[Debt] Strong Advise needed ....

This thread is depressing...

 

makes me feel better about my 1500 CC debt....that amount makes me feel uncomfortable. I cant imagine some of the amounts im hearing.

 

In my case, it was medical necessity and though I was working more than one job, I didn't have health insurance. My only option was to charge it. I did. I spent more than I had, and more than I was making, but I'm alive and in good health.

A Huge chunk of what people owe after a certain amount of time in debt has nothing to do with what they've spent, but with ridiculous fees, penalties and whatever. So for at least part of that I will blame the credit card companies.

 

Somewhat related: we had to take someone to small claims court. You have to wait in the courtroom until your case is called up, so you end up watching all these cases ahead of you in line. The majority of them were either credit card companies or other businesses who could not collect on their money.

It was interesting to watch. For each case you hear the actual amount owed, the interest on the money, court costs and lawyers fees. For example one person probably owed $800, but kept avoiding payment. She was sued and pled guilty (as does almost everyone that shows up to these things) and her total bill came up to $1800. Imagine if she would've just made some attempt at paying it off to start with she wouldn't be out an extra $1000. But some people live their lives believing credit is a right, not a privilege or responsibility.

 

i understand. Sometimes crap happens and you have to take on debt. I was referencing the people who just buy junk because they want it.

 

"I don't have the money, but you like stock options? I have tons of it..."

"Ahhhh, my other leg!"

 

When people are introduced to new things they usually receive some type of education otherwise it's known as throwing them to the wolves. Universities have freshman orientation and seminar to teach students the rigors of college, jobs train their new employees, when you buys a new car or electronics they show you the features and how they work. This applies to credit cards. A lot of credit cards users are new to the credit game. Many new users are under 20, have no knowledge of how to budget or manage money, and no idea of actually how to use the cards in a smart way (if there is such a thing). They have no idea what interests rates are, how they can vary, and the manipulative things credit cards can do to them.

Yet, credit cards can do all types of things once they have locked in a consumer. Raise interest rates, negative credit reporting, etc. are all done by these companies. They even do things like two-cycle billing, like if you had a $1500 account that was full and you paid $1000 that month the credit card company will charge you interest on the $1000 you paid plus the $500 still on the account. The insane amount they charge for getting cash from the card instead just purchasing something, then if you pay one bill late on one credit card other credit cards you have, even if you have made every payment on time, can be jacked up, enormous late/overlimit fees, etc. These are all things credit card companies do and get away with.

Don't get me wrong, I am not putting the blame solely on credit card issuing banks and companies but they do deserve some of it and it is foolish to think otherwise. Like I said, educate the consumer and don't send them everything in small print that 90% of people don't read anyway.

 

Hehe, I just got my first credit card, and if I ever end up in this type of situation, I'm gona...gona...beat myself.

 

Unless you had some serious medical condition, or if you were paying for some top notch grad school this video might apply to you.

Also rent the movie/documentary "Maxed Out." Its a new release, and is a really good documentary on Americans, credit debt and collectors. Its well made. Actually since you are in debt, don't rent it, just download it from the torrents.

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Damn, I don't know what to say - I have no experience with this stuff so I can't tell you what to do. I hope you get your act together and hopefully you're young enough to recover. Good luck.

 

I don't think the original poster needs a lecture. I'm sure he knows it's his fault and just looking for advice on getting out.

My friend owed 50 grand in gambling debts and declared bankruptcy before the new law went into effect. It's working out ok for him because he's buying everything under his wife's or parent's name. I say, if you can do that, go for it and declare bankruptcy. It's not the ethical choice, but the practical one. Seven years isn't too long and you're not going to do much with a 50grand (most probably accrued under interest anyways) against your credit.

 

A home loan doesn't fix your problems. It just slows the bleeding until you cut yourself some more.

Your problems is your spending habits.

How old are you, What's your salary, and Where are you spending your money?

 

I do...

My sis just went through a divorce, so my folks attorney has been on it.

According to Texas Law, you can lose any debt up to a certain amount after four years. (hers was only 5 grand, so I'm not sure about the 50.)

Bancruptcy should never be an option unless you plan on being:

A: An ingenueic inventor

B: A moron

Either way, filing bancruptcy with no new course of action, other than being a r****d for a few years, is always a bad idea.

Take it from me. While I never filed for bancruptcy, I let my ex's debts fester after the divorce. They screwed my credit up. I'm just now getting back on their good side.

BUT, I also learnrd how to allocate my earnings. Best advice I can give: Quit buying **** on a voucher that you expect, but may, never earn.

Credit cards are simply bad news../.. And they know it.

 

You don't need to use the cc to spend money. You need to know where you are spending your money?

Itemise your monthly spending.

Mortgage, car, food, entertainment, etc... All of it.

$779.31 is your monthly payoff for 50K in 7 years if you interest rates stays at 8% which it won't. It will get higher.

List all your assets and what they are worth.

Is your 40K from 1 full time job?

 

get a second job, that way you will earn extra income, and have less time to spend money

 

I am a consumer bankruptcy attorney. I see a bit of misinformation in this thread. To clarify:

1. Once you default on a payment to the credit card companies, the interest rate will skyrocket. See your card agreement to see how high. Your $50k will become much larger very quickly.

2. At some point (probably 3 and a half years after the default) they will file a lawsuit. They will be entitled to a judgment. A judgment remains on your credit for 10 years after the date it is signed by the judge. They can renew that judgment every 10 years, so it stays on your credit like a diamond in your stomach.

3. If they get a judgment, they can try to put a lien on your house that would have to be paid at closing if you sell the house. In Texas, these liens don't attach to homestead property, but you'll have to file a motion in the court that issued the judgment to release it.

4. I have seen many people who took out a home equity loan to pay their credit cards, and then wound up in foreclosure. This is a monumentally bad idea for most people.

5. I have negotiated with credit card companies for clients. What I have found is that there is always a couple of them that will not work out a deal. This approach seldom works, especially with 12 creditors.

6. A bankruptcy stays on your credit for 10 years and then it is gone. You keep your house, car, and home furnishings. The vast majority of people in Texas have no non-exempt property.

7. My former clients tell me that they never received more pre-approved credit card offers than they did right after their discharge. This provides a way to rebuild your credit...carefully.

This is the most ignorant thing I have read in a long time. Does this come from your years of experience with the system and what happens post-discharge? I think the answer is no. If you have no experience with what happens after a bk, then you should probably not opine on the subject.

Either way...good luck on your problem. If you go with a debt consolidation program...be careful. I have clients who had a negative experience with them.