I Thought I Did the Right Thing With My Perfect Credit. – Jim

“Dear Steve,

I have always prided myself on having good credit. I never missed a payment on any secured or non secured loan, including credit cards.

A few years ago, I wanted to upgrade where I lived so I purchased a nicer Florida condo and kept my old condo to rent. I purchased a condo that required 12% down, so instead of a small second mortgage, I went to my bank and was offered a low interest credit card loan. Everything was fine for a few months, then I started reading that the Florida real estate market was slowing, prices stopped climbing like they had been and well everyone knows what happend, I ended up way upside down on the home I just bought.

I continued to pay my bills and as one low interest loan expired I just rolled it into another bank, and continued to pay. I kept thinking “next year things will be better, I will be able to sell my old condo and get out of this mess, but things have not changed. Now I am told, through not fault of mine, my credit card interest will increase due to recent legislation that will freeze rates in the future.

Also, banks of cought on and are not willing to give me any more loans to flip my balances into. I see huge payments in 2010 and not sure how to handle them without credit card settlement or bankruptcy. My old condo is now also upside down in value, so selling that is not an option either. I also found out everytime I shop around for another low interest rate loan, not only am I not approved, but also a strike goes agaist my credit rating because I have another inquiry on my credit report.

It seems like a no win situation and I have still never made a late payment in my life. I also see on my credit report a notation that I am not paying down real estate as fast as I should be, even though I have paid everything according to my contract. I thought my record of perfect payments would work to my advantage, but I am not sure now. Should I stop paying and just work on settling for a fraction of what I owe in a year or so. Should I just declare bankruptcy and start over? I am wondering where all the government bail out money went. No one has offered my anything.

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Jim”

Dear Jim,

Can you give me some more information?

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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