Credit card debt

We recently sold our house in CA and moved to TN. We paid cash for our house but have been living on our cards since April of this year. Needless to say, the balance is pretty high now, almost $26,000.

I don't think I qualify for bankruptcy because we own our house, but what about these debt programs where you can deal with the card issuer and get the debt amount cut and pay what we can on a budget??

My husband has just recently gotten a job, but is still only making $8.50 per hour (about $20k a year) and we have a family of 5 to support on that. I *thought* he would get a better job here and we would be able to support ourselves and pay the debt, but it's not looking like that will happen any time soon.

I am pretty sure the card is only in my name and I don't work at all.

I have moved over some of the debt ($10k) to another card that is giving me 1.99% interest for a year, so I think I can manage that card, but know I can't handle the $537.00 payments on the big card. :(

The fact that you recently bought a house and paid cash for it....... is a BIG blow to your filing bankruptcy.............. the Trustee is going to want to know why you didn't pay your creditors with part of that money and finance the house partially.

Your house "being paid for" makes it an asset for the Trustee to take if it is not exempt.............

You need to discuss your situation with an attorney, the fact that your paid cash for your house, you just moved recently, etc....

Have a consulation, find out where you stand and let us know what your attorney tells you......

Keep us posted....

I can't afford an attorney and would do the BK myself if I had to.

I DID pay down the cards when we sold the house, I think I only owed about $6,000 on them when we left CA. But living on them all this time and then hubby not getting a job fast and then a very low paying job, it just killed us.

We had to pay cash for the house because we couldn't qualify for a loan since he didn't have a job. :s

I don't WANT to file BK, I just want to make a deal with the card company (the ONE card) and see if they will reduce the debt if I agree to pay on a budgeted plan. I thought I could carry it until my husband got hired on (he's still just temping) but the bill just came today and it's over $500. My monthly payment used to be only a couple hundred. :s If my husband is only making $1300 a month, we can't afford the $500 on the ONE card.

Call a few BK attorneys - the first consultation is usually free (obviously ask about that before you go!).

you might do better trying for a home equity loan - even with the low income, having 100% equity in your home might allow you to get a loan. Probably lower interest than the CC's and spreads the payments out over a longer period, so the payment is lower.

Then, when he gets a better-paying job, make bigger payments to get it paid off.

Also, for a family of 5 with low income, you might qualify for food stamps, medical benefits, etc. As a temporary help until you get on your feet, it might make a big difference!

you might do better trying for a home equity loan - even with the low income, having 100% equity in your home might allow you to get a loan. Probably lower interest than the CC's and spreads the payments out over a longer period, so the payment is lower.

I'd be very very VERY careful about making unsecured debt into secured debt. I wouldn't do it.

We don't qualify for the food stamps since we own the house and two cars. One car is only worth about $3000 but still considered an asset and we can't do with one car as I home school my kids and we need a second car.

We don't qualify for an equity line of credit yet, that was the original plan, but with him making so little and our debt being so high, I can't even get an increase on our card limit and our credit is impeccable.

We have consolidated all we could, we sold the motor home we moved out here in, so that debt is gone, the only debt we have is the cards. I just would like a more manageable payment. :s

I'd be very very VERY careful about making unsecured debt into secured debt. I wouldn't do it.


Our original plan was to do this because WE did incure the debt and want to be responsible. But we can't even get a loan at this point and yes, once you secure it with the house, if we can't make the payments, we lose our house. So I am kinda glad we can't get the equity line of credit.

Even if you plan on filing pro se, consult a few attorneys (FREE consultations) and ask these kinds of questions. It's worth it to hear from an expert how much all that stuff will hurt you.

But isn't there a way to just deal with this one card company to reduce the debt and put me on a smaller monthly payment??

But isn't there a way to just deal with this one card company to reduce the debt and put me on a smaller monthly payment??

Sometimes the card company will work with you, but most likely not. Now, another forum member was able to successfully negotiate terms, but your mileage may vary depending on your creditor and circumstances.

Don't go with a debt counseling company. They'll only make things worse.

One thing to be weary of is that any amount of debt over $600 that is "forgiven," you will have to pay the income taxes on. I don't know if you'll be able to successfully negotiate new terms - I was never able to. But good luck if you do.

Ugh, that's bad news. :(

Do you start with the card company directly before it goes into default/collections??

