Need advice 40k in debt...

[jpg7n16]

Actually he said he made all the cuts he is willing to...

Spot on assessment

it's like going to the doctor and saying: "Doc, I need some advice. I want to stop coughing, but I won't give up my cigarettes."

Doc: "Well I can give you a cough suppressant, but you'll likely start coughing again if you don't quit smoking. Plus if you quit smoking, you'd stop coughing a lot faster than with just the medicine alone - which may not even work. Smoking has all sorts of other bad effects on your health."

"The cigarrettes aren't my problem doc, the coughing is. I just want it gone"

Doc: "If you weren't smoking, your cough would already be gone."


It's much easier to see when someone is addicted to cigarettes as opposed to being addicted to a house they can't really afford.

If the OP didn't have this house, his debt would already be gone. It should have only taken 3-4 years, but instead - he's still got the same debt after 10 years.

[ceejay74]

OP is asking if the consolidation companies will negotiate for him to pay a lower amount than what he actually owes. As far as I know, all they do (if they're even legit) is make it so you pay them one lump sum, which they then distribute to the debtors. You still have to pay the full amount of what you owe, correct? And that's assuming the consolidation company doesn't just keep all your money, which is what the dishonest ones do.

Oh and I agree--you have the means to dig yourself out much more quickly than you're doing! Try and find lower-fixed-rate balance transfers. Take out an unsecured personal loan (I did w/Cap One and it was 8.99% fixed interest and a fixed 5-year payoff, so I knew I wouldn't stretch the payoff out to 20+ years if I just paid the minimum.) Cut out more niceties than you have already. I understand if you don't want to sell your house and move, but you should be able to do other things to speed up your debt repayment.

And this is coming from someone who accumulated debt from age 23 to age 32 ... sure it would be handy to weasel my way out of the debt, but debt forgiveness is for the very desperate. I know I can pay off my debt and still come out on top--I have the earning power to do it. So can you. So should you. I sympathize with being young & naive and making money mistakes, but I don't agree with trying to get out of facing the music! This is how we learn from such childish mistakes--own up to them and then overcome them.

[disneysteve]

I currently have about 40-45k in credit card debt.

I am not willing to sell my home

My monthly income is 4,600.
Mortgage payment is 2400

i have already cut back on any things that i was willing to get rid of.

You CAN NOT afford your home. Whether or not you are willing to sell it is irrelevant.

It is nice that you've cut back on the things you were "willing" to get rid of. Now it is time to cut back on the things you HAVE TO get rid of. If you don't do that, you are on a sinking ship with no lifeboat in sight.

[minnie1928]

So if there is a way that i can legally lower my debts

Get a second job.

You say you work in the finance industry, so did I. You should be VERY worried about your credit score. My employer randomly pulled credit reports on its' current employees. Do you really want to risk your job? Suck it up, make the tough decisions...sell the house, get a second job, cut ALL non-essential expenses...not just the ones you are willing to cut.

You ask why should you pay the $45k if you don't have to...the reason is because you agreed to pay it when you applied for the credit. It's your responsibility, so pay it.

[nmboone]

I know I'm not really helping OP here, but one thing I'm considering is that he says he doesn't foresee himself needing credit for the next 10 years. That to me is awfully myopic. I could maybe see if someone said the next 2 or 3 years but 10 years is a long time!

[KellyJef]

Go see a credit counselor if you must. It will cost you money because you earn more than most of their limits. Check out these federal websites:

Fiscal Fitness: Choosing a Credit Counselor
U.S. Department of Housing and Urban Development (HUD)

But still you should know that you sound very spoiled. You're total credit card debt is 72% of your yearly income and your house is way too expensive. Still you refuse to make a change that would help you live within your means. It doesn't sound like you are "going through a tough time". Instead it sounds like you are continuing the mistakes you started to make at 18 years old! And now you want other people to forgive you for it!

Sorry everyone. This guy is just incredibly frustrating to me.

I think he is incredibly frustrating to a lot of people.

I have absolutely NO use for people who CHOOSE not to pay legitimate debts that they have encountered

I pay my debts: he should pay his. Period.

He said he doesn't care about the moral issues -- he merely wants advice on how to get away with not paying his debts.

[FHA Loan]

I would never intentionally damage my credit just to get out from under a $40-45K debt when thus far you've been able to keep up. I'm guessing the credit card debt is spread over multiple cards.

If you have multiple credit card balances (and assuming the interest rates on all of them are relatively the same) then I would suggest paying the minimum payment on them all EXCEPT the one with the smallest balance. Pay as much as you can on the card with the smallest balance. This will get rid of one of you payments as fast as possible. Then once that card has been payed off, begin paying as much as possible on the remaining card with the lowest balance... Repeat and rinse until they are all paid off.

You may "think" you want to screw up your credit for 5-7 years just to get out from under that debt, but I would recommend against it. Your credit rating is one of the most valuable assets you can have. Many employers now days require a good credit rating JUST to get hired. What if you were to get laid off next week? Your credit could mean the difference between you being able to get another job or remain in the unemployment lines.

My monthly income is 4,600.
Mortgage payment is 2400

I certainly hope the monthly income you stated is net (AFTER taxes) and not gross (BEFORE taxes). Generally speaking your house payment (principal, interest, insurance, and taxes together) should be roughly 29-35% of your total gross monthly income (BEFORE taxes).