Credit Card Debt

Home ▸ Archive ▸ Serious Business ▸ Credit Card Debt
McFly1955's avatar

McFly1955

Senior Member

1,441 posts
Jan 27, 2010 11:13 AM
Someone has told me about their situation and asked me about the best way to rid themselves of credit card debt....They are middle age, no equity in house, but have equity in their vehicles, about $25,000.

Credit card debt around $100,000, they make all of the minimum payments and are paying an extra $500 or so on the lowest balance card, and plan to do a snowball reduction type of plan....The problem is, they are probably not going to get anywhere as 100K is spread over several cards, with varying interest rates from 15-30%.

Advice?

-debt settlement program? (high fees, don't know a lot about it myself)
-bankruptcy? (always a very very last resort)
-continue their own debt reduction plan?

I told them I would call and reduce the rates ASAP.....

I can't imagine being in that situation....I've never carried a CC balance, and while I do have student loans since my wife and I got out of college just a few years back, we are actively paying extra when we can, pay a little extra on our mortgage, and only have 1 car payment at a time, all while putting in the max to get our employer 401k match. I hate debt, and plan to be completely out of it by 30 years old (except for the house).

I'd want to throw up if I were them.
Jan 27, 2010 11:13am
Trueblue23's avatar

Trueblue23

BASEDgod

7,463 posts
Jan 27, 2010 11:15 AM
Wow and I thought I was bad for having a few hundred bucks on my credit card. I actually just paid my last balance off, feels great!
Jan 27, 2010 11:15am
C

Con_Alma

Senior Member

12,198 posts
Jan 27, 2010 11:16 AM
unbelievable

Is the debt due to medical or fixed living expenses incurred while a job loss was experienced?
Jan 27, 2010 11:16am
S

Society

Senior Member

1,146 posts
Jan 27, 2010 11:16 AM
Is bankruptcy even an option on credit card debt now? I thought they passed a bill that doesn't allow this.
Jan 27, 2010 11:16am
McFly1955's avatar

McFly1955

Senior Member

1,441 posts
Jan 27, 2010 11:17 AM
Con_Alma wrote: unbelievable

Is the debt due to medical or fixed living expenses incurred while a job loss was experienced?
I believe only a small portion, like a few thousand...The rest I assume was just reckless spending and not worrying about paying it back.
Jan 27, 2010 11:17am
Trueblue23's avatar

Trueblue23

BASEDgod

7,463 posts
Jan 27, 2010 11:17 AM
I still have my two cc's, but I don't even keep them in my wallet anymore. They are locked up in my safe, only to be used on a rainy day.
Jan 27, 2010 11:17am
OneBuckeye's avatar

OneBuckeye

Senior Member

5,888 posts
Jan 27, 2010 11:18 AM
Call one of those 1800 numbers I am sure they could help.
Jan 27, 2010 11:18am
M

Manhattan Buckeye

Senior Member

7,566 posts
Jan 27, 2010 11:18 AM
They are never getting out of that without some sort of windfall. The best bet is to call the cards directly to see if they can get lower rates, I'm not sure how much success they can have.
Jan 27, 2010 11:18am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Jan 27, 2010 11:23 AM
Call Acorn Operation they may be able to do something ............ like create a false ID and new social sercuity card
Jan 27, 2010 11:23am
Fab1b's avatar

Fab1b

The Bald A-Hole!!

12,949 posts
Jan 27, 2010 11:24 AM
Awesome Belly
Jan 27, 2010 11:24am
j_crazy's avatar

j_crazy

7 gram rocks. how i roll.

8,372 posts
Jan 27, 2010 11:24 AM
This person needs professional help.
Jan 27, 2010 11:24am
F

fan_from_texas

Senior Member

2,693 posts
Jan 27, 2010 11:26 AM
Ouch. Unbelievable. The best bet is (1) stop spending and cut up the credit cards; (2) call the credit card companies, explain the situation, and seek to negotiate rates; and (3) if the companies won't negotiate, perhaps call a credit counselor.

Alternatively, they could wipe the slate clean by selling off everything, significantly downsizing, and focus on paying off the debt.

It's one thing to declare bankruptcy in a situation where there is unforseen job loss or medical emergencies. While that's bad, it's understandable. But profligate spending? It's morally reprehensible to declare bankruptcy in a situation like that unless you've sold off everything and still can't make the payments. And even then, it's awful.
Jan 27, 2010 11:26am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Jan 27, 2010 11:29 AM
I'd focus on putting all my money towards lottery tickets. Better odds the more you buy.
Jan 27, 2010 11:29am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Jan 27, 2010 11:30 AM
Fab1b wrote: Awesome Belly
Thank you I will be here Monday thur Friday bring a friend next time
Just trying to show the lighter sided of Belly
Jan 27, 2010 11:30am
Trueblue23's avatar

Trueblue23

BASEDgod

7,463 posts
Jan 27, 2010 11:31 AM
fan_from_texas wrote: Ouch. Unbelievable. The best bet is (1) stop spending and cut up the credit cards; (2) call the credit card companies, explain the situation, and seek to negotiate rates; and (3) if the companies won't negotiate, perhaps call a credit counselor.

Alternatively, they could wipe the slate clean by selling off everything, significantly downsizing, and focus on paying off the debt.

