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  • #31
    Originally posted by maat55 View Post
    I would keep making the house payment and do Obama's plan if possible.

    If you are not able to stay current on all your cards, I would not pay them at all and save as much money as you can to make short offer payoffs. I would start with the smallest card first and offer 30% to 50% payoffs. It will take a few months of not making payments before they will settle.

    This will hurt your credit of course, but you will be able to settle for less. I would not use a consolidation company.

    You will need to get on a tight budget and concentrate on saving money for the payoff offers to settle as quickly as possible.

    This build up of cash may come in handy if you loose your job, unexpectedly.
    We really don't know how "tight" things are for OP until they post a budget, but their response to that request was "not enough time"... my thought is they are looking for a quick fix or validation for a decision already made.

    I agree with maat on his comments above.

    Comment


    • #32
      Originally posted by jIM_Ohio View Post
      We really don't know how "tight" things are for OP until they post a budget, but their response to that request was "not enough time"... my thought is they are looking for a quick fix or validation for a decision already made.

      I agree with maat on his comments above.

      Quick fix would be good, but doesn't mean we aren't in it for the long haul and willing to make sacrifices to get out of this mess. No decision made yet, just trying to get as many options and opinons as I can.

      Obama plan not in the cards, our loan not Freddi/Fannie. As for the cards and not paying, it may come to that. We'll hoard the cash and offer payoffs.

      My next question to anyone who's done something similar is this....
      If we do that with our cards, and eventually pay them off with settlements, how bad will our credit get? I can take a 5 year hit, if I know we'll be debt free or very close to it at that point, and build credit up again.

      Comment


      • #33
        I don't know exactly about the credit hit, but I just put a link on my blog about the tax implications of settling debt. Here's the link.
        My other blog is Your Organized Friend.

        Comment


        • #34
          Can you rent basement or bedroom or house 'share' since rents are so high in your area? What other options do you have to generate more cash? I know it bites 'family time' but can you and wife take PT jobs to generate more income? I'm quite sure your state has gov't operated 'Orderly Payment of Debt' program. the private ones are often scams.

          Comment


          • #35
            it's a catch 22 situation.
            if you miss your mortgage payments, your credit score will take a hit, if you miss your card payments, your credit score will take a hit.

            frankly,refinance your house to FIXED RATE FIRST 30/25yr ASAP. DO IT NOW. If they won't do it, don't make a single payment, start saving your money cuz you may need to get an apartment or rent a house. If they do change your loan terms from interest only to fixed rate, then mortgage first, credit card after.

            Comment


            • #36
              how much do you owe approximately on loans other than your house? $10k? $30k? $50k?
              if you put things in perspective you will get better advice from everyone here.
              for instance, if you make interest payments on your house for the time being, and start drastically reducing your living expenses and paying off your debt, you will be closer to working things out so you can live normally again. cut everything, and work hard, and there will be light at the end of the tunnel. dont whinge about not having things you want, because its possibly what got you there in the first place.
              cable? bah. do you REALLY need that?
              what other subscriptions do you have? what other expenses do you have that are REALLY not necessary to live? if you drop $50 a month, that's another $50 toward living normally again. be honest with yourselves because its the onyl way you're going to get out of this mess.

              Comment


              • #37
                Originally posted by Alice in Chains View Post
                Quick fix would be good, but doesn't mean we aren't in it for the long haul and willing to make sacrifices to get out of this mess. No decision made yet, just trying to get as many options and opinons as I can.

                Obama plan not in the cards, our loan not Freddi/Fannie. As for the cards and not paying, it may come to that. We'll hoard the cash and offer payoffs.

                My next question to anyone who's done something similar is this....
                If we do that with our cards, and eventually pay them off with settlements, how bad will our credit get? I can take a 5 year hit, if I know we'll be debt free or very close to it at that point, and build credit up again.
                You will get more options if you post a budget and see where your money is going.

                I could take a 30% drop in pay and not see spending drop a dime (because close to 30% goes into IRAs and 401ks). You need to see your budget and expenses because not seeing the budget and expenses is part of what created this problem to begin with.

                Post a budget. Track your expenses.

