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Trying to wrangle in the unsecured debt I have incurred over the past 11 years. ($70000 apr). CC's are up to date, paying minimum and they have also been sliced and diced per moi'. I also have secured debt in a home loan (just got it, through COuntrywide) and car loan 9k left. I have champagne taste on a beer budget and I am trying to make amends now before it consumes me totally.

Checked FICO from all three back in Nov. 2005 they were all 624 and higher. I also tried to improve my debt to income ratio by requesting increases (they were denied). I realize I have higher debt to income ratio, but I am trying to make a legitimate attempt at successfully paying off my debt on my own.

I was fortunate there were no problems with my Credit report.

Is now the time to contact the CC companies and request lower % rates? I am just at a crossroads and need assistance.

Any other suggestions or ways to expediate and keep it as painless as possible?

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Welcome!

You can try getting on the CC "hardship" programs, but they can cause you real grief if you mess it up.

My suggestion would be to figure out a budget...cut back on the champagne for awhile...and determine how much money you can realistically apply to the unsecured debt. They split that up among the players based on balance owed. Hopefully, you'll be able to make more than the minimums...twice would be good.

If you're set on paying these off, you'll need to come up with more than the minimum each month. The minimum payments are still calculated to keep you paying forever...

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all 5 CC's are just about maxed. Big 3 reported me at 624 during Nov. I can only make minimum monthly payments. I believe I am at the stage where I should contact the CC and check into hardship status. How can hardship status make it harder on me :?: Higher APR's, reports to the Big 3, other...? I have been reading, but don't see specifics on hardship status, a brief rundown would be really helpful, before i set off on the wrong path again.

No worries, the champagne has left me with a VERY bad taste in my mouth!

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I don't really have a specifics on the hardship programs. It varies from

CC to CC. Most require a good reason...medical, loss of job, whatever. Some don't care. They run from 9-12months....usually with 0% interest and a lower payment, but, the payment may not apply to the balance. Some do report to the CRAs, and it is a ding on your CRs. Also, if one decides not to play, they may invoke the "universal default" clause in the fine print of your contract which says they can jack the interest up to like 30%.

Also, most have a penalty clause at the end of the hardship period. Instead of returning to the normal interest rate, they hit you with higher interest.

You need to realize that CC don't want customers that pay them off. They want customers that pay them interest and penalties. The only way to beat them is to pay them more than the minimum.

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UGGHHHHHH...So the AC/DC lyrics are correct the CC "got you by the...".

SO hardship clause is not the route to go. FICO scores are actually fair to good with 692 currently being the lowest. I am assuming my house loan has helped to jack them up.

There are a lot of old accounts which are closed listed on my CR. Should I contact to have them removed or are they a postitive. My negative entries center around debt to income ratio.

What to do, what to do?

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Usually, old accounts that are closed are good. Even with a few "lates".

As for minimum payments...have you been hit with the increase yet? I'm not sure of the effective date, but our wonderful government noticed that CC were structuring the minimums so that the balance would never be paid off...and made them increase the minimum %.

What to do? Not a whole lot of choices. Spend less, make more, file BK. And again, thanks to the government, you'll probably be stuck with a BK 13.

If you don't have plans to buy a new house or car in the next 5 years or so, you can use the "...stop paying on the CC, save the money, endure the phone calls, wait until they're about to charge off, then offer to settle for 30-60% (depending on the card)..." approach. This will certainly ruin your credit for awhile. One of the "debt handlers", like sifxpert can advise you on the technique. Just realize you'll get hit with taxes...

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If you don't have plans to buy a new house or car in the next 5 years or so, you can use the "...stop paying on the CC, save the money, endure the phone calls, wait until they're about to charge off, then offer to settle for 30-60% (depending on the card)..." approach. This will certainly ruin your credit for awhile. One of the "debt handlers", like sifxpert can advise you on the technique. Just realize you'll get hit with taxes...

That would be suicidal. He has decent credit, just owes too much. To me austerity program would be the best bet. For instance, cut your budget as much as possible:

Drop cable, satellite TV ($100+ month)

Drop telephone or cellphone (depends how many calls you make) ($60+ month)

Ride the bus to work or walk, if feasible.

Brown bag your lunch.

Stop eating out - amazing how expensive this is.

Make minimums on all of the accounts except one - use all the savings from above to make higher payments one one account until its paid off. Repeat with others until all the debt is paid.

It would take a while, but is doable.

Asking for lower interest rates wouldn't hurt either.

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I agree with the spell approach as well!

Its amazing what fat you can trim when you start looking around...

I saved almost $200 a month by cutting off the extras on the cable and dumping my home phone LD. That $200 extra a month is going towards savings.

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Actually few people are ever hit with 1099C's as creditors rarely ever forgive debt. And those that are seldom have to worry with the IRS because they are hopelessly insolvent. It has gotten a whole lot tougher to deal with card lenders since October 17, 2005. They know consumers can no longer escape obligations by declaring bankruptcy and that's way they lobbied so hard. Many people will not be able to meet the new minimum payment guidelines and there will be more credit defaults. The best solution may actually be reduction of expenditures and increasing income. Creditor lawyers and credit counseling agencies will become booming businesses in the coming years; not to mention courthouses who benefit from all of the filing fees.

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Spell is right one the money !

With this one addition... Target the LOWEST balance TL you have. It will go away sooner and you can put your $$ towards the next TL- and so forth...

(DON't close the CC accounts leave them open with a zero balance for a better credit score and the ability to borrow quickly in an emergency.)

Remember once you get 50 - 60% of you balanced retired, you are in a whole new world... Your pressure is less and you CAN re-evaluate your plan to start living again if you want to...

My guess is that this will take you 2 -3 years to start breathing easier, maybe even retire the debt totally.

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