Six Figure Credit Card Debt

[disneysteve]

You know what, sending people to prison for not paying your bills, racking up huge debt in hundred of thousands of dollars is a great idea. Not a bad idea at all.

I think an even better idea is to not allow people to get into that situation in the first place. Have reasonable limits on the amount of debt extended to people based on their income. My wife and I have 100K in credit on our credit cards which is nuts. We're responsible and rarely charge over 4K or so in a month but it would be really easy to go nuts and get buried with debt.

Same with mortgages. There's someone on another thread whose house is costing 42% of income which is ridiculous. She never should have been approved for that loan. Now she's struggling, obviously.

[corns]

Some details:

1. I don't own my home. I'm living with my folks. They own this home. So, there's no question about borrowing from "my home" because I don't own it.

2. My investment property,... monthly payment is 1,100. There's no rent coming in. I've put up for sale for more than 3 months. No offer from buyer. I've also dropped the rent, but also no takers.

3. How did I get into this debt? In short, I lost control of myself speculating forex. More info can be found in my blog. Debtlessness

4. About emergency savings, I don't have. I don't even have enough to pay the monthly minimum payment toward my credit cards.

5. I'm not thinking about bankruptcy at the moment. If I'm a bankrupt, it'll be near impossible for me to get credit in the future, even after I've been discharged from bankruptcy.

6. I co-own several investment properties with my friends and family. Most are underwater. There's one property I'm refinancing to get 90k equity out.

7. My target is to clear all my credit card debt within 3 years.

..

..

..

..

..

..

..

..

[tripods68]

Some details:

3. How did I get into this debt? In short, I lost control of myself speculating forex. More info can be found in my blog. Debtlessness

That's explains it.

5. I'm not thinking about bankruptcy at the moment. If I'm a bankrupt, it'll be near impossible for me to get credit in the future, even after I've been discharged from bankruptcy.

You are completely BROKE. The last thing you need is someone giving you another credit. Even if you pay off your debt in 3 years, you will turn right back into debt We've seen this happen before; You got some serious problem (behavior therapy) for someone that lives at home with no accountability.

[FLA]

losing that much money by speculating in Forex sounds akin to a gambling problem, IMHO.

I would feel out of control with that much debt and would seek counseling for how to handle it and counseling for the behavior that got you into this mess to begin with.

[pflyers85]

Tripods and FLA are right on the money. Your first order of business should be attacking your compulsive behavior by getting professional help. The debt you have accumulated is not the disease, its merely a symptom.

You say your goal is to clear your CC debt within 3 years? By doing what? Engaging in the same speculation strategy that got you in so much debt to begin with but this time hoping that it works out?

[Randomsaver]

How about paying it off in 8 years? Bigger amounts take more time to pay off but it can be done. Plus, if you put more years into paying it, you don't kill yourself trying to make ends meet.

I'd sell a house first though like you said and proceeds to reduce debt.

[bjl584]

You need to seek out some help to stop the behavior that got you into this mess. Then unfortunately you'll probably have to file bankruptcy. I don't see you paying this back.

[Randomsaver]

Nice progress corns. You sold a property cash. From MD250K, you brought it down to MD225K! I'm rooting for you!

To me by realizing mistakes made in the past and having a blog of resolve to pay out your debt means you are on way to debtlessness.

It will take time because you are dealing with a big amount but here in US, we deal with big amounts for 30 years. Yours won't take as long but just be patient.

[dczech09]

Declaring a bankruptcy isn't the worst thing ever...

Whenever you apply for a job, the applications asks if you have EVER filed for bankruptcy. You have to say "yes."

Whenever you apply to rent, the application asks if you have EVER filed for bankruptcy. You have to say "yes."

Technically, businesses and landlords cannot discriminate based on a bankruptcy alone. However, we all know they get around this by saying "some one else was more qualified."

Life is not impossible after you have filed for bankruptcy, but there certainly are obstacles. It is not as simple as "a fresh start."

Do you know who markets bankruptcy as a "fresh start"? Bankruptcy attorneys.

[Butterscotch]

[QUOTE=dczech09;424145]Whenever you apply for a job, the applications asks if you have EVER filed for bankruptcy. You have to say "yes."

I don't think I have ever seen this question on a job application. I do know that in some states it is legal to do a credit check on prospective employees, but I have never seen that question point blank out there on an application.

[Nutria]

I think an even better idea is to not allow people to get into that situation in the first place. Have reasonable limits on the amount of debt extended to people based on their income.

The methods for such enforcement would lead to an even more intrusive state than already exists.

[corns]

Update: I have finally paid off all my credit card debt. Feel relieved.
Couldn't have done it any other way without selling of the property.

[Nutria]

Update: I have finally paid off all my credit card debt. Feel relieved.

Now lets work to not get in that situation again!!

[LivingAlmostLarge]

Wow congratulatiosn! Like seeing updates like that

[sv2007]

I have racked up almost 250k in credit card debt. The debt is spread out across 11 credit cards. My monthly take home salary is 6k. I have used up all my savings. I have no more savings. Is there any hope for me?

I'm about to receive 90k of cash from a refinance of my property. I will use this to pay down my credit card debt.

I have a rental property. My tenant moved out 2 months ago, and I am still servicing mortgage. The monthly mortgage payment is painful.

I have already sold any mutual fund that I can sell.

What would you do if you're in my situation?

With $250k, and giving the above, it's worth talking to a in-person debt counselor/specialist. That'd be the course of action I'd take.

Now, just for fun.. I know, it isn't too much fun for you right now. so.. let's say just for the heck of it.

$250 - 90 = 160 @ 14%APR = 24k/yr interest, so this is the real minimum amount you must pay each year to prevent interest compounding. @ your take home $6k = $72k/yr, is it doable for you to live on $72-24 = $50k/year ?

There's my back of the envelope calc for you.