My wife and I owe about 60,000 on multiple credit cards; have a mortgage of $243k (remaining) and a second mortgage (line of credit) with $75k used (out of $100). How we got here is very important but, at this point irrelevant; basically, due to years of borrowing from one card/line of credit to pay another card/mortgage. Obviously, with two kids (elementary and college) our monthly expenses don’t stop with the amount mentioned above.
I have spent over a year calling / writing mortgage company and credit cards companies to see if there was any way any of them could assist – but no one would. I have recently contacted Bank of America to whom I owe about $25k and have the highest monthly payments of $425. They had me talk to 2 money managements companies they used – about 2-3 hours with each company. The companies got a detailed breakdown of all income/expense numbers just to tell me they could not help me because expenses are greater than income (which, of course I already knew). After that I had another session of that directly with Bank of America – just to hear the same thing; they cannot put me on any plan since expenses are greater than income.
I have decided to stop paying BOA and did not pay Oct. & Nov 09 bills. In early December I received a call from them (from someone who actually seemed genuine she wanted to help), went over my numbers again just to hear the same conclusion, and was told that if I don’t make minimum payment by Dec. 16, 09 I will be reported to credit bureau. And, if I do make this payment I won’t have to worry about being reported to credit bureau until Feb. 12 2010 (if I made another payment by then). So I made that payment of $425 in December (by transfer to another credit card. Few days ago I got another call from BOA (unfortunately the ‘nice’ rep was moved to a different department) and was told that I’m currently 2 month behind and that by Feb. 12 will be 3 months behind and, at this point, will owe them $1384. In addition, the rep said that I was already reported to the credit bureau and that I should continue to make any payments I can just to show good intentions.
I am not sure what to do at this point; if they already reported me to credit bureau would it make a different if I pay them or not? Off course I’d like to do the right thing and take responsibility for my debt but does it make sense to keep on transferring balances from one credit card to another (which I won’t be able to do for long anyway since I’m pretty much maxed-out)?
Thank you so much,
You gave me so much great information the answer is simple, you need to look at bankruptcy. In bankruptcy as long as you can afford your mortgage payment you can keep the house, the other debt will either be discharged, wiped out, or a payment plan will be developed that you can afford.
Click here to find a local bankruptcy attorney. Go talk to them and then report back with what you discovered and learned and we’ll move to the next step.
I know you are worried about your credit, but that can be easily rebuilt. First, we need to really solve this problem.
The balance transfer thing or using one card to pay another is not sustainable and that path will be a dead end. We need to intervene, not postpone.