It's unsecured debt, what's the worst that could happen if I just didn't pay it and didn't file BK?

I really am NOT worried about our credit. I have amazing credit and we really don't need to finance anything anyway. We have a house and two cars that run, we certainly don't need to get into any more debt!

I don't know who you are dealing with as far as cards go, but when we quit paying on ours, one of them would call us and my husband would say- I can't make my payment- I lost my job, they would then offer a bunch of smaller payments- how about 400, or 300 etc....
They did offer us a hardship type of position that would not make the interest rate skyrocket.

Also, my friend had a bunch of little balances -nothing over $4000and the companies started calling trying to settle for a lot less than that, but they wanted the payment basically in full or just a few payments. Plus he would have had to pay taxes on it I think.

I think most of the card companies are total jerks who do not like to work with people even though it might be in their best interest, but once in a great while they will work with you.

You asked what is the worst they could do if you stopped paying the credit card debt. The worst is that they could get a judgement and put a lein on your house, where you'd have to pay or they could take your home. That would be probably about the worst case scenario. They could also get an order to garnish wages, which could be up to 25% of your pay, very state-dependent so check yours for it's specific ganishment rules. (Here in Ohio they were taking 25% of my husbands net income, in some states they protect a certain amount before they can garnish, in some like Texas they can't take your pay at all.) So while the credit card debt is unsecured, there are still things they can do to collect, and since you are sitting on an asset (your house) my guess is that if they really wanted to get nasty, that's what they would go after. Hope it doesn't come to that.

Can you just get a little part time job making the 500. a month?
I know it is hard with the kids, but would only be temporary until you pay it down or hub gets better paying job. Or, have hub get part time job.

Having your house paid for is wonderful. If you can get a handle on this cc payment and start using cash for everything, you will be set.

Thank you Amelia and B12.

I think I'll call them when I get up the nerve, and see if they would reduce the debt if I pay in full. If they could come down 40-60% I could get a small loan somewhere else to pay it.

All this wouldn't be a problem if my husband could just get hired on, but some people have been temps for 18+ months there, so we're not expecting it anytime soon. :s

Can you just get a little part time job making the 500. a month?
I know it is hard with the kids, but would only be temporary until you pay it down or hub gets better paying job. Or, have hub get part time job.

Having your house paid for is wonderful. If you can get a handle on this cc payment and start using cash for everything, you will be set.

That's the idea, but I thought it would be under control by now. It's been 4+ months since we moved here. The house is our retirement, we have nothing else, so we have to hold onto it no matter what. We bought low, so we should gain equity fairly fast, but at least we don't have the house or rent payment right now.

If it wasn't for the card bill, we could make it on $8.50 per hour. With that card debt, if he got hired and made $10 per hour, we would be able to pay it, but it's getting harder and harder when the monthly payment keeps going up like it is.

Come on, you can do this. You or hub go get a part time job at the Piggly Wiggly in TN, (sorry lolol, New Yorker inside joke) and make that extra money to get rid of that payment.

Sounds like you are an excellent budgeter and have a wonderful family. Go get that card paid off.

Do you start with the card company directly before it goes into default/collections?? Most companies will not even talk to you until you are several months past due and even then don't get out the serious reduction offers for quite a while after that. Don't forget about the 1099 taxes you'll pay on whatever is forgiven as well.

It's unsecured debt, what's the worst that could happen if I just didn't pay it and didn't file BK? Oh, how about wage garnishment, liens against assets....nothing good, I promise you.

You have valuable assets - that means the companies are very likely not going to deal. They will garnish your wages or get a lien against your home to pay off the debt instead. It is definitely NOT a good idea in your situation to do nothing.

I have amazing credit and we really don't need to finance anything anyway.Allow me to redirect your thinking a little farther down the line. You have amazing credit NOW and don't need to finance anything NOW. What about 10 years from now?

Deal with this problem now while your credit is still good. Find a part-time job when your husband is home to be with the kids, take in a child for babysitting, sell stuff on eBay, pick up work you can do from home, etc - be creative.

All of us would have preferred to maintain our status quo and not change what we were doing once we realized we had serious financial problems. However, to get out of this debt hole, you may have to consider making a few temporary compromises to generate more income for the family short-term and pay down or pay off the big debt that is slowly killing you now.

You are looking for a way out....generating a little more income while continuing to stay home with the kids is the best one in the long run.

