Introduction and advice needed

[Santiago]

Hi,

My name is Santiago and I'm new to this forum. It's good to see that there are so many knowledgeable and helpful people in here. Gives me hope.

As expected, I'm in here because I'm facing a tough decision ahead concerning my finances. I don't know whether to consolidate, do a debt settlement using one of those companies, or go bankrupt. All I do know is that I can't keep going like this....I'm getting nowhere fast and the ever present stress is unbearable.

Here's my situation:

I have about $29,000 of unsecured debt

$6500 tax debt (I'm on a repayment plan)

$10000 left on my car loan

$7000 student loan (on a repayment plan as well)

$350 monthly car insurance (after two accidents mid-last year that made my insurance sky rocket)

I've been barely keeping up paying the minimum payment on all my credit cards except for the Bank of America one back in December (it's up to $8400 now). They recently contacted me and tried to make some kind of arrangement since they see that I've been able to keep up my payments to my other credit cards. They want me to pay $240 within the next couple of weeks but I just can't swing the funds with all my other expenses. In fact, this month I had to stop paying two other credit cards so soon I'll have that looming over my head.

The only way that I was able to pay my minimums was selling some of my valuable sentimental items and I'm pretty much out of assets already and to be honest I haven't made any headway. Plus, every month I keep getting hit by the occasional non sufficent fund fees from my bank account and one or two day late payment fees each at $40....I just can't do it anymore. If I was making progress, I could deal with it but I'm just getting skewered left and right.

I checked my credit score a couple of weeks ago with TRW because I thought at least I was sacrificing myself to preserve my credit and it's down to a 609.

I contacted a debt settlement company in February and they promised they can cut my debt down to $13,000...with $3000 being a profit for them. I would have ended paying just about the same amount every month when you tally all the monthly payments BUT everything would be paid off in 3 years. It sounded like a scam plus they said that my credit score would drop because the creditors wouldn't receive payment for a few months while they negotiated with them. Then after everything was paid they would attempt to remove any negative info from my credit report. Sounded fishy so I passed.

Should I try and find another deal similar to this or just file bankruptcy?

I apologize for the long-winded post but I wanted to make sure I covered everything. Any insight would be so appreciated.

Thank you.

[MadinKS]

Santiago, welcome. Let me give you my .02 cents on this. I wish there was a magic wand to wave at all of this stuff, but there isn't. I will share with you my feelings on this. I wished I had just done the bankruptcy thing about 4 or 5 yrs ago, because I am just now digging out from my wife's job loss in 2002. It's been an extremely long road and we've endured it, but everytime I think about it I wished we had just done the BK. The reason I say that is because my brother and his wife did the BK thing last year. Now, he is in the process of buying a new house and they have 2 fairly new cars. Granted they don't have the best interest rates, but they are doing better than most as far as that goes. Had we done a BK about 4-5 yrs ago, we would be fairly well off as far as rebuilding. I'm not, by any stretch of the imagination, saying that is what you should do. I am only sharing my feelings and thoughts. The decision, my friend, is going to have to come from you. There is life after BK. I've witnessed it. It may be mired in creditor woe for awhile, but if you let the bills go here and there, you will be in a similiar boat. If you are drowning now, it's time to bust out the life raft. Know what I mean? I wish you the best of luck and if you need help, of course you can count on us.

P.S. Stay away from the debt settlement. They take your money and don't do anything that you can't do for yourself....

[hawaiiguy]

Welcome! I know your feeling, been there, to the point I didnt deal with it for years, bad choice then, but alot of help from here has made the road back a bit less bumpy.

When I was first faced with not making the payments I looked at the debt settlement route, if you choose to go there, go with a non profit one, however try to stay away from it. You can do a similar thing with the CC companies as well. Call them and say you are having problems, ask for a reduced intrest rate, payment, etc. It might work, might help.

Dont get discouraged!!

[Kalakuta]

Santiago

One of the things I have come to realise over the years as far as dealing with debt and credit issues is that you take a FULL assessment of your situation and address the problems rather than the symptoms; that is, cutting down your expenses. I think it would be a good idea for you to get rid of the car and free up some money. $325 is a lot for car insurance. Heck, that is another car note by itself!!!! Just for the sake of this email, let us assume that your car payment is also $325 which gives you a total of $650 (not including money for gas). If you have 1500 around somewhere, go pick up a honda or kia... You are just going to have to sacrifice certain 'luxuries' for a year or two otherwise things are going to get out of hand.