Closing cards and paying off as best option

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Marylandgrl
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Closing cards and paying off as best option

Postby Marylandgrl » Wed Mar 17, 2010 3:01 pm

I have 87k in 4 credit cards, the major ones and decent credit.
always payed over minimum, never late and 3 cards were balance transfer only.
In the summer 2 decreased my available limit, doubled minimum payment and I was laid off. I got rehired after 3 months but at a huge pay cut and no more overtime.
I was paying $4000 in credit card pymts monthly.
Now I can afford $2500 only. But payments are raised and interest went up to 29%.
I am juggling and getting in deeper, I just missed my first pymt. and I want to avoid BR but wonder if I just close the accounts can I pay off at the old interest rate? what are the ramifications of this vs. BR?
thanks


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Mogul of Pineapples
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Postby Mogul of Pineapples » Thu Mar 25, 2010 8:54 pm

About how much was your credit card debt before you got laid off?

That's a lot of money to owe on credit cards. Have you tried calling them up to negotiate interest rates?

http://creditcardforum.com/finance-charges-apr-compare/22-how-negoiate-lower-interest-rates-credit-cards.html
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Marylandgrl
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Escalating debt

Postby Marylandgrl » Fri Mar 26, 2010 3:58 pm

Mogul of Pineapples wrote:About how much was your credit card debt before you got laid off?

That's a lot of money to owe on credit cards. Have you tried calling them up to negotiate interest rates?

http://creditcardforum.com/finance-charges-apr-compare/22-how-negoiate-lower-interest-rates-credit-cards.html


Hi Mogul,
I like that Buffet quote!

My debt before I got laid off was about 50k which even then I was embarassed of and thought high. If I had paid my minumums back then the pymts would have been about $1500 monthly. 2 Citi and one Chase were used only to hold balance transfers of 0-3.99%. The one I used was B of A.
But I did not pay the minimum, I paid over $4000 monthly on the 4 cards.
Once I got laid off and one of the balance transfer offers expired things began to snowball. Now with late fees, unable to make the minimum so overlimit, 29% when before my highest had been 13% ---it seems really bad now.

so negotiating 2% off will not help me. I don't know what will and my questions to the forum were about if I default.....can I close the accounts and then pay them off but not keep accumulating the fees..just flat out close then pay off and pay monthly :cool: what I can, say $500 month each or will they sue me if I don't pay the amount they want.
I did call Citi (2 accounts) and they were very nice, said I had been great customer, etc...and they gave me an option of paying $800 per month for 3 months to try to get back on track but interest rate would stay at 29% but the main problem with this option is that the first person I talked to told me that would be for both Citi accounts then when I called back they said that was a mistake and that was only one account, now we could look at the second and NO they will not consolidate accounts.
So flat out --with the interest being raised so high, fees, etc...my monthly minimum pymts on 4 cards now would be over $4500 and I wouldn't really even be paying them down. But I ONLY have at most $2500 a month and even that leaves me broke.
I really don't want to file BR so want to pay it but for being a good customer and getting punished at 29% does not sound right either.
What I want is to close all but one and pay off but at a rate I can afford but I don't know how to make that happen.
thanks for listening.

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Postby DoingHomework » Mon Mar 29, 2010 2:16 pm

You can no longer discharge credit card debt in bankruptcy so that would not do you any good.

I think you are going to have to go for some assistance from a NON PROFIT credit counseling service.

Your credit is going to be wrecked and you are going to end up paying a substantial fraction of your income every month until the debt is paid off. That could be 20 years or more. But at least if you go through credit counseling they MIGHT be able to get your interest rate down to a reasonable level and get late fees removed.

Not to be critical but your situation is very bad. The credit card companies want their money back so they will likely go after you and accept any settlement that results in them getting most of their original loan back. It will take a professional to negotiate this for you.

Marylandgrl
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Closing cards and paying off

Postby Marylandgrl » Tue Mar 30, 2010 4:14 pm

Thanks for taking the time to write me.
It is depressing.

I called a # Citi gave me (since I have 2 Citi cards and this is one I am behind on) but I had a hard time understanding them. Best I think they said is that I need to call another # and ask for a payment plan. They said they can’t deal directly with consumers but I have to get with a credit counseling agency and get things set up then from there that agency deals with them. One thing I did get for sure is that they are part of Citi and I cannot put all 4 cards on this plan, only Citi cards.

I plan to call the second # tomorrow but I also wonder if I should try to find one that will consolidate them all.

Also I get these things in the mail all the time to consolidate and I believe they are like second mortgages. I do have one house in another state that is rented out and it has about 30k in equity in it.

My friend in FL just did a bankruptcy and it did discharge her CC debts as well as a second mortgage. Are there different kinds of BR maybe or can you point me to that new rule?

Thank you for your time.











DoingHomework wrote:You can no longer discharge credit card debt in bankruptcy so that would not do you any good.

I think you are going to have to go for some assistance from a NON PROFIT credit counseling service.

Your credit is going to be wrecked and you are going to end up paying a substantial fraction of your income every month until the debt is paid off. That could be 20 years or more. But at least if you go through credit counseling they MIGHT be able to get your interest rate down to a reasonable level and get late fees removed.

Not to be critical but your situation is very bad. The credit card companies want their money back so they will likely go after you and accept any settlement that results in them getting most of their original loan back. It will take a professional to negotiate this for you.

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alsteig
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Bankruptcy

Postby alsteig » Thu May 27, 2010 9:41 pm

Go bankruptcy. In the long run you will save. Yes you can discharge CC debt in bankruptcy. You will have to give up the rental prop assuming your doing liquidation. Go see a BK atty, calculate cost. Now sit down and calculate what it will take to pay CC and or debt settle. Either way your credit is tanked but don't drag it on and spend so much more when BK is simple. Many see it as the mark of the devil but it is your money. In 10 years you will be clean. Good luck tell us what you decide to do.

Marylandgrl
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Postby Marylandgrl » Fri May 28, 2010 9:26 am

alsteig wrote:Go bankruptcy. In the long run you will save. Yes you can discharge CC debt in bankruptcy. You will have to give up the rental prop assuming your doing liquidation. Go see a BK atty, calculate cost. Now sit down and calculate what it will take to pay CC and or debt settle. Either way your credit is tanked but don't drag it on and spend so much more when BK is simple. Many see it as the mark of the devil but it is your money. In 10 years you will be clean. Good luck tell us what you decide to do.

Alsteig,

Thank you so much for the reply. When I first posted I knew next to nothing about all of this, I have since educated myself! I think I would have done the bk (and still could) if that other poster had not stated that you can no longer dishcarge cc debt in bk, I have, of course, learned that is not true.

at any rate, I learned about settlement and insolvency and 1099 forms. I am insolvent for tax purposes.
Citi offered me a settlement at 39 days past due of 40%. I am now 69 days late and still negotiating, think it will be settled today at 25% then I will tackle Chase and B of A.
Thanks again!

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alsteig
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Maybe Wait

Postby alsteig » Mon May 31, 2010 11:36 pm

Think @ waiting to 120 delinquent. I haven't looked at your financial situation IE: wage income to garnish, but after 120 and 180 days settlements are going to get better. 10 and 15% are quite common. I am sure you are in a hurry to settle and be done with it just to not have the headache as well. The longer it is charged off the better. Keep in mind collections will tell you anything to get paid. If it is not in black and white ink signed and dated it never happened, as much as you want to believe the person on the other end of the line or the great settlement, watch out for yourself which it sounds like you are doing. Good for you for doing on your own and not wasting $$ on some BS law firm or debt settle company. Keep us updated with offers from what banks.



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