There really aren't any jobs that I am qualified for and with home schooling my kids, I can't be gone while they're home.

I guess we'll just keep trying to make the payments. I don't mind drawing this out for many years to pay it off, but the $500+ monthly payments aren't going to come out of thin air. :(

All we need is for hubby to get hired on and life would be sweet! I guess I'll just keep doing what we're doing and hope he gets hired on soon.

There may be some good news.

You said you thought all the CC debt was in your name alone. If that's the case, your house could be safe.

Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

http://www.bankruptcyinformation.com/TN_exemp.htm

Definitely something to check into as you research around.


Our experience was the same as CHP. None of our Creditors or our mortgage Lender would work with us.

Individuals being able to negotiate deals is the exception, rather than the rule. At least from the bulk of postings here anyway.

For sure, investigate the TbyE angle as SF suggested.
Does that temp job offer helth insurance? Regardless if you file or not, you can't support a family of 5 on $8.50/hour=particularly if there is no benefit package.He either needs to find some pt work or, while he's home with the kids, you need to get a job. You don't need any special qualifications to work at WalMart or some other retailer.

She obviously cannot work or doesn't want to work. With that many kids she is better off at home. Your husband will have to find a better job and fast. If not you'll have to sell the house. There aren't that many options with your current situation. Ignore me all you want but you'll see.

LOL I meant, ignore your attitude. Your advice, sometimes is sound.

I can't make enough money to make it worth me working, I haven't worked in 15+ years I have no skills and jobs are very hard to come by here.

The job my husband has is a better job, he was working 16 miles out of town for $8 per hour, now he's closer to home (only 2.75 miles) and is making $8.50 per hour. He's working as much overtime as they'll give him. He worked Sat/Sun and made almost $200 extra.

If it weren't for the credit card payment, we could survive on $8.50 per hour. The temp agency does offer health insurance, but it's $200 a month for crappy coverage. So we can't take it. At this point my kids are all covered on the state plan which costs us nothing.

I will look into if he's on the card. I know I didn't have his signature on there, but he does have a card in his name. Does that mean he is on the account. I mean, I have one card I don't use and my mom has a card in her name, but that doesn't make her responsible for it does it? (it's not used and has a zero balance).

If it wasn't for the interest I would have things made, like the one BofA card, the interest is only $23 a month (or some incredibly low amount)

As for if we'll make it or not, we aren't out of options just yet, I am not worried and we WILL make it. I am just trying to find out what options are the best at this point.

Have you considered selling the house and buying one that is 26K cheaper?

As others have said, a part time job might be the way to go. Christmas is coming, and you don't need any experience to work some retail store somewhere.

Have you considered selling the house and buying one that is 26K cheaper?

As others have said, a part time job might be the way to go. Christmas is coming, and you don't need any experience to work some retail store somewhere.

I did retail for extra christmas shopping money last. I had no retail skill, but they hired me. They mainly wanted people who could work evenings and weekends. So I was off to the second job while hubby was home. Just working two to three evening or weekend shifts I made on average 250 extra a month. It wasn't much but every little bit helps.

As for everything being in only your name. It sounds like you need to call up the cc companies and ask who is the owner of each account, who are co-debtors, and who are authorized users. Account owners and co-owners are responsible for the debt. If everything is truly in your name you may be able to file and keep the house. Deffinately look into it.

As for everything being in only your name. It sounds like you need to call up the cc companies and ask who is the owner of each account, who are co-debtors, and who are authorized users. Account owners and co-owners are responsible for the debt. If everything is truly in your name you may be able to file and keep the house. Deffinately look into it.

I talked to Citibank today, I am the owner of the account, my husband is a user on it. They can't lower the interest rate at this time as I am already on the lowest interest rate they offer. They can lower my rate to 0% for a couple months, but that won't do me any good as in a couple months I'll still be in the same boat.

They only offer "settlements" for terminally ill people. :(

This is the only card I have a problem paying. I have moved $10k over to another card that I am only paying 2.99% on until next August and I think I have a grip on it and can pay it off before then. But this one, I'll never pay it off.

I don't mind trying, but the problem is, the payment is $550 a month and $300 of it is going toward interest. So at $250 a month going to the principle, it's not going to get us anywhere, ever.

And even if I did get a job or he worked all the over time he could, there's no way we're going to pay off $25k and the $10k on the other card.

