What to do with credit card debt?

**sjenkins** · 03-31-2009, 08:13 PM

Pay of your credit cards first.... pay at LEAST the minum on all cards to keep yout credit score afloat!

**boosami** · 04-01-2009, 06:05 AM

Canada and USA do not share credit history information. Your American credit cards will not show up on your Canadian report and vice versa. Depending on current Canadian laws, though, bankrupcy and other serious derratory marks from other countries may be allowed to be "domesticated" to Canada.

**cptacek** · 04-01-2009, 10:43 AM

Originally posted by cruzmisl View Post

I used to work in the US 5 years ago and I accumulated $29K of CC debt.

You borrowed $29K, you need to pay it back. Maybe a settlement would be the best if the cc companies will agree to that, but don't just not pay it.

**arthurb999** · 04-01-2009, 10:47 AM

The cc companies will have to wait... pay your mtg, food, utilities 1st. Not sure how international credit works....

**ksluis62** · 04-01-2009, 12:16 PM

If you just walk away, this might be something that comes back to haunt you some day. In the US, when you apply for a mortgage, you are asked a number of standard disclosure questions, including:

Are you presently delinquent or in default on any
Federal debt or any other loan, mortgage,
financial obligation, bond, or loan guarantee?

I don't know if you have similar requirements in Canada, or if you will ever need a mortgage in the future. But you'd have to reconcile your answer somehow with what you decide to do with the debt. If it were me, I'd talk to the CC companies, let them know of the job loss, and ask for reduced minimums for a while. Once the wife is working again, it seems you have the resources to pay off this debt, which is the right thing to do anyway.

**cruzmisl** · 04-01-2009, 01:53 PM

Thanks for the advice. I don't want to be a deadbeat. Sure, I could just "disappear" but thats not right. I agree, I don't think the credit reports are interchangeable though. The chance of applying for a mortgage in the US is slim to none. I do have a mortgage in Canada though.

Can I negotiate with the CC companies myself or should I hire a company or a lawyer and if yes any suggestions? I'd just like to get rid of it and forget about it. Is there a standard "buyout" percentage I should aim for?

**maat55** · 04-01-2009, 02:09 PM

Originally posted by cruzmisl View Post

Thanks for the advice. I don't want to be a deadbeat. Sure, I could just "disappear" but thats not right. I agree, I don't think the credit reports are interchangeable though.

Can I negotiate with the CC companies myself or should I hire a company or a lawyer and if yes any suggestions? I'd just like to get rid of it and forget about it. Is there a standard "buyout" percentage I should aim for?

If you are chosing to let them go, just start saving money to settle later. I would shoot for 40 to 50 cents on the dollar. The longer you wait, the less you may pay, but it will affect your credit longer as well.

**cruzmisl** · 04-01-2009, 04:13 PM

Do I continue to pay minimums or do I need to be deliquent before they'll talk?

**ukey** · 04-05-2009, 08:47 AM

Is there any way you could make minimum payments, and still not go under? If not, and you are still planning to clear your debts, call up the bank's credit assistance hotline, and negotiate with them on your wish to clear the debt, but that you need their assistance. It will probably help.

**cruzmisl** · 04-08-2009, 06:21 AM

I'm not sure if I'll be able to make the minimums. I really doubt I can make it fly, its just too much money.

**watsoninc** · 04-08-2009, 08:40 AM

Originally posted by cruzmisl View Post

Do I continue to pay minimums or do I need to be deliquent before they'll talk?

Generally, if you are current, credit card companies do not want to deal. They really have no incentive. They want to deal once they believe that they are not going to get paid the full amount. Currently, they have no reason to accept a lower than agreed upon amount because you are current.

Personally, I would continue paying minimums and begin to pay off the smallest debt, then the next smallest, and then the next smallest. Each time something is paid off, I would apply the money that I was paying on that card that was just paid off to the next CC until I am done. This is the standard debt snow-ball. This is how I became debt free a year ago!

If I didn't have enough to pay the minimums and markedly cut my budget to bare bones, I would do something to get my income up...even if it meant getting a crappy part-time job. Until you get some additional income and/or cut lifestyle, it doesn't sound like there's much else you can do. Good luck.

**ksluis62** · 04-09-2009, 08:39 AM

I believe watsoninc is correct, that if you continue paying minimums, the CC companies don't have an incentive to settle. I've seem Maat55 explain this on another forum. What the debt settlement companies do is collect monthly payments from you (as much as you can afford, hopefully matching minimums), but they stop paying the CC companies. Thus you start getting behind and accruing late fees. But now the CC companies start getting nervous and have some incentive to settle.

So, you can take Maat55's advice and stop paying the CC companies, but instead place that money in your own account to build settlement reserves. Then in a few months you'll have more cash reserves, and the CC guys will have an incentive. You'll want to try to negotiate away the late fees in the settlement, but at that point you're talking lump sums anyway. Of course, as Maat points out, the longer you have to go, the more damage to your US credit score, and the longer it will take to recover (your US credit score, anyway).

What to do with credit card debt?