I have spent the last hour or so reading thru posts in here trying to figure out what to do an d where to turn. I am so overly confused it is not funny. Here is my situation….
My husband and I have accumulated about $31,000 in credit card debt. We have been paying on these cards for quite a while and are at a point where we are now only paying the minimum payments on most. We have just recently (within 2 weeks or so) realized it has to stop and we have to stop using the cards cause we are buried.
My husband just lost his job (ha…two weeks ago…good wake up call huh?) and we are not sure when he’ll get another one. He’s interviewing and has resume’s out so we are hopeful even in this economy for something.
Two days ago I called a company I found on the Better Business Bureau – it is a company in my own state – I was thinking that it was better to contact someone local and not get scammed. The guy talked to us for 3 and a half hours on the phone – we asked a ton of questions, he went over our debt and situation and said that at this point, he recommends debt resolution/settlement. Of course, he’s salesman, and talking to him he’s playing it up for all it is worth to be the best solution ever. He was frank and told us that it meant stopping payments to the cc’s and it would be hard, the collections calls would come, it would get nasty, etc. but that while that was going on, we’d be sending his company a payment every month, they’d be setting it aside and when there was enough accumulated, they’d approach a card to settle. Several of our cards are $2,000 and under and then our two biggies, Capital One and Bank of America (both companies total jerks)…are at $12,500 each. It seems like it would take at least three years to get debt free. Talking to him, it sounded good, my husband was all for it, and excited.
Yet…we both know this will trash our credit for at least 7 years – and in some ways we were ok with that. BUT….after reading t hings in here, I am really second guessing things and to be honest, probably already was, and that is why I am searching online for solutions and the “truth” about what debt resolution does to you. I’ve read things about it having IRS tax implications in the future…but am not 100% sure what that means and …does this stuff really get written off after 7 years and then you are free and clear to start your life over again, debt free and credit card free or does it haunt you forever?
I do know that we will NEVER get this paid off the way we are going, after 20 years we are still going to be paying this off and drowning.
I just do not know w hat to do.
Currently as we do our budget, we cannot afford to pay any credit card payments on unemployment wages. Best case scenerio is that hubby gets a job right off and we are making money again…BUT…..even then, we are still treading water and not getting anywhere on the damn cards. They don’t get paid off!
As it is, we have an LL Bean Visa…we have NEVER been late, Never maxed the card out and in the past few months they changed our line of credit from $7,000 down to $2600 due to our other cards and how much we owed. At the time, the LL Bean card had barely $500 on it. Now, we got a letter in the mail stating they are upping our interest rate to 18.99% – and we have NEVER, EVER been late!!!! it is crazy and frustrating!!!! The more you owe, the more they stick it to you and they make it impossible to get out of debt!!!!
I am suffering headaches and am sick to my stomach, cannot sleep and am going insane within my own brain here. I don’t know what to do. I don’t know if we should go forward with the debt resolution/settlement process – and I do NOT, I repeat DO NOT and will NOT file bankruptcy. No way. I will do anything and everything to not go that route. No way. It’ll never, ever happen.
Should we take our money that is in our 401K’s and just pay off the debt, take the horrible tax hit and be done?? Then we’d be freeing up hundreds a month and could just put as much as possible into our IRA and Roth IRA over the next few years?? If we didn’t have CC payments, we’d have extra money to get that retirement back up to where it was….but t hen that is another whole issue – we don’t have jack squat in our retirement anyway – we are 40 and 42 years old and only have about 60K put away. Disgusting!!!!!!
What the heck do I do, where to I turn and how can I figure this out???
I am hoping you who have been there and are currently doing this can shed some light and help me at least head in the correct direction. I just don’t want to make the wrong choice.
OH and I called Capital One the other day, to talk to them about hardship….after getting bounced around 4 times because of the fact that I am “current” and them not knowing who to put me thru to – they offered me a deal where I would not get late fees for the next 3 months while we were going thru ‘hardship’ ….but the kicker was that they will still be charging interest, and the minimum amount was still due each month and would be accumulating as the months tick by – and to get current again would be paying the full amount due – which was all the payments we missed…. and to top if it off, of course our interest rate would go sky high as I missed payments. What the hell?! Thanks for the freakin help. I am not dumb. save me the late fee of $39 but jack my interest up and stick it to me on the other end…..yah, thanks.