Need your advice on $ problems

[hearts and roses]

Two of my friends qualified for bankruptcy and they both owned a home. Obviously, I am the odd person out in suggesting it. I still do not think it's such a bad idea given your situation.

However, if you don't want to do bankruptcy...

I like Trinity's idea a lot. Years ago after my divorce, I took out a personal consolidation loan to pay off high interest credit cards (about $10,000). I forgot all about that! I had a low interest rate at the time and it was a managable monthly payment. If you can qualify, that would be a good solution. Buy a car for say $7,000 and put the rest into the consolidated loan.

 

[Steely]

I will ask the guy about bankruptcy..........because I cannot even afford a monthly payment of a consolidation loan right now.

Maybe given all the crazy making at work, and the low pay, I need to start searching. Maybe that would be the ultimate solution.

 

[trinityroyal]

It would look better on my credit if my cards were not "settled", but paid in full - but regardless my credit is permanently altered.

Steely, please don't worry about your credit rating being permanently altered. Eventually, even a bankruptcy is expunged from your financial records. (I think the limit is 7 years)

If you settle your debts it will look better than if you default on your payments. And, if you keep up with regular payments once you have settled, then your credit score will keep improving until it's back to where it once was.

Each time you make a monthly payment, the credit bureaus record that. When you have a track record, month to month, of making payments on time, the credit bureaus raise your score.

It'll be okay, really it will.

Trinity

 

[susiestar]

Steely,

I was very much amazed after we went throught the credit counselling and financial education stuff to learn that our credit rating got BETTER because we worked with a credit counselling company. we paid a LOT less than we would have if WE called the creditors. I started the credit counselling because husband is a fool with credit cards. I wanted him to have some education in this.

When we went to buy a house, I really thought we would be SOL. Really and truly. But we had BETTER credit because we worked with a non-profit credit counselling group and paid the much much much lower monthly fees. If we paid it ALL off in lump sum agreements our credit would have been much worse, because one thing they want to know is if you can and will make monthly payments on time. The place we used did an automatic withdrawal, so we didn't forget. husband would when I was too sick to do the bills. (arggghhh).

I am so sorry. I know how painful and scary this is.

Hugs,

Susie

 

[KTMom91]

We're in a similar position...ended up living on credit cards when Hubby was laid off, and before I went back to work. We have defaulted on some of the cards, and have settled some, and are still in progress on settling others. Regarding the car...at some point the repairs will cost you more than a new one will. You just need to determine if you're at that point yet.

Another thing to consider, which few people know about...when you settle a credit card debt for a lower amount, that amount is considered taxable income. You will get a 1099-MISC and you will be required to pay taxes on the amount that was forgiven. If you don't include it, the Underreporter Department at the IRS, who really do go through tax returns and income info, and match them up, will send you a bill in about three years, which will include penalties and interest back to the original filing date. If that's happened already, and you didn't include it, you can call the IRS and request transcripts of your income info for the past ten years. You'll already have the tax bite on the money from Gma, plus the potential bite from settling with credit companies. Anyway, just something else to think about.

 

[Christy]

(((hugs)))) It's so hard when everything keeps costing more!

Go to the library and check out the book, Total Money Makeover" by Dave Ramsey. He is non-judgemental and gives excellent advice on how to tackle large sums of debt as well as how to deal with creditors.

Good Luck wiht your $$$$ situation,
Christy

 

[busywend]

Are you making a monthly payment now? Remember that will go away if you get the loan - then just put it towards the loan payment.

 

[Hound dog]

Steely

I'm going to admit I don't have time to read all of the replies. But wanted to give you my view, from the angle of someone who money has always been a mega issue.

Most cc co's will work with you to help you pay off your debt. (even by reducing the actual debt amt) Depends on the co as to how far they'll help. But they will cuz their goal is to get as much money out of you as possible.

Make sure the car you have won't cost less to get into good condition before considering buying another. Do this whether you intend on attempting to pay down your debt or not with the inheirtance. Why?? Cuz if you can fix the car you have cheaper than buying a new one, you can use the money left over as a cushion. This cushion can help with other bills and maybe lower payments on the cc amts.

Believe it or not, that will help you're credit in the long run, not hurt it. Because it would show you're trying to pay even though you're having hard times.

husband is still kicking himself in the arse for not listening to me when he got his retirement payout. Instead of doing this he ran out and bought a new vehicle. His car was old, but with some work would've been just fine. Now he's stuck with a newer vehicle that still needs work, and is also one that is really bad on gas. And of course, our "cushion" went thataway. grrrrrr