Credit card debt

[indebt]

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.

[Minnymouth]

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....

[indebt]

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.

[kiddles]

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!

[chpxiii]

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.

[indebt]

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

[indebt]

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.

[kl030505]

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.

[indebt]

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??

[chpxiii]

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.

[indebt]

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!

[ameliabedilia]

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.

[woeisme]

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.

[B12]

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.

[indebt]

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