I was laid off the last quarter of ’07 and we are down to one income. We’ve been using our savings to keep up with all our payments including our mortgage.
We want to proceed with a modification of our mortgage, but with our credit card debt we’re afraid we won’t qualify and would like to come up with some sort of settlement with our credit card companies to reduce the balance and make smaller monthly payments. We are current, but our savings will be depleted soon. We have roughly $6k left and roughly $30k in credit card debt. Bankruptcy may be our only option if this won’t work.
Will credit card companies accept a settlement to reduce the balance and accept payments?
Do not send any more payments to your credit card companies. You need to preserve the last bit of cash you have left. It is not enough to do a lump-sum debt settlement with and it would be best for you to explore bankruptcy to nuke your debt and get you in better shape for a loan modification so you can keep your house. Click here for a free bankruptcy consultation with a local bankruptcy attorney.
I know you feel like you are doing the right thing by using your savings, but you’re not. The money you have left is not reasonably expected to satisfy your debt so at this point you are only throwing good money after bad and it won’t resolve a damn thing.
It is hard for people to understand that credit card companies don’t want to get paid unless it fits their corporate criteria and minimums, and your cash on hand is nowhere near enough.
Credit card companies are the smartest companies in selling and generating credit and the dumbest companies at being flexible in getting paid.
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.
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