Can anyone tell me what my options might be?!

There may be some good news.

You said you thought all the CC debt was in your name alone. If that's the case, your house could be safe.

Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

http://www.bankruptcyinformation.com/TN_exemp.htm



So to file myself, I would just not list the house as an asset?

We have two cars in both our names too. One we just bought for him to use to go to work, it's only worth about $3000 but the van we bought 5 years ago is probably still worth about $14,000. I guess that wouldn't be exempt and I would have to sell it? Used cars here are just so dang expensive. The older car we bought a few months ago, we paid $4000 for it and it's 15 years old with 160,000 miles on it and that was the best deal we could find for a reliable car.

You're probably not going to be able to use the TN exemptions if you just moved there. Hopefully the exemptions you can use offer some protection for your home and cars.

As many have suggested you should do 3-4 attorney consultations. Most are free.

Write down your assets (including approximate value), amount owed on assets, all debt, whose name the debt is in, income, places of residence for the last 3 years, all your questions about BK and see several attorneys. Even if you're filing yourself it is strongly recommended you do this. You can also post this info here for advice and ongoing help getting through BK.

Piecing your posts together it sounds like your unsecured debt is twice the amount of your annual income. That's a deep hole to dig out of without filing BK or selling your house.

Good luck.

Well I think I can do it if I just have a reasonable interest rate. But Citibank isn't going to lower the rate to make it worth it.

I just applied for a Chase card with 0% until February 2009, if I get accepted, then I'll transfer everything over to it. I can pay $500 a month on the cards, but not if $300 of it goes to interest, I am going to get nowhere. But if I pay $500 a month with NO interest, then in the 14 months I will have $7000 paid off, which is a nice chunk of it. At that time I could transfer it to another card possibly.

As for our income/debt ratio, the only debt we have is the cards, the BofA card I can manage. I have enough money in my BofA checking account to pay that minimum for 12 months. (it's only $120 a month) so I will let the checking account balance pay that bill for now.

Our bills are low, we don't have a house payment and the most expensive thing we buy is food, so on his income we can make it. It's just that whopping $500 a month, which if he works overtime we can pay it. He is going to go talk to the shipping department today to see if he can work 2 hours over time every day in that department. If he works 2 hours over time a day, he'll make enough to pay the other card payment.

He's waiting for a permanent job to open up at this company, if that happens, he'll go up to $10.50 per hour, so then we'll have no problems at all. But he's only bee there a couple weeks, so it all takes time, we just have to buy time until it happens.

If I can get the debt moved over to the 0% I think we'll be just fine.

I just talked to a friend who is in a bigger hole then I am. She also moved from CA to TN to get out of debt, but do to Dr.s bills and credit card offers, she is in debt over $100k just in those things, not including her house which she owes her dad for. She stopped paying Citibank over a year ago and in 6 months time they gave her a settlement offer of 60%, she had to make two payments to pay it off. If I don't get the new 0% card, I might have to try my luck with Citibank.

If I do stop paying Citibank will they send me a settlement offer for sure? What if they don't? If they do, I could borrow the money or take out a small loan to pay the 60%.

But interest is still adding up for all those months and then no-pay fees and such right?

As for selling the house, it's not an option. Houses aren't selling here and we're likely to not get out what we paid for it, PLUS, even if I got what I paid, I would have to pay nearly $20,000 in Realtor fees and closing costs, so it's like throwing away $20,000 which if I was going to throw away money, I would just throw it away in the form of credit card interest.

Citibank will work with you for a few months. My experience is 0% for six months and then they want to review the situation. In my own experience, they do not have any long-term (5-year) payoff plans. My educated guess is that Citi will charge-off your account six months after your last payment. Then, I assume they assign (or sell) to an outside collection firm. I'm not positive about this.

Other national credit card companies can offer 5-year payment plans; but it varies from consumer to consumer (what I've read on this board and others.)

It has been my experience if that you are not going to file, you need to speak with folks about any kind of plan they can offer. If/when you know you are filing, then there is probably no concern.

I find the amount of debt big companies are willing to write off (unsecured and secured losses) staggering. See what Citi announced the past couple of days. I don't get it! I guess they are just not set up to deal with the problem.

JMHO

So if I don't get the 0% new card, should I just let Citi default and see what they're willing to do? What if I do default and they don't offer me a plan?