It's one thing to declare bankruptcy in a situation where there is unforseen job loss or medical emergencies. While that's bad, it's understandable. But profligate spending? It's morally reprehensible to declare bankruptcy in a situation like that unless you've sold off everything and still can't make the payments. And even then, it's awful.
I agree.

When I was 18 years old, a friend of mine and I both decided to get a credit card, just to have in case of emergencies and to try to establish credit. I did a pretty good job of keeping up on mine, but that's still not to say I didn't buy retarded crap simply because I could. My buddy is a different story though.. he quickly maxed his card out, then got another card from Best Buy, which he used to buy and Xbox 360 and games and stuff. He never made one payment on anything, not one. He is 21 years old and about to file bankruptcy so he doesn't have to worry about them and he can let his car go back to the bank. What a winner.
Jan 27, 2010 11:31am
Websurfinbird's avatar

Websurfinbird

Chosen Person

656 posts
Jan 27, 2010 11:32 AM
McFly1955 wrote:
Con_Alma wrote: unbelievable

Is the debt due to medical or fixed living expenses incurred while a job loss was experienced?
I believe only a small portion, like a few thousand...The rest I assume was just reckless spending and not worrying about paying it back.
At first I felt kind of bad, but now after reading this I don't.
Jan 27, 2010 11:32am
FatHobbit's avatar

FatHobbit

Senior Member

8,651 posts
Jan 27, 2010 11:35 AM
You wanna play, you gotta pay...

I would try to transfer it all to different cards with lower rates. I get offers all the time to transfer to a different card with a low interest rate until it's paid off or 0% for a fixed time. I'm not sure if that's an option when you're $100k in debt. Then just spend less than you make until it's paid off. Might not be a fun answer, but it will eventually work.
Jan 27, 2010 11:35am
power i's avatar

power i

Senior Member

1,296 posts
Jan 27, 2010 11:37 AM
ZWICK 4 PREZ wrote: I'd focus on putting all my money towards lottery tickets. Better odds the more you buy.
Lol.
Jan 27, 2010 11:37am
M

Manhattan Buckeye

Senior Member

7,566 posts
Jan 27, 2010 11:41 AM
"I'm not sure if that's an option when you're $100k in debt."

Unless the credit card company accepting the transfer is ran by babboons, it isn't an option. That's why I think there may not be much success calling the current companies, they'll take a look at the credit report, possibly presume bankruptcy is the only option for the cardmember and try to squeeze as much out of the monthly minimums and what they may get out of bankruptcy.
Jan 27, 2010 11:41am
sleeper's avatar

sleeper

Legend

27,879 posts
Jan 27, 2010 11:42 AM
They need to talk to a credit counselor/debt relief agency. What they do essentially is charge you a monthly fee(which isn't terrible, like maybe $20 a month) and they work with your income to determine a rate a fixed monthly cost to start paying down the debt. Usually it's less than you would normally pay and it allows you to slowly start paying it off. They negotiate with the credit card companies to allow for this to happen. Essentially, the only catch is you can't use credit cards while you are paying them off, but that should be a no brainer.
Jan 27, 2010 11:42am
Trueblue23's avatar

Trueblue23

BASEDgod

7,463 posts
Jan 27, 2010 11:43 AM
Could they just make a minimum payment for the rest of their lives? I know that isn't a good way to deal with it, but it sounds like they're really screwed.
Jan 27, 2010 11:43am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Jan 27, 2010 11:45 AM
power i wrote:
ZWICK 4 PREZ wrote: I'd focus on putting all my money towards lottery tickets. Better odds the more you buy.
Lol.

I can't believe I'm offering this advice for free on here.
Jan 27, 2010 11:45am
majorspark's avatar

majorspark

Senior Member

5,122 posts
Jan 27, 2010 11:47 AM
fan_from_texas wrote: Ouch. Unbelievable. The best bet is (1) stop spending and cut up the credit cards; (2) call the credit card companies, explain the situation, and seek to negotiate rates; and (3) if the companies won't negotiate, perhaps call a credit counselor.

Alternatively, they could wipe the slate clean by selling off everything, significantly downsizing, and focus on paying off the debt.

It's one thing to declare bankruptcy in a situation where there is unforseen job loss or medical emergencies. While that's bad, it's understandable. But profligate spending? It's morally reprehensible to declare bankruptcy in a situation like that unless you've sold off everything and still can't make the payments. And even then, it's awful.
I agree with this as well. I would suggest once they sell everthing off, take some of the cash left and see if a few of these credit card companies will take an up front settlement for a fraction of the debt owed. Get this debt down to a manageable amount. Then focus on paying it off.
Jan 27, 2010 11:47am
H

Hammerin'Hank

Senior Member

151 posts
Jan 27, 2010 11:48 AM
You say they have equity in the vehicles? How in the h*** can they have their vehicles paid off? Besides that, the equity in their vehicles is depreciating daily.
Without completely stopping the use of their credit cards, they will never get out from under this......unless they file bankrupcy. We all then know who will be paying their way out. It will be us.
Jan 27, 2010 11:48am
C

cbus4life

Ignorant

2,849 posts
Jan 27, 2010 12:01 PM
How the hell were they able to get up to 100k anyways?

I mean, i know people with 10k debt, but at least that is completely manageable and can have yourself free of it in a few years if you really focus.

But 100k? Who was giving them credit cards?
Jan 27, 2010 12:01pm