. That will save you 50-80 bucks per month, plus you’ll get 700-800 for your TV (more or less depending on the size of it) That will be able to go toward your debt too.
Now just doing that (assuming your car loan was 20k) will give you enough cash to pay off the rest of your debt in about 3 years. If you live off beans and rice, you might be able to do it in 2 years. Get a part time job on weekends and you might be able to pull it down to 18 months. Think you can be ok driving a beater car for 18 months and living with no TV? And just think…after 18 months…you will have all that extra cash coming in and you are now used to that lifestyle so you will not feel like you need to go spend alot of money to be happy.
The first thing you have to do is stop using the credit cards. You need to sit down and make your self a budget. Once you write down all expenses, housing, cars, credit cars, loan payments, insurances, food, gas, and anything else you spend money on. Once you write it down you will be shocked were you are spending money. writing down for even a week everything you spend will help you get a under standing of where you can cut back. Once you know where the money is going set-up a budget. Its important to know when your bills are due and when you will pay them and how much you can afford to pay them. Call all of your credit cards and ask for a repayment plan, explain to them you want to get them paid, ask then to block any new purchases and arrange a payment you can afford. This step is very time consuming and hard on the ego, but can keep you from bankrupcy. With house and auto loans call the lender and ask for interest only payments or if you can have an extension for a month or two. some lenders will work with you to get payments down so you can afford them. The one thing is once you set these payments up if you do not make them most companies will jack up your interest rates and will send you to collects or to their lawyers to go after your wages. So its really important to communicate with everyone you owe money to and be honset. I did all of the things I have told you and it took me over a year to get my finances in order. It was tuff but after getting payments under control and my spending under control, I got to refinance and I have no credit cards. I have learned to save for the things I want. If you can do this your stress level will lower and you can stop the collects calls and you will be able to sleep. I know I lost lots of sleep worry about what I was going to do. Bankrupcy is tough and most of the time they just set you up on payments. Its hard to get credit again after bankrupcy. Good Luck.
Hire a credit counseling company to negotiate reduced settlements you can pay off at lower interest with no more penalties mounting. Tear up the cards and NEVER use them again. EVER. In about ten years you may have the amounts paid off. Do NOT return to using credit cards, even then. Go to a cash management system and only purchase (month to month) what you can afford. If you do not follow this advice you’ll simply end up in the same situation again in ten years (like so many people posting questions here) and not learn from your mistake. Good luck
First, STOP using any credit cards. You need to wait 90 days before filing (if you decide to file). Also, stop paying the minimums. Take that money and save it for an attorney. You should consult with a bankruptcy attorney IMMEDIATELY. Most will give you a consultation for free, they just won’t proceed until you have paid them their fee plus the filing fee, in advance.
The bamkruptcy court may make you pay some or all of the charges made within 90 days of the filing date.
All of your assets will belong to the bankruptcy court if you file, but they are pretty generous as far as exemptions & allow you to live pretty comfortably.
Bankruptcy is tough for a while (during the process), but if you are completely honest it can give you a fresh start. And it doesn’t completely ruin your credit either.
The important thing is not to repeat the same behavior and expect different results.
And, it isn’t entirely your fault, so don’t feel too bad about it. It’s a trap that is purposely set up by credit card companies, and the credit card business is a multi-multi-billion-dollar business!
There is a ‘free’ consultation with a bankruptcy attorney for about 20 minutes, this may help you make your decision, before that I would
check every aspect I could, if you have already done that, a personal loan from a family member perhaps???with a debt consolidation?
good luck to you, but one thing DO NOT keep using the cards….
and tighten you budget, learn to live differently… make a list of WHAT you really NEED not WANT!!
Good luck to you.
With out knowing what income you have its hard to deal with the answer. But this will work. Sell the car and get one for cash. Cars for 500 are fine but might not look so good. Now you pay rent elec etc, first. Starting with the smallest amount owed you pay this one off first. You make the minimum payments on the others. Keep this up until everything is paid off. Get a second job and get rid of the car first.