OK, I heard back from Chase, they approved me for $4000 and transferred $3500 over to the 0% interest card.

Then I got a pre-approval for BofA for up to $10,499 at 0% until 10/08. I applied and got $11,000 so they are supposed to transfer $10k over.

So that means $13,500 is transferred to 0%. That should help?!

I have $10,000 on a BofA card that is at 2.99% and the interest is only like $32 a month. I should only have $12,000 on the Citi card at 12.5% interest, that will still hurt, but I think I can just keep asking for increases on the other cards and if I can pay it down and transfer some more to 0% then I'll have it made. (I hope)

I recently read about a man that had a house in NJ ( I believe) and moved to FL for retirement, he too paid cash for his house. Then, down the road he could not afford to pay his bills either. The court argued about that, but then stated, when he paid for the new house, he had no idea that he would not be able to pay his bills. They went with the thought that he had good intentions of living out his retirement, and not going broke as he did. They still discharged him and didn't make him sell the house he paid cash for. I hope that story helps. Just have to get people that understand life doesn't go how we plan, and sadly the job market just sucks all over now.

Just thought I'd ask and make sure you are keeping only your name on these cards in case you need to stop paying them in the future?? But it looks like you have a plan for now and hopefully a job will come through for hubby soon. I'll keep my finger and toes crosssed for you.

Thanks for the replies.

Yes, the cards are still only in my name. I hate spreading things out like that, but with the zero interest, I can pay the minimums on those cards and send more to the one with the 12% for now. I will only owe about $12,000 on that one so could make a good size dent in it since the interest won't be as much since the balance isn't as high.

I am working on it. I know since our bills are so low, that we have a better shot at it then anyone else. I added up our monthly bills and it comes to about $360, that does not include our insurance policies and come 02/29/08, we will have $1800 due for taxes, but we should get back at least that in our income tax refund. (fingers crossed)

I haven't used the cards for about a week and a half now, which was part of the battle. I was used to using them for EVERYTHING, so I think with his $1300 a month income, we pay our bills, and will have about $950 left over for food, gas, and card payments. It will be tight, but it's not impossible for now.

Indebt, there a few tricks you can try with your credit card companys.

what are your interest rates at currently.? are they high like in the 20's.? which is not too uncommon these days.?
Before of places that fix cards, as I did that and what they did was negotiated a payment for me and it did help me from the monthly perspective, but long term wasnt such a good thing. They will end up closing the cards, which doesnt help you.
I have removed all my cards from debt management(lessoned learned) and would never do it again.

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Thanks for the info.

I did move most of the debt to 0% interest cards. I now have:

$10,000 - Bank of America 0% for 12 months
$10,000 - Bank of America 2.99% until paid
$3,500 - Chase 0% for 14 months
$13,000 - CitiCard 12.99%

I will pay the minimums on the 3 lower interest cards and send extra to the CitiCard when I can. I think having the 0% on the majority of the debt will help immensely.

I homeschool as well and I wanted to tell you that I make about $85 a month doing surveys from 3 reputable companies. It's not a lot of money for sure, but it pays a bill or two. The companies are sendearnings.com, inboxdollars.com, and pineconeresearchcom. Pinecone pays $5 a survey and you receive a check in the mail about 4 days after you do a survey. The problem though is you can ONLY sign up on one of their flashing banners online. Some people find a banner only after months of searching but I found a banner after 3 hours of searching. Just google pinecone banner and always look at the top of major websites to see if a pinecone banner is flashing.

Sendearnings and inboxdollars pay a dollar a survey and you can do one a day from each company. They send a check out on a net 30 basis. Ive belonged to these 3 for a long time. There are other survey places online but most are scams. Notice that I did not include my referral number, and I didnt for 2 reasons, one I am not trying to make money here by posting this info and 2, I dont do referalls anyway. A lot of people do, but I don't.

Good luck and if this doesn't help you I hope it helps others who read this.

Thanks for the info.

I did move most of the debt to 0% interest cards. I now have:

$10,000 - Bank of America 0% for 12 months
$10,000 - Bank of America 2.99% until paid
$3,500 - Chase 0% for 14 months
$13,000 - CitiCard 12.99%

I will pay the minimums on the 3 lower interest cards and send extra to the CitiCard when I can. I think having the 0% on the majority of the debt will help immensely.

Kepp your eye on Chase. They can be super nasty. And they are sneaky.