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Need advice please on credit card debt

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Christine88
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Need advice please on credit card debt  Reply with quote  

Hello everyone. I'm new to this forum and unfortunately the circumstances which brought me here are not good. I have a lot of credit card debt and a car loan and it has gotten to the point where I can't pay all of it. It's my own fault. I spent my way into a hole. Anyway I need advice on how to proceed. Should I try to keep as many creditors as I can current and let the others slide or just stop paying all of them and save the money to put down toward one debt at a time until each is paid off? Or should I just plan filing bankruptcy. Bear in mind I am probably $30.000 in debt. Please advise.
Post Sun Feb 10, 2013 11:04 pm
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oldguy
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Details pls. Are you working and do you have a good income stream? (Engineer, that could be good?)
Is the car near-new? How much is the note, how many more yrs?

It depends - for a $100k/yr engineer single apt dweller, $30,000 is not a big deal, just a bump in the road. But for a $25/yr retail-worker married with a house and 3 little kids - $30,000 is insurmountable.
Post Mon Feb 11, 2013 12:02 am
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Christine88
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quote:
Originally posted by oldguy
Details pls. Are you working and do you have a good income stream? (Engineer, that could be good?)
Is the car near-new? How much is the note, how many more yrs?

It depends - for a $100k/yr engineer single apt dweller, $30,000 is not a big deal, just a bump in the road. But for a $25/yr retail-worker married with a house and 3 little kids - $30,000 is insurmountable.


Oh sorry I forgot the details. Yes I'm working but I'm an entry level Engineer with a 2 year degree not a BS 4 year degree so my income is only about $54,000 a year. The car is new so I'm upside down on it. I have an older car that is in good shape and I have thought about letting the new car go back and drive my older one. It's a Toyota so it's is a real good car and payed for. Oh I forgot. My car note is $270 a month for 7 years. Yes I know 7 years wow!
Post Mon Feb 11, 2013 1:56 am
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oldguy
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quote:
I have an older car that is in good shape and I have thought about letting the new car go back and drive my older one. It's a Toyota so it's is a real good car and payed for. Oh I forgot. My car note is $270 a month for 7 years. Yes I know 7 years wow!


Yes, you have definitely ID'd the problem. (And it's a common one, people seem to overbuy cars - they are the root causee of many financial problems).

But you have a good job, and a good income. The extra car is about half of your debt - so fix that, repay the other loans.

Don't let the car be re-possessed, that will trash your credit. Sell the car, that gets that $3240/yr car payment stopped. Then use your $3240/yr to clear the other loans, probably about $15,000. Advertise the car, find a buyer. Then you and your buyer have a meeting with your lender. Your buyer pays the lender and receives the title and the car. Your lender will give you a personal loan for the short-fall, probably $3000 or $4000.

For the first year pay the minimums on your cards, and use your $3240 to clear the personal loan. Then add the extra $3240/yr toward the cards - should take less than 4 years.

BTW, you've probably read that most millionaires drive older cars, now you see why. (I drive a 2001 pickup w/over 100,000 miles - and I consider it to be at half-life).
Post Mon Feb 11, 2013 2:39 am
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coaster
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Sorry, but it just struck me there's a really great old movie about an old car ... called ... Christine

~Tim~
Post Mon Feb 11, 2013 8:23 am
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Publius
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I agree with oldguy, you aren't bankrupt. The $30,000 is a scary big number right now, but you have a good income and likely potential for your income to grow over time. Recognizing that there is a problem and deciding to do something about it is the most crucial step.

Get your financial life written out in a budget to see where your money is going (too much of it is going to that car and you will have some breathing room if you take oldguy's advice). Then make a few cuts and dig yourself out of this. When you look back in a couple of years, you will be very glad that you don't have a bankruptcy hanging over your head.

This is manageable, just make a plan and get to it. Good luck.
Post Mon Feb 11, 2013 6:17 pm
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littleroc02us
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I also agree with the above posters, 30k isn't a big enough problem to claim bankruptcy over. Plus for the rest of your life you'll have to answer yes to the question "have you ever file bankruptcy", it's a huge red mark on your record. Don't give up so easy.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Feb 11, 2013 9:40 pm
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Sabu72
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oldguy gave you some great advice - you need to find a buyer for your car and get that payment off your back. Allowing them to repo it will trash your credit, and right now you should try to salvage what you can of your credit score.

I think another problem that you have is too many creditors -- are we talking about numerous credit cards or other types of debt?? If it is credit cards, I would try to consolidate them as best as you can - you will never get anywhere if you are making 10 minimum payments to 10 different cards every month, and the total of all those minimums is maxing out your income each month.

Don't lose hope, it can be done. About 10 years ago, my husband and I had $18,000 in credit cards, two car loans and a mortgage - then he was laid off for several months....and neither of us have a college degree, so we're talking blue-collar jobs here! Today we have zero credit card debt, one car payment (almost paid off), 2 other paid-off cars and refinanced our 20 year mortgage into a 10 year just last year - and both of us have credit scores above 800. Take it one step at a time, protect your credit score at all costs, and put yourself on a strict monthy budget to live by. Yes, you will have to make sacrifices, but it will be worth it in the long run....you'd be amazed how good debt-free feels!
Post Tue Feb 12, 2013 5:57 am
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mikesmithm2
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Differing types of credit card debt consolidation can be obtained ... For this, the one thing you will need is really a powerful credit score to ... Want to know more details about Debt Relief and Debt Advice please contact us.
Post Mon Mar 04, 2013 10:16 am
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hewiesidney
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Credit card debt can literally kill you. The amount of stress that a person feels with very old debts is overwhelming.
Post Mon Mar 04, 2013 11:24 am
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Swapnil
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Credit Card always bring lot of stress on a person holding it, don't loose hopes I am not good at finance and hence I have joined here, though I am debt free, but I am not able to save up anything for future so I am here to find some good advice on saving, I think Oldguy has given you a better advice sell off your car and get rid of your car loan and then plan to get rid of other credit card loans you will become debt free within 3-4 years or so, don't loose hopes fight till you win.
Best of Luck Smile
Post Fri Mar 15, 2013 5:44 am
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gilbertholdings
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with your salary, it seems like you'd be able to pay the debt without going into bankruptcy and ruining your credit. i'd sell the new car and drive the old one and just be current on all paymens at that point if you can. hopefully your salary will go up quickly being an eng, and in the meantime, look for a second job as a waiter, etc. i know it sucks, but you got yourself into this and it's going to take a little work to get out.
Post Fri Mar 15, 2013 10:36 am
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Wino
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You still need to give us more information. List the total amounts due and minimum payments and interest rates for all of your loans. There are several reasons for this, but the main one was touched above: if you have 101% of your budget going out in minimum payments, then consolidating the loans into a single loan will help.

Selling the car can only be accomplished if you can come up with the difference between the sales price and the price owed. If the lender will offer you an unsecured loan for the difference, as oldguy suggested, then you're all set. If the lender will not, then that is not an option.

You are quite likely in the position where a debt consolidation loan is the best option, but that is ONLY if you use it to pay down debt, and NOT to allow yourself to run up even more debt, which is what most people do after getting a D.C. loan.
Post Fri Mar 15, 2013 12:33 pm
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