Advice needed for my sister

[bermaster]

I have used this site for several years to help get my credit in shape. Things are finally looking good for me but I recently found out that my younger sister has burried herself in debt, has no means to pay it right now, and has no where to turn for help. Here is the basic information.

My sister is 20 years old. For good (but private) reasons, she has racked up over $10,000 in credit card bills scattered across about 6 cards (AMEX, Visa and store cards). She is currently in college (and will be for at least 2 more years) and works as much as she possibly can while being a fulltime student but with rent and utilities, making the payments required is out of the question. She is currently ranging from 60-90 days late on almost all her cards with none charged off yet (suprisingly). Her minimums are through the roof because of late payments and credit line overages. For example, she has a minimum payment that is $1300 (Chase). Any advice would be great.

Note: I am aware that she got herself into this and that it was bad judgement, but at this point, instead of being upset with her, I am just trying to be a good big brother and do what I can to set her on a path to repair (if possible). Any help would be much appreciated. Thanks.

[razr]

First step is to call the creditors and ask for help. They should send her to a "hardship" department. The first person you talk to probably won't be able to help, be persistent. She should continue to make whatever payments she can afford. DO NOT LET THE ACCOUNTS DEFAULT. $10K is a lot of money for a college student, but in the grand scheme of things, it's not that bad at all.

Credit card companies loan to students knowing full well they have no means in which to repay, they expect the family will help out.

-r

[Olisellana]

I have used this site for several years to help get my credit in shape. Things are finally looking good for me but I recently found out that my younger sister has burried herself in debt, has no means to pay it right now, and has no where to turn for help. Here is the basic information.

My sister is 20 years old. For good (but private) reasons, she has racked up over $10,000 in credit card bills scattered across about 6 cards (AMEX, Visa and store cards). She is currently in college (and will be for at least 2 more years) and works as much as she possibly can while being a fulltime student but with rent and utilities, making the payments required is out of the question. She is currently ranging from 60-90 days late on almost all her cards with none charged off yet (suprisingly). Her minimums are through the roof because of late payments and credit line overages. For example, she has a minimum payment that is $1300 (Chase). Any advice would be great.

Note: I am aware that she got herself into this and that it was bad judgement, but at this point, instead of being upset with her, I am just trying to be a good big brother and do what I can to set her on a path to repair (if possible). Any help would be much appreciated. Thanks.

Well if they haven't gone to collections or anything, I would start taking to the Creditors you don't want it to go to collections. If it does go to collections they will probably offer her a settlement overtime however, you have to remember to have it written prior to payment that they will take it off the credit report before she pays it. (which even in this case is very hard and most of the time impossible) Has she gotten her Credit report and checked it for errors? These are the first steps she should do.

She has 6 cards you say. the first step I would do is call each one find out the interest rate and find out how much is owed. Take the largest interest rate and balance and just start putting as much as I can on it forgetting the other 5 cards as she has already missed 3 payments on each. As soon as you get it paid off just put that same amount of money to the next card until they are all paid off.

I have a really good budget spread sheet I could send you in e-mail if you want to give me your e-mail address however, please do it through PM that way it is secret from everyone else. It works really well and accounts for everything. What you do is put how much you make that month and then what you spend that year and it gives you a complete break down of what you need to do and what you don't need to do.

[LeslieR]

Since she is enrolled as a full time student, she could consider using student loans to get ahead on these debts. I normally would not suggest that, but I think it's a better idea than letting these accounts default. However, she has to take a good look at the reality of her situation - what is she going to school for, what is her earning potential with the degree she plans to earn, is she on track to completing this degree, how much is she already borrowing to pay for her education.........etc.

I don't like to suggest that she incur a new debt to cover an old debt, but at least the loans would be in deferment until she is in a position to pay (with job and degree). But realize that being in a position to pay doesn't mean she'll suddenly be responsible and do it. She has to make that commitment and understand the seriousness of this.

Putting my flameproof suit on now.......it's just an option.......but has to be considered and exercised very responsibly.

[Olisellana]

Since she is enrolled as a full time student, she could consider using student loans to get ahead on these debts. I normally would not suggest that, but I think it's a better idea than letting these accounts default. However, she has to take a good look at the reality of her situation - what is she going to school for, what is her earning potential with the degree she plans to earn, is she on track to completing this degree, how much is she already borrowing to pay for her education.........etc.

I don't like to suggest that she incur a new debt to cover an old debt, but at least the loans would be in deferment until she is in a position to pay (with job and degree).

Putting my flameproof suit on now.......it's just an option.......but has to be considered and exercised very responsibly.

This actually isn't a bad idea if she can afford to do this, and if she knows she can make the payment for the loan instead. it would be like Debt Consolidation however, you don't want to default on that for sure.

[LeslieR]

however, you don't want to default on that for sure.

THAT'S FOR SURE.