We dont make enough money to pay all the bills at one time. (I know you are rolling your eyes because everyone who asks a question probably has the same problem) I am looking to get a full time job but have not had any luck as of yet. We have set up 8 credit cards with a total outstanding of $45K on payment arrangements. Which is great but I cant afford all the payment arrangements at one time as they total $1200, then we have cars that total $800 a month and the house is $1500 a month.
Then there is everything else(utilities, food, kids, etc). The important ones have gotten behind (mortgage and cars). The cars only have 14 months left so I dont feel we should try to get rid of them but finish the loans on them then they are free and clear(though very used). I know Dave Ramsey says to just stop paying the cc’s to get everything else caught up but I am afraid to do that. I have it all listed on an Excel spreadsheet and just dont know which ones to pick.
How do I pick which cards to pay and which ones to stop paying? Payment arrangements are great (some are 0% interest) but they almost equal a second house payment and leave us nothing for food, utilities or cars.
Dear Leigh Ann,
I’m left wondering if the “stop payment” strategy just leaves you in deeper trouble. When you stop paying your credit cards you will wind up in collections, you may be sued by a creditor or two, and that could lead to a wage garnishment.
Even if you only defaulted on a couple of them that can still result in a negative mark on your credit report and the remaining creditors might raise your interest rates as a result.
What you might want to do is to click here for credit counseling information and find out if you could afford a debt management plan payment. If you could then you could default on your cards for a month or two to get caught up on the rest of the stuff and then begin your credit counseling program.
Missing payments will hurt your credit but the credit counseling group should be able to get you some decent interest rates to allow you to repay the credit card debt.
If you don’t think you could afford a credit counseling payment then the most logical solution is for you to click here to find a local bankruptcy attorney and go talk to them.
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.