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Post by Jake on Nov 11, 2004 13:07:33 GMT -5
You're a homeowner who's charged up to the limit on three credit cards. You see no end in sight to paying off your debt, especially since your credit cards carry double-digit interest rates. What should you do?
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Post by 4mirror on Nov 17, 2004 20:08:47 GMT -5
Several possible options to get out of this jam
- File Chapter 11 (Bankruptcy) - Find a creditable bill consolidation service to put all of these debt into one bill with low monthly payment as well as interest. - Find a creditable financial advisor / planner
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Post by Jake on Nov 18, 2004 11:55:45 GMT -5
I totally agree with the last 2 options - consolidating your debt with a lower interest rate and get help from a financial advisor to start paying down your debt. But I would avoid bankruptcy like a Justin Timberlake concert. While individuals are not precluded from using chapter 11 bankruptcy, it is more typically used to reorganize a business. In this case, I think you'd be filing chapter 13. I'm far from an expert on bankruptcy law, so I could be wrong. If anyone else has an opinion please reply. - Jake
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Weon
Cashflow Apprentice
Posts: 