Hi Cyndi

Where to start.  I understand you work for a credit card company and placing your use of your employers credit card in jeopardy I think is the least of your problems.  You have 100,000 in credit card debt and contrary to what your employor might say, living on a cash only or near cash only basis is the proper way to stay out of financial trouble.  I am so positive on your job you hear all sorts of propaganda and I m so glad you came here where you can hear material with no agenda attached.

First of all unless you earn about $100,000 per year you clearly need to take all your cards and out them in a zip lock bag and put them in the freezer and find out how to live on cash only.  It is clearly the goal you must focus on.  You simply cannot borrow your way out of debt.  In my classes at tell folk that "if you can't afford to pay for it in cash, you can't afford it.  It is that simple.

Now what can you do and here are ypur options.  negotiate debt settlemen which I do not advise at all and you will soon read why or you can contact a Debt Management Program (DMP)or you cn declare bankruptcy.  Those are you basic choices but first please read The Truth About Failure Rates.

BTW if you elect  a DMP and you are concerned about your employers card, simply do not include it.  And as far as your credit report and staying current, first of all I think that is just about to end big time regardless of hich option you choose and the truth is you really are not current on all your payments.  You are simply swapping this debt with a new debt on your credit card… kind of like writing a check to cover a check you have written and the bank has yet to find out.  In your case the credit bureau has not found out but very shortly will… completely unavoidable.

One final note.  If any of that debt is co-signed with a former spouse creditors will be looking for the spouse if you do not pay them.

I do wish you well and please give us some feedback on all this.

You asked about a DMP.  I am not certain what to tell you except to offer some general guidelines in selecting the correct Debt Management Agency.

It sounds like you do not have any references from anyone else so that makes it harder.  I hope you have read the article I suggested as that too offers guidelines. Again I have no idea who to offer nor who is good.

However, the largest group falls under an umbrella group called National Foundation for Credit Counseling (NFCC).  They have offices across the nation under the name Consumer Credit Counseling Services (CCCS).  Each office is operated independently so you would have to check with the office and the local Better Business Bureau to learn more of an individual agency.  But some of the questions you should ask is how much they charge, what is there completion rate, what are their fees.  See if you can talk to any satisfied customers.  Find out from BBB how many complaints they have against them.

There are general guilines not only for CCCS but any debt counseling service.

Good luck and please let us know what you learn.  That's how we learn.

Hello Cyndi,

If you do not have the cash flow for a dmp plan, then you are either looking at a consolidation loan, debt settlement or BK.  Both debt settlement and BK will have a large effect on your credit.  Unfortunately, short of you bringing in more income so you can complete a DMP or debt snowball, it looks like you are going to have to make a choice between your credit score or getting out of debt.

You mention your cash flow situation is so bad that you are about to let some of the credit cards slip, which will certainly have an effect on your credit anyway.

Also you mentioned that your debt to income ratio is so bad you likely are unable to get a loan even with good credit.

I know you worked hard at getting your credit back up in the 700's, but what do you plan on using your good credit for over the next few years and is that worth 100,000 plus interest.

I don't know enough about the specifics of your situation to recommend either a settlement approach or a BK at this time, but given what you shared, one of those two options is likely your best bet.

A word of caution on Debt settlement companies.  Most of them are a complete rip off.  Stay away from any of them that want to charge all of their fees upfront, or before you complete the program.

I have some basic questions for you:

1. After meeting all of your required monthly expenses (not your credit cards) how much cash do you have available to devote to paying down your 100K debt?

2. Do you have any assets? (home with equity, retirement account, savings account etc)

Hello Cyndi,

It is good to contact a BK attorney and review that option.  You can't make a confident decision until you are educated on all potential strategies.  Since you are contemplating taking money out of the house and it will be paid off in 7 years, I am assuming you have quite a bit of equity in your house.  Depending on what state you live in, your equity may be over the amount exempted.  If so, you will likely be looking to file a chapter 13 which is much different than a chapter 7.

A chapter 13 is a repayment plan where you will likely be paying on your debt for 3 to 5 years. 

If you want to look into a debt settlement strategy and compare it to what you learn from the BK attorney, you will need to assume that you will have to raise about 50K over the next 2 years or so to settle all of your debt.  Also keep in mind a settlement strategy is not the most pleasant experience to go through.  I recommend that you research both and then together you and your husband can decide the best route to go.

Not a problem,

I am glad we could help.  I would also recommend that you meet with at least 2 BK attorneys.  Please come back and share what you learn.