I have lived with debt most of my life. Parents divorced and on my own since 19. I put myself through school and lived off of credit cards while doing it. I never have caught up. I am now married with two kids.
We were fine with the debt we were accumliating since you never know how long you have to live, we lived for the now.
I own my debt and am not blaming anyone for it. I took it on knowing I ‘d pay more later. That’s how capitalism works. Then my wife lost her job and then had medical bills.I have a great job and in my mid 30’s. The problem now is that the credit card companies cut back all of the remaining credit and that zapped the debt to credit ratio and that had them jack up all the rates. We currently own about 120K of unsecured debt.
I am current on all of my payments and I have never missed a payment. I tried to negoiated a lower interest rates with the credit card companies, but they said they couldn’t becuase I hadn’t missed any payments.
One of them told to purposely miss a payment and then call back. I haven’t been able to get an equity loan since no one is willing to loan more than 85% LTV. Once I go over 80% I have to pay PMI, so it’s a wash anyway.
We have sliced our budget to the bare minimum, cut up our credit cards and have been living on cash for almost the last year. However, this debt clings to me hard. I am paying the monthly minimums, but it’s going to take 30 years to get rif of it.
We make about 125K a year and have a 30 year fixed mortage payment of $1200 @ 4.875%. I would love to get consolidated on this and be happy to pay someone 10%apr for this debt, but I can’t find anyone to do it.
You would think a bank would be happy to make that instead of me giving it to the credit cards. I understand that they see me as a risk since there is nothing stopping me from racking up more debt. I have about 20K in my 401K that I could pull, but that is just a start and may end up costing me more. I am worried becasue if anything unforseen happens, I have no way to pay for it. I talked with a debt counseling program, but they were not able to help me since I would actually need to pay all of my debts in 4 years, the monthly payments were too high. I am too proud to file for bankruptcy.
How do I get out of debt in less than 30 years? Am I out of options for a mid thirties guy that owns a house and has a good job? Should I start missing payments to renegotiate lower interest terms?
You made an interesting statement when you said you were too proud to file bankruptcy. What makes that interesting is that it’s a decision based in emotion to a problem that’s based in math.
I don’t want you to let your “pride” leave you stuck in a situation that sounds as if it leaves you and your family in an unsafe position.
If you were unable to afford the credit counseling payment it sounds like you are also unable to save money and build up your emergency fund at this time as you are trying to dig yourself out of this huge hole. The lack of a financial safety net exposes your family to a potentially tragedy in the event of a big unexpected expense.
Being proud is a good thing but being uninformed about what bankruptcy would really mean for you in your situation, is not. That’s not prideful, that’s just uninformed.
Let’s start this journey with you taking a few minutes to read How to Get Out of Debt. The Honest and Unvarnished Truth.
Then, even though you may feel you are too proud to file for bankruptcy, you owe it to yourself and your family to at least look into it. You can click here to find a local bankruptcy attorney and talk to them for free.
What many don’t realize is that just because they go bankrupt, does not mean they can’t still repay their creditors for moral reasons. They just get to do it under terms they determine they can afford and which allow them to prudently and wisely save money and build an emergency fund to do better moving forward.
Come back and update me in the comments section below about what you decide to do and explore.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.