Ok so it's time to ask for help...I need help.

[mousefanmichelle]

Ok so I have been fighting this for as long as I can and I can't fight it anymore. I need input. Now I fully admit I have made bad choices and given a do-over I would not do what I have done but I can't go backwards. I have to accept the fact that I have made mistakes but I want to fix them so that one day I can retire.

Ok here goes... I have credit card debt (4 cards total). My monthly payments on them are more than I can afford to pay. All of the intrest rates have gone up. I have 1 of those cards on a 0% payment plan that is automatically deducted from my account each month but the other ones have all gone up and I am having difficulty paying them. I want to but it is getting harder and harder. I haven't missed any payments to date.

Where am I going with this? Well I am thinking of snowballing my payments but not the typical way because at the end of every month after everything is paid for I have nothing left and right now all I am doing is paying the minumum cuz that is all I can afford to do.

I am thinking that I will roll up 2 payments plus the payment due to make it triple paid does that make sense?
I will take min due on card 1 and min due on card 2 and add those to card 3's min payment to pay it off - bang, bang, bang. The problem is that card 1 and 2 won't get paid until card 1 is paid off and so on. Once card one is done then I move on to card #2 and triple those until paid off and then onto card #3 and then for card #4 - since those are already autodeducted I will just add to that once card 1, 2 and 3 are all paid off.

I know int. will continue to accumulate and so will late fee's and the harassing phone calls BUT I can then pay off all debt in X amount of years vs paying on them for the REST OF MY LIFE!!!!!

I also know my credit will take a hit but I just can't keep going like this. If I work with CCC or whatever my credit will take a hit anyway and then I have to pay them to help me (which I can't afford).

If this is a bad idea please tell me because I feel like I need to have a plan and this is sounding kinda good. I am budgeting begining this month and plan to stick to it but these payments allow for nothing - no emergency fund, no savings no car repair, no home repair.

Please please give me your suggestions - and again - I want to pay it and pay it in full after all I did buy the stuff but I can't make any headway and I need to and I understand I did it to myself. Trust me I know this.

Thanks!

 

[ziggystardust]

I get the snowball method (i've done it before and attempting to do it again). but why take a hit if you can avoid it?

are you able to afford your minimum payments on all 4 credit cards?

are any of them offering a low balance transfer offer? (this might be good to get your number of cards down and some if not all of your balances in one place, but you'll need to do some math to see if the new minimum payment is doable for you.

are you able to get a PT job to help pay what you can't pay now?

What can you cut out of your household budget to help you pay your bills and keep your head above water?

I'm sure you'll get some good alternate plans here on the dis. they were the ones that have helped me in the past. I'd recommend listening to some of the brains on this budget board before you start missing payments.

Good luck. All is not lost, it will work out. just stick to it !

 

[hffmnheidi]

Have you tried calling the creditors and working out a payment plan? A lot of companies are willing to work with you as long as you are honest with them about your situation and what you can pay now. Good luck. Being in debt sucks.

 

[starann]

Have you tried calling the CC to see if 1. they can lower your intrest rate? If you truely have never been late, they may help you out.

2. Call them and tell them you are having difficutly and see what they can offer.


By not paying them you may run into late fees of about $30 a month on each card then if you go over your limit with those late fees and intrest you may pay an 'over the limit' fee.

Just some food for thought!

 

[GingerJay]

I wouldn't pay late if you could help it...you could do a lot of damage to your credit that way. You might be able to ask for a deferrment though, and that would give you few months with no payments. Then you could use the snowball method without any damage to your credit. Or work out some other payment arrangement with them. Another alternative would be a home equity or cash out refi or another type of loan with a lower interest rate. Good luck

 

[HaleyB]

Don't do it that way.

Call everyone. Mortgage company, car loan holder, cc companies and see what they will do. They are almost always willing to work with you.

If you have a car loan start there. If they will let you skip 1 or 2 payments it could help. Roll through each cc, calling and asking for a deferral on one, then on another the next month. This will prevent any damage to your credit and with the same overall results.

ETA: the cc companies will freeze the account if they let you skip payments, so no more cc for emergencies which is why you start with secured debts first.

 

[MrsPete]

1. Don't add to the debt. You're already under water. You cannot add anything, even a dollar to these cards. Cut back on groceries, eat up some of what you already have in your pantry. No new clothes. No going out.

