My wife and I racked up credit card debt in college and the few years after college, they compounded by increased rates and as young adults are prone to do several late and over limit fees and don’t have money for the bills put it on the card.
Then we became professionals making decent salaries and had bought a house with a 6% mortgage. As the debt made our decent salaries seem like we were at poverty level (no money after paying bills) we went with a refinance program company named New Day Financial who allowed us to do a 125% refinance on our mortgage resulting in a new mortgage at 8% and a second mortgage at 14% and closing costs again. It all seemed good at the time since we were desperate and wanted to start a family. And the plan proposed by New Day Financial was to revisit in a year to get the rates back down. This was before the housing crisis and now they tell us that the programs that they were hoping to use for us don’t even exist any more, they couldn’t have foreseen the housing crisis, yada yada yada.
Long story short our debt is really bad. Our current credit cards that the second mortgage of $35,000 have not covered have ballooned to another $35,000. I have talked with all of our creditors and gotten them to either give us better rates, special payment plan, temporary plan, whatever they will give me basically. I got some lower rates, some for 5 years, some for 3 months, some gave me squat. I have scaled down all expenses, sold everything that I can and we are serious about getting out of debt. But if there are any other things I could be doing or if there is any new programs or legislation out there that I don’t know about or just any information or literature would be greatly appreciated. Thanks for your time.
Is there anything else I could be doing either in the short or long run. Any info or advice would be greatly appreciated. Again, thanks for your time.
The best solution is going to be one targets the goals you want to meet. Solutions range from staying on the long path you are on now to considering a Chapter 13 bankruptcy where the second mortgage could be crammed down to the value of the property and a repayment plan for the cards could be created at 0% interest.
Are you trying to pay a penance and make amends or rescue your lives and get a fresh start?
What concerns me is that your debt elimination plan currently does not include and money to build up an emergency fund or save cash. You may have cut things so close to the bone and sold everything in your desire to get out of debt that you could easily leave yourself in an unsafe financial place. Without any savings account or emergency fund to fall back on all it will take is one big unexpected expenses to tumble a wobbly house of cards.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.