My husband and I lived comfortably and had a good run for the first 10 years of our 22 years of marriage. However, we helped others a little too much and then we ran into some issues when my husband lost his job and we were forced to open up his side business full time.
During that time we ran up business debt (approx. $60,000). He has since obtained a full time job and still runs his business and I am working part time. We have never missed any payments, however the bank is bearing down on us. They closed my husband’s business line of credit ($20,000) and converted it to a regular loan which increased the monthly payment by about $150.00 more. Again, we never missed a payment.
They are not willing to negotiate a “modification” without mountains of paperwork. We have explained numerous times that we can currently only pay the $250.00 we have been paying, however they say they cannot guarantee this will not go against our credit. We have sought the advice of a bankruptcy lawyer who said we are not bankrupt we have a cash flow problem.
They explained we have equity in our home. All of these things we know, however we cannot get a loan anywhere! We have decent credit scores (avg. 705) for now and continue to make minimum payments on all debt. We have a primary home and a rental which is on the property where my husbands business is.
Admittedly, we have too much credit card debt-personal and business, most of it survival and some frivolous. We both lost our medical insurance offered through our jobs and we have a daughter in her first year of college.
What can we do when the bank is literally threatening us to ruin our credit if we do not pay them the amount they changed our loan to?
How can they demand this information now to “modify” as they say, when in the beginning of offering the loan back in 2007 they shook my husbands hand and said here’s $20,000?
How can we get legitimate help in consolidating our financial issues into a more manageable loan instead of having approximately 20 different due dates in one month for various debt?
My husband’s business is an LLC in which he is the sole member. Is there anyway to file bankruptcy on the business without effecting our personal finances?
If you will answer some questions, I will be better prepared to comment on some options and things for you to think about while developing a useful strategy to address the financial concerns:
Who are the debts owed to and what are the balances on each account (please separate debt in business name an personal and also if any account is just in your name)?
Did your husband apply for the LLC credit in his name using his personal social security number?
What are the interest rates on the accounts?
The banks raising the payment is often the result of a contract provision that allows them the latitude to do so. When your husband took on that specific debt it was at the tail end of the credit fueled crack up boom in the nation’s economy. My what a difference a near depression will bring to the lending space…
Our newly risk averse lending institutions are unwilling to lend, so consolidating the debt in the true sense of the term is not an option unless you look at a consolidation loan through LendingClub.com. Yes, you may be able to group your many different payments to your creditors together through a debt management plan (DMP) offered by credit counseling groups. If you truly want to have a look at what that type of plan will look like for you, I suggest you reach out to an AACC member who offers DMP’s. Set up a consult with one of them.
I would also encourage you to reach out and schedule a consult with one of the AACC members who offer debt settlement plans. You may be a suitable candidate for that option too.
If you can answer my above questions in the comment section below, I can reply with a better grasp of what you are up against.
Michael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.
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