Unemployed - No funds left, 2 credit cards left unpaid...

[Looking_4_Answers]

Hi everyone - I will make this as short and sweet to gather some ideas on how to proceed in the very uncertain future...

 

My unemployment was terminated earlier this year, my bank account was just drained officially with perhaps 4-8 weeks in reserve for the most BASIC necessary living costs, and I have zero other options I haven't already tried (I sold my car, collectibles on Craig's List, cashed in my 401(k) at a massive 40% penalty/loss etc etc over the the last two years - and even with my obsessive resume sending I now for the FIRST time in my life have no prospects or finances whatsoever). I am actually surprised I "lasted" this long with no consistent income - but that's in the past now, and the future is of course pretty bleak at the moment.

 

I have always (literally, ALWAYS) had a ridiculous Fico score that at many times over the last 10-15 years exceeded 800, it was always a cake-walk for me since my first credit card in high-school to apply for any loan imaginable -- but, I suppose none of that matters now... sadly. I have YET to miss a payment on ANYTHING - but this is the end, I am 101% certain after going over the numbers over and over. I am done, and have cancelled all of my "Auto Pays."

 

My main point for this post and joining the Forums... is WHAT DO I DO NOW, and HOW BAD WILL IT HURT ME?

 

1. I have just enough finances left at this point to keep my house and get groceries for another month or two at the most

2. I was able through very hard work and sacrifice over the last 2 years to pay off ALL of my credit cards, except for two (Citi Bank and Bank of America). Even though after cashing in my 401(k), selling my car, and selling everything I had that was of any value on Craig's List etc... I was able to pay off nearly $20,000 in credit cards, BUT, I still have $17,000 on Bank of America and $2,600 on Citi Bank's card - two years of zero income with food, mortgage, electric, gas etc etc etc REALLY adds up when you go from 50 hours a week to ZERO.

 

So my ultimate question is: Since I have no ability to pay these cards, what do I do, and how bad will it affect me in the future (since although this seems so hopeless, it can't last forever)? Will I be totally screwed out of a mortgage or car loan for all of eternity, or for the next 7 years... or 7 years from the point my card(s) go into "collection" phase after I haven't paid them for 3-6 months in a row? Or - if by some ridiculous miracle I'm able to find work very soon, would it benefit me to ask for a "settlement" from my card companies (or is that just as bad on my credit score anyway, and I might as well save the meager money I have)?

THANK YOU so much for ANY thoughts, insights, and direction. The hard part is knowing I have OBSESSED for more than a decade over timely and even early payments on EVERYTHING from cell phone to utilities, and I was so proud when six years ago I bought my first home and saw I had over an 800 credit score - but, this is now, and I have to face reality - but I'm just not sure if there are any options or choices I have no entertained or exhausted? Thanks again!

[willingtocope]

Monday...call a couple of bankruptcy lawyers...most will give a free consultation...see what your options are for your state.  You will almost certainly qualify for a BK 7, which will make your remaining debts  go away.

 

The BK will stay on your credit reports for 10 yrs...but, once you get a job, you will qualify for a mortgage after 2.

 

Its admirable that you've paid off what you have, but...itts time to stop and use your remaining resources to keep a roof over your head and feed your family.

 

I sympathize...been there, done that...had the IRS after me for taxes on my 401k early withdrawals...took me 3 yrs to find work.

 

A lawyer is going to want about $1800 before they'll file the paperwork.  If you're up to it, NOLO Press has some excellent books on how to do it yourself.

[Credator]

Options that come to mind:
Filing BK 7.
Fight collections/lawsuits when they occur including suing/settling FDCPA and other statutory violation$.
Send a cease and desist letter when collection calls start and then ignore it all, including lawsuits.
Variations of fighting some things and ignoring others.
 
The education that my fighting (out of necessity) has provided me is amazing and invaluable to me. YMMV
Most of my adult life included a FICO north of 700. I now believe that if I have a choice between a good credit score and livable cash flow I will always pick the cash flow.
 
If foreclosure is likely headed your way then the skills, thick skin, and ability to discern the truth acquired while battling the alleged unsecured creditors will be most beneficial IMHO.
 
There are choices available even when things seem dark. If I had sufficient cashflow to pay the monthly freight I would have no concern about my ability to buy a nice home with a garbage FICO score. Homes are bought every day without a bank involved. As I recall the last numbers I saw indicated 1/3 of the homes in the U.S. do not have a mortgage on them. A car purchase with a trashed FICO might need to be a used one for cash or save up for a while if a new one is required. A trashed credit score is not the end of the world. A collector calling or mailing dunning letters is not the end of the world. A BK isn't the end of the world. A summons isn't the end of the world. Unless, perhaps, a spouse is convinced it is. But it really isn't.

 

I'd consult with more than one BK attorney and do so with an open mind on what the alternatives are and determine if BK is the best option for me. I would also want to discuss with the BK attorney about staying in my house as long as feasible if it is headed for foreclosure. Filing a BK after the foreclosure process has moved along a bit and a collection suit that has been or is about to be filed may keep a roof over my head longer than filing a BK next week.

 

BK is not an easy button IMO. There are no easy buttons that I have found.

 

Prioritize taking care of you and yours and do not beat yourself up for any mistakes you have made or will make. Someone here has been through the same or worse. I know I have been through too much of it. I just try to do the best I can.

 

Oh, and I personally would not spend a dime of the family food budget on a mortgage payment.

 

Your family are your "shareholders". Take care of them come hell or high-water and no matter who screams and cusses. The same applies even if a "family" has only one member.

[TomnTex]

Until you file BK the bad news is that your not judgement proof. But the good news is your collection proof. Just remember, if you can't afford an attorney you can do it yoursel with help from the board. As others have said, take care of your family, don't sweat the small stuff this too will pass and one day you will be on your feet again. God takes care of those that need his help, he will help you too.

[racecar]

My unemployment was terminated

 

Don't sit at home and deplete your resources get out a take a lesser paying job.

You will lose everything that you worked for. 

If you have to apply at a Mcdonalds.

Then send the banks a letter to see if you can enter into a hardship program.

In your post you said My unemployment was terminated get employed somewhere take any job.

You can always get a better one later.

Bankruptcy is not the answer right now getting a job is the answer to the problem.

You sold your car take the bus or a cab get some applications filled out.

[admin]

@Looking_4_Answers - I think filing a BK is not a bad option.  

[CordusAdmin]

@Looking_4_Answers - I can totally sympathize with you!  My husband and I owned a thriving business, had over $900K in the bank, a beautiful house, cars, etc - and then the economy took a turn for the worst.  We lost our business, all of our savings, our house, cars repo'd, sold all we could on Craigs list.  Loosing our business meant no work and mounds of debt.  We filed Ch7 which has finally gotten discharged after 5 years of court battling.  

 

My point is - It is not easy going from where you were to where you are now but it will get better!  CH 7 is there for a reason, to help those of us who need it.  Take steps to erase the debt and start again.  It is not easy but you will get back to where you once were....keep a positive attitude.  I always tell my husband - stuff you can always buy but you can't buy health, happiness, family and friends.  

[gwheelock915]

@lionhunter proof that you can lose everything, go through hell and come back!

[racecar]

You can buy friends

[kutuzov]

You can buy friends

 

 

Nope, you can buy temporary friends, real friends I count them with the fingers of one of my hands.