Hubby and I bought our home in 2007, our credit was in pretty good condition. We had the same amount of credit cards as we do now, with the exception of 2. One each. Some are the same cards for both of us.
We have about 13 or 14000 in just credit cards. My car will be paid off in November, his in 2011. He owns his own business in additon to working full time for insurance purposes. Our daughter has a birth defect and NO insurance company would accept her since her condition requires a lot of surgeries and her background is so extensive. So, I stay home to take care of her.
I have student loans in about $2000, but its accuring interest daily and I have til July to start repayment. And since the stimulus and bailouts, I’ve called all the credit cards for myself and hubby to redo the interest and they said no, there’s nothing they can do. Infact, one after the call, dropped my credit limit, which affect my credit score by 20 points. Then after that, we got letters from all but 2 or 3 saying they were going to increase the interest rates and if I didn’t want the increase, i could cancel the card, but I didn’t know the effect it would have to cancel the cards on my credit, if that decrease credit dropped it by 20, i just thought the worse!
And we’re trying to keep our credit reasonable so we can refi in a few years that we will be able to fix up the house from the stuff insurance wouldn’t cover when we had a tornado (screen porch was damaged) and pay off the car for my hubby, put the the rest in the bank for more rainy days. Hubby said consolidation is just as bankrupcty and we dont want that either..We’re lost!
What is the fastest, effective way to pay off these credit cards without filing bankruptcy (which we probably wouldn’t qualify, nor want to) and still not hurt our credit in the process.
You certainly have had a lot of things that normally sink the average financial ship. You deserve a big pat on the back for finding a way to work your way through these issues.
Outside of bankruptcy, the least harmful intervention would be to enroll in a debt management plan and see if the new lower interest rates offered through the plan will assist you to repay your debt. A mark can be made on your credit report that you are in a debt management plan, but it is not bankruptcy.
The only painless way out of your current situation would be to pay the bills in full or at least the minimum payments. You could then use the debt snowball approach to reduce the debts with some turbocharging.
If you want to see if debt management would be right for you, it never hurts to ask for additional information. You can click here for debt management information.