                Comment


                • #38
                  Originally posted by Alice in Chains View Post
                  Combined, we make about 130k a year. (we were at closer to 150 before the paycut.) Mortgage about 3800 a month, that includes taxes.
                  We probably have about 70k in other debt. Credit card debts are all high interest at this point. Couple major cards over 10k, others are smaller.
                  Two car loans are managable, both under 15k. We live in CA, and our expenses are high, no doubt. Again, I realize we were reckless, but the failed business didn't help matters either.
                  Debt other than mortgage...is over $70K, which includes two vehicles.

                  Another question: How much would you say that you have per month to put towards debt above the mortgage and car payments? Is it $100, or $1000. Give us a ballpark. Of course, as others have said, the more detailed you get the better our answers to you will be.
                  My other blog is Your Organized Friend.

                  Comment


                  • #39
                    Originally posted by Alice in Chains View Post
                    Quick fix would be good, but doesn't mean we aren't in it for the long haul and willing to make sacrifices to get out of this mess. No decision made yet, just trying to get as many options and opinons as I can.

                    Obama plan not in the cards, our loan not Freddi/Fannie. As for the cards and not paying, it may come to that. We'll hoard the cash and offer payoffs.

                    My next question to anyone who's done something similar is this....
                    If we do that with our cards, and eventually pay them off with settlements, how bad will our credit get? I can take a 5 year hit, if I know we'll be debt free or very close to it at that point, and build credit up again.
                    Honestly, if I wanted to know the answer to this question, I would post it at this site.

                    CardRatings.com • Index page

                    Comment


                    • #40
                      Originally posted by creditcardfree View Post

                      Originally Posted by Alice in Chains
                      Combined, we make about 130k a year. (we were at closer to 150 before the paycut.) Mortgage about 3800 a month, that includes taxes.
                      We probably have about 70k in other debt. Credit card debts are all high interest at this point. Couple major cards over 10k, others are smaller.
                      Two car loans are managable, both under 15k. We live in CA, and our expenses are high, no doubt. Again, I realize we were reckless, but the failed business didn't help matters either.

                      Debt other than mortgage...is over $70K, which includes two vehicles.

                      Another question: How much would you say that you have per month to put towards debt above the mortgage and car payments? Is it $100, or $1000. Give us a ballpark. Of course, as others have said, the more detailed you get the better our answers to you will be.

                      If $130k income, they should have approx 7-8k (maybe more depending on how many deductibles they claim) per month to work with.

                      But there's current expenses: groceries, utilities, gasoline, in addition to their past debts, mortgage and the autos.

                      It sounds as if they want the other companies to lessen their debts, and not really look for ways to cut their own expenses.

                      Without a budget, we cannot really help. It sounds like they have no idea really how much they spend on a month-to-month basis. Unfortunately until they get a handle on that, they cannot really change anything for themselves.

                      Comment


                      • #41
                        sorry i did not realise you had posted your debt balance until creditcardfree posted it. but still another question i have is, what is the total of your minimum repayments? i agree with seeker though, it does sound like you may not have a clue what you are spending daily. i am sorry to sound rude or harsh, but your reluctance to post any details sort of shows that you don't want any suggestions to do with cutting expenses, only that you are looking for an easy way out. and in that case, you have sort of come to the wrong site :S

                        Comment


                        • #42
                          I don't take any response as rude, but appreciate the thought. It's an internet site. If someone says something about my family to my face, that's a different story. Here? Fire away.

                          You guys are right, we probably do not have a good handle on what we spend.

                          Short version?

                          3800 for mortgage.
                          500 in utilities. (electricity here is nuts) That includes trash, gas, water etc.
                          600 daycare.
                          600 groceries
                          600 car payments
                          200 insurance, (that's probably low, car, mortgage)
                          100 term insurance for both.

                          That's off top of my head. I'm certain we pay close to 2 grand a month in credit cards.

                          No entertainment at this point, etc. As you can see, we're pretty strapped, and I'm sure I've missed some things.

                          I realize we need to get a budget in place. Great for those that could take a 30% paycut and be okay, but that's part of our troubles. 6 months ago, before the credit crunch, we were making payments okay. Now, most of those have doubled. Were we living on the edge beforehand? Yes. Stupid? Yes. I get it guys, I do. We need to change, and now.

                          I'm not looking for the easy way out, just what's the smartest course of action. If it means keeping current on the house and letting the cards go until we setlle them, and our credit is dinged for a few years, then that's what we'll do.

