The Debt Consolidator

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Need advice on Credit problems(debt)?

I am about $20k in debt with my Credit cards. I exhausted my unemployment and just got a part time job making about $1000-$1200 a month(gross). Anyway that is not enough to pay my credit cards. It only gives me enough for rent, car insurance etc.
So i have 3 options. I can file for bankruptcy, debt consolidation or just not pay any of my cards.
I do not own any property (i rent) but i have over a 700 credit score. I know my credit score will take a hit but I dont plan on buying a car or property in the next 3 or so years.
What do i do? Even if i get another pt job, I will only make minimums and not lower my debt at all.
I’ve got to make a decision this week, I got bills due this weekend I don’t have money for.
Please help with your advice!!!! Thanks
I am currently looking for another pt job but unfortunately most pay minimum wage and that would still not be enough all my CC bills.

$20,000 in credit card debt means what, at least $400 a month in payments, probably a touch more.

$1,000 a month gross, less taxes, less rent…

There’s no way you are paying those credit cards. Unless you have a rich uncle who will pay them for you, or you have real and immediate prospects of getting a job that pays you 5 or 10 times what you are currently making, you should just stop. One way or another your credit is going to take a big ding, and it’s better to face that sooner rather than later.

You could declare bankruptcy. That may be your best option since it will wipe out the debt. Unless you have assets you want to protect, though, like a house or valuable personal property, you don’t _have_ to declare bankruptcy.

Usually my advice to people in your situation is to stop making their credit card payments, wait 90 to 150 days so that they are severaly delinquent, and then negotiate a settlement of the debt. Settlements usually range from 25% to 50% (or slightly more) of the amount owed, but then you are debt free once that is paid. The catch is that you have to pay it in one lump sum or in a few payments (say over 3 months).

In your case, on $1000 to $1200 a month, I don’t even see 25% as a real possibility.

Therefore, the debt is going to go bad. You can stop making your payments and ruin your credit that way, or you can declare bankruptcy and ruin your credit that way.

Declaring bankruptcy hurts your credit more, and there are some banks that will simply not lend to you for 7 to 10 years after a bankruptcy. Simply defaulting has the downside that the banks or someone they sell the debt to will continue hounding you and trying to collect for the next 7 years (or more, although legally they have to stop at 7 years — they conveniently forget much of the time when the 7th anniversary comes around). If you simply default, they could come after you in several ways — by letter, by phone, by taking you to court, by offering you another credit card if you put the debt from this one on that one, etc. For the most part you can ignore everything they do, but it can get annoying, and if they do take you to court, you can’t ignore that. If they do that, you may have to declare bankruptcy. But again, even if the court judges against you (which they will 99.9% of the time — the reality is that you do owe this money and unless you can prove otherwise or prove soe malfeasance on the other part, or possibly show severe hardship, the judge has to rule against you) you still can’t be forced to pay money you don’t have.

Anyway, the responsible thing to do is probably to declare bankruptcy.

Depending on the nature of your job, you may be better off finding a way to be “out of work” when you declare bankruptcy so that you can write off more of the debt rather than having a structured payment plan.

pay debt or save
SHould we pay debt or save?

We are financially strapped. We have an extra $200 a month. Should we save it or put it towards debt?? I know we should pay of debt asap, but we also have no savings. Which is more important right now?

If you have NO emergency cash on hand, then by all means save some up first and then begin paying off your debts.

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debt free services

lower your debt
How do you go about negotiating with credit card companies to lower your debt?

Is it possible to have the actual amount owed lowered? Does it affect your credit score?

Beware of settlements, if you settle your debt with a creditor it will be income to you and you will be reporting that income on your next tax return. Also your credit rating/score will take a major hit at the same time. Which means that the next time you apply for credit you will be paying a higher interest rate because you are a greater risk.

loan consolidation debt
Do you think i will get a loan?

Ok here’s the circumstances -

Do you have a relationship with your bank? Is there harm in trying?
Sounds like there is a chance.

debt consolidation program

loan to consolidate
I have been trying to get a loan to consolidate and close 2 large credit cards.?

I have been turned down even though I pay more than the minimum amount, they say my debt to income is off too much. I don’t want to use those services that ruin your credit take your money, negotiate with creditors then pay off the bills leaving a mark on your credit score

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how to pay my debt
Having problems working out my money longterm?

I live in England and earn approx. £1700 per month. I have to repay a loan – approx £20K – the monthly instalments are approx £300. I was wondering if it would be more worthwhile my buying a property or something and repaying my loan from the mortgage and at least my monthly repayments would be going towards something rather than just paying interest etc back.

USA here, and things are SO different here that probably you won’t get an appropriate answer from anyone here. I know that all the money gurus I read or listen to say PAY YOURSELF FIRST…so if that is universally true, then the home would be best.

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