I have a good steady job (56K) and I stupidly allowed myself to get 47K in credit card debt. I own my home and have about 40K in equity (based upon a refi when I had still good credit end of 2008). Most of the cards started out with low/zero interest but are now going to regular APRs (which seem to be in the 24-30% range for me). Needess to say I have stopped using the credit cards!
What is the best option here? Should I look at bankruptcy? What about a debt consolidation loan – although I have NO idea how that works. Any advice would be greatly appreciated. Many thanks!
You can start out looking at a debt consolidation loan from LendingClub.com. LendingClub is a peer-to-peer lending network that will give you a fixed rate, unsecured loan of up to $25,000. The combination of paying off your highest rate credit card debt with your loan and the remaining debt may be too much for you.
If you can afford about $940 and you are just looking for lower interest rates then click here for credit counseling information. A credit counseling approach may suit you well if you can afford the debt management payment still save money.
Ultimately you are going to need to address the underlying issues that allowed you to get so far in debt. If you restructure your debt but continue the spending you will only wind up in worse shape latter.
Once you look more closely at those two options, if they don’t do the trick for you, come on back and update me below in the comments.
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.