                          Everyone fire away at will, I can take it. But... don't tell me I'm not understanding the situation, I am NOW. It took years, but now I do. Call this the bottom, and now I wanna climb back up.

                          Comment


                          • #43
                            Originally posted by Alice in Chains View Post
                            I don't take any response as rude, but appreciate the thought. It's an internet site. If someone says something about my family to my face, that's a different story. Here? Fire away.

                            You guys are right, we probably do not have a good handle on what we spend.

                            Short version?

                            3800 for mortgage.
                            500 in utilities. (electricity here is nuts) That includes trash, gas, water etc.
                            600 daycare.
                            600 groceries
                            600 car payments
                            200 insurance, (that's probably low, car, mortgage)
                            100 term insurance for both.

                            That's off top of my head. I'm certain we pay close to 2 grand a month in credit cards.

                            No entertainment at this point, etc. As you can see, we're pretty strapped, and I'm sure I've missed some things.

                            I realize we need to get a budget in place. Great for those that could take a 30% paycut and be okay, but that's part of our troubles. 6 months ago, before the credit crunch, we were making payments okay. Now, most of those have doubled. Were we living on the edge beforehand? Yes. Stupid? Yes. I get it guys, I do. We need to change, and now.

                            I'm not looking for the easy way out, just what's the smartest course of action. If it means keeping current on the house and letting the cards go until we setlle them, and our credit is dinged for a few years, then that's what we'll do.

                            Everyone fire away at will, I can take it. But... don't tell me I'm not understanding the situation, I am NOW. It took years, but now I do. Call this the bottom, and now I wanna climb back up.
                            The number one problem I see is Orange County. I know that you have both water issues and power issues down there.

                            For years I worked in Aliso Viejo, Mission Viejo, Newport Beach and even Irvine area, and I commuted daily from an LA county suburb for many many years. You cannot rent a studio apartment there for less than $1,200 per month. I would have loved to be able to live and work in the same area, but absolutely knew that I could never do it; not with what I was making back in those days... and not single as I was then. So I drove... and lived not so near.

                            I don't know what part of OC you are in, but there are nice places to live all over this state. You don't have to come as far North as LA County. You can probably go South and find some very nice areas in San Diego. Even inland Corona and SB has nice housing and the communities were growing there (not sure if they still are).

                            The problem with staying in OC is that it is hugely expensive to live there. That's not going to change is it?

                            What happens if you lose your job entirely? Has business improved since everyone's wages were cut? How's your wife's career doing? These answers should have impact to you too. They will impact your budget and throw curves into your budget.

                            Track your money, track every penny for one month. Track your income and outgo. Grip the realities and make the calculations. Assuming you both keep your jobs, how long will it really take you to clear the current debts? Use real numbers abd calculate it out.

                            ---

                            Incidentally, DH & I pay maybe $200/month for all utilities, 90 for electricity every two months (but we use a lot of power being both IT people with a bunch of computers and equipment mostly on 24x7). Those utilities include our two cell phones, house phone, DSL, power, and gas. That's less than half of your utilities -- which I included phones -- not sure if you did. But not all of Southern Calif is quite as bad as OC utils.
                            Last edited by Seeker; 03-11-2009, 12:58 AM.

                            Comment


                            • #44
                              The bottom line is you make 130k combined and have a 570k interest only mortgage and a ton of other debt.
                              YOU CAN’T AFFORD IT!!!

                              What is going to happen IF they let you refi into a 30 year fixed… your mortgage (incl taxes/ins) payment will go up from 3500 to about 4100. They might not let you with crappy credit, negative equity and a high debt to income ratio.

                              Say you could rent for 2000 a month… you’d save 2100 in payment there and have less in utilities. That’s over 2000 to plow into the debt. The cc’s and cars would be gone in less than 3 years.
                              Then you start saving for a down payment and get a house you can afford putting 20% down and getting a standard FIXED mortgage.

                              Of course you don’t want to sell the house, but guess what… you cant afford it.

                              Stop waiting for a government handout, man up and handle the problem you created yourself.

                              Comment


                              • #45
                                Let us know what options Chase has for you. Ask them lots of questions. You are not obligated to do anything until you sign!

                                I know you don't want to sell, but how long would it take to sell in the market you are in?
                                My other blog is Your Organized Friend.

                                Comment

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