2. Cut back on expenses. Can you cut back on your cell phone plan? Ditch cable TV? Turn the air condition up a few notches? Something needs to go from your current spending plan. You have to spend less.

3. Add income. Is a second job a possibility? How about selling some stuff on ebay or in a yard sale? (and, obviously, put every penny towards the debt)

4. Call the creditors and see if you can reduce the interest rate. The worst thing they can say is no.

5. See if you can roll one card's balance over to another card. This isn't a permanant solution, of course. You cannot borrow your way out of debt, but it'll reduce the number of bills you're facing.

 

[HJRWoman]

Do you have a 401k that you can get a low interest loan from? DH got a loan from his and we paid off a couple of high balance, high interest cards with it. The loan payment, which is withheld from his check, is lower than the minimum monthly payments for both cards. The loan will be paid off in 3.5 years, so there is a definite end in sight! We were both very happy with this decision and we are tickled that we don't have those CC's hanging over our heads! Good luck! I know this isn't easy!

 

[taymaesmom]

Try credit counseling! We worked with a very reliable one here and it was the best thing we could have done. They call the credit cards and work out a deal with them, they lower payments, intrest and stop late payment charges and over the limit charges. We were able to pay off $8000 in debt in just 3 years and we were better off financially, we actually had money leftover after paying the bills.

 

[SandrA9810]

i know exactly what you are in, and you will take a major hit to your score. But i think your sanity and well being are more important.

You know the situation, you know what you have to work with. I'm not saying go out there and work a million hours on top of what already needs to get done.

1. Set up a budget you can deal with. Like how much food and gas you need. Gas has to be at the top of your list so you can earn money.
My budget list was like this.
1. Rent
2. CCs
3. Gas
4. Insurance
5. Electric/water
6. Food

i used excel because if i changed on number... It would change the rest. Rent was a set amount, so the paycheck was divided into two accounts. The rent money was placed into a seperate savings account and never touched until the 1st. Some months with 5 weeks, there was an extra bit to help with other things.

I listed each CC and the amount owed and due date. Going across i would put in each paycheck date, and then place the CC payment under the date that would get it paid on time. Paychecks went in thursday and bills came out friday. All was done electronicly through the banks webtsite. Occasionally the electric or cell bill would get behind, but dealing with 2-3% fee was a million times better than 30$ late fees and sky high interest.

When things finally got to the breaking point. I called two credit cards (both Citi) and said i'm closing the account, i can't make a payment for 3 months. Just after the due date, they allowed me to go on a payment plan, with a 2% interest for 1 year. But you have to be willing to close your account or they won't work with you. Payments went from 150$ on like a 3,000$ balance to 50$, and it's automatically deducted at a convient time of the month for me. They set it up to come out prior to the close of the following statement, so the account was able to stay current, just closed.

Some of the other cards, BofA was a high balance card... Even after paying a lot of it down, i never went down on my minimum payment. So the budget from 6 months before was practically the same. That allowed the payments to start hitting the balance rather than interest fees.

I posted this same topic over a year ago. And got a lot of negative advice. But i went with what i wanted to do. It really helped out. And i think there were 7 cards total, so just knocking 2 payments off were a major help.

They generally won't help you until you've closed the account and miss a payment. Once you get at least one card (go for the highest payment one) on a payment plan like that, you can take the remainder of your original min payment due and sock it to another CC. It's amazing how even 20$ extra can turn a 22yr repayment into just 3yrs. Because you're paying at the principle and not the interest.

 

[threecrazykids]

I suggest the same...call EVERY SINGLE ONE OF YOUR BILLS and see if they will work with you.

That is what we did and it's been a huge help. It's by no means put thousands in our account every month but it helps get them paid down. We actually met with a bankruptcy attorney who suggested before we made ANY decisions to do this.

I called and explained the situation to EACH one of the cards told them basically in a nutshell that we are on the verge of filing BK and are asking them for assistance to avoid it.

I now have cards that we closed, they put our interest to zero and we are paying the monthly amount and will be paid off in 2 years. No problems or concerns, they were wonderful to work with. No hit to our credit etc.

We also have cards that they lowered the interest rate, (not at zero) but it still helps...and the last card (Capital One) they of course did NOTHING. And to be honest...the gal who I spoke with told me "until you prove you aren't able to make payments there isn't anything we can do to help". I thanked her and knew it wasn't her choice to not be able to offer me anything. She said "you''ll be surprised at how fast the calls will come to offer assistance once you've missed a payment".