Have you tried credit counseling? Check here for one near you: http://www.nfcc.org/. These are legit, non-profit companies. They can review your finances and advise you how to proceed. They have debt management programs available if you qualify.
Chapter 7 may or may not be the answer depending on your income level. To qualify to file for Chapter 7 you need to pass a "means" test: your income must be below the average for your state.
Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS) in your area. They can negotiate much lower payments and interest rates.
They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you’re enrolled in the CCCS debt management program…. Otherwise, it can be a very good way to deal with your debt.
Please note that CCCS cannot perform miracles in situations where there is an overwhelming level of debt relative to your income/assets. Sometimes Chapter 7 bankruptcy is the only solution to overwhelming debt. Don’t let anyone smear or guilt-trip you for making this decision if you have to…especially all the people who like to quote Dave Ramsey who think that BK should always be avoided….this is ridiculous advise that only benefits credit card companies…Of course BK should be avoided if at all possible…but sometimes it is needed. Do what’s best for you and your family. Corporate America uses BK all the time and no one slams them.
Just remember that you can only file for Chapter 7 once every eight years….so if you file, you won’t be able to discharge your debts again for eight years, even if you find yourself in a worse financial situation..
STAY AWAY from any debt settlement firm you see advertised on cable TV or the Internet…they will only make things worse for you.
A second job is the answer. But if you cant do that and If you want to cut alot of that debt off, sell the car. (as i suspect you probably have at least a 20k car right?) That would free up at least 400 dollars per month. (if you have negative equity, sign a note for teh difference) Then buy a beat up old car for like 1000 bucks. You can buy an old geo or old hyundai for under 1500 on ebay. Plus your car insurance will be cut almost in half because you will not have to pay full coverage and it will be cheaper also on an old car.
After that, have a garage sale. With 40k of debt, im sure you have a big screen plasma TV. Sell that and stop your cable. That will save you 50-80 bucks per month, plus you’ll get 700-800 for your TV (more or less depending on the size of it) That will be able to go toward your debt too.
Now just doing that (assuming your car loan was 20k) will give you enough cash to pay off the rest of your debt in about 3 years. If you live off beans and rice, you might be able to do it in 2 years. Get a part time job on weekends and you might be able to pull it down to 18 months. Think you can be ok driving a beater car for 18 months and living with no TV? And just think…after 18 months…you will have all that extra cash coming in and you are now used to that lifestyle so you will not feel like you need to go spend alot of money to be happy.
The first thing you have to do is stop using the credit cards. You need to sit down and make your self a budget. Once you write down all expenses, housing, cars, credit cars, loan payments, insurances, food, gas, and anything else you spend money on. Once you write it down you will be shocked were you are spending money. writing down for even a week everything you spend will help you get a under standing of where you can cut back. Once you know where the money is going set-up a budget. Its important to know when your bills are due and when you will pay them and how much you can afford to pay them. Call all of your credit cards and ask for a repayment plan, explain to them you want to get them paid, ask then to block any new purchases and arrange a payment you can afford. This step is very time consuming and hard on the ego, but can keep you from bankrupcy. With house and auto loans call the lender and ask for interest only payments or if you can have an extension for a month or two. some lenders will work with you to get payments down so you can afford them. The one thing is once you set these payments up if you do not make them most companies will jack up your interest rates and will send you to collects or to their lawyers to go after your wages. So its really important to communicate with everyone you owe money to and be honset. I did all of the things I have told you and it took me over a year to get my finances in order. It was tuff but after getting payments under control and my spending under control, I got to refinance and I have no credit cards. I have learned to save for the things I want. If you can do this your stress level will lower and you can stop the collects calls and you will be able to sleep. I know I lost lots of sleep worry about what I was going to do. Bankrupcy is tough and most of the time they just set you up on payments. Its hard to get credit again after bankrupcy. Good Luck.