Anyway...sorry for the ramble. CALL THEM! Tell them that you are NOT able to make a payment and are considering bankruptcy within the next month or so...doesn't hurt to ask!

 

[SandrA9810]

i went with one of the nationwide, highly respected credit counseling places... Fill out the whole nine yards form online, and got an entire book back of services they provide and how they help. The last pages were of my current budget and how long it would take to pay it off. And the next was of their budget and how long it would take to pay it off.
Their help - 20$ a month savings and 5 months longer than the budget i was doing on my own. I didn't feel 20$ a month was worth it... And on top of that there were fees to them to be paid.

I laughed when i saw it. Maybe i'm just good at crunching numbers and working with a budget....

 

[Aisling]

OP, I just want to say don't panic. Follow the advice of the posters who said to call all the credit card companies and tell them what's going on. Tell them you want to pay your debt, but cannot afford it with the higher interest rates. They will work with you! If they have to close a card or two in order for you to get a 0% interest rate, so what! Like Sandra said, your sanity is more important than your credit score right now! Best wishes, it'll be ok, but MAKE THOSE CALLS!

 

[jlhill4444]

Here is what I suggest if you are willing to take a hit to your credit. My bil works as a debt settlement company. They basically had clients pay a certain amount every month that is put into a savings account. They tell clients to stop paying credit cards. Eventually, after about 6months the credit cards are charged off. At this point they are willing to take a settlement. Since you have been saving money for six months you should have some money saved up to pay off the cards at 40-50% of the balance. They take less and call it settled. Keep putting money in a savings account and settle the balances with the companies as you have the funds saved up. As soon as the cards are settled your credit score will start coming up. Debt settlement companies charge a fee to do this when you can easily do it yourself. Most companies are more willing to work with you anyway.

 

[dimimi]

Remember you will pay late fees every month, that will really add to your totals,

Can you switch your high percentage acounts to your zero interest account?

 

[Aisling]

Here is what I suggest if you are willing to take a hit to your credit. My bil works as a debt settlement company. They basically had clients pay a certain amount every month that is put into a savings account. They tell clients to stop paying credit cards. Eventually, after about 6months the credit cards are charged off. At this point they are willing to take a settlement. Since you have been saving money for six months you should have some money saved up to pay off the cards at 40-50% of the balance. They take less and call it settled. Keep putting money in a savings account and settle the balances with the companies as you have the funds saved up. As soon as the cards are settled your credit score will start coming up. Debt settlement companies charge a fee to do this when you can easily do it yourself. Most companies are more willing to work with you anyway.

This is what my sister and BIL did, and yes their credit score took a hit, but they're debt-free for 2 years now and are working on restoring their score. The only issue was the constant phone calls from the credit card companies when they stopped paying.

 

[Kika]

I would absolutely not take the hit on your credit if you don't have to. It may sound like a good plan to you now for the short term, but it is one that you may regret in the long term.

I agree with those who ask if you can boost your income.

Do you and your DH both work FT? If so, do either of your jobs offer overtime or extra hours? If, not can both of you work? Can you sell something or some things?

It may stink to have to do work more, but if it's only be temporary until you can get one or more of these CCs paid off, it could be worth it.

If you truly want to turn things around, this would be my recommendation.

Good luck!

 

[momejay]

I am not sure this would work, but is there some way you can consolidate all the balances onto one card with a lower interest rate? My cards are always sending me checks.
You could pay one bill with a check for the other card. Then you don't have the late fees. I had a friend that when she got in a bind she would use her American Express to pay the Visa & then the Visa to pay Mastercard...
It made no sense to me at the time & I am not sure it makes sense today, but she didn't pay intrest or late fees & she was able to pay off one card at a time.

 

[DrMomof3]

We recently discovered Dave Ramsey's books and website. He has some very helpful suggestions. Maybe you can borrow his books from the library? You can download his worksheets from the internet for free. We've been on a tight budget for 2 months now and it has helped us see the proverbial light at the end of the tunnel. He has a lot of suggestions that might help you.

Amanda

 

[brymolmom]

Good for you for wanting to turn this around!

Don't know about the cc payments...My only suggestion is that if you have a WDW trip planned for next year - skip a year and put ALL OF THAT toward your cc's - that should make at least a nice little dent.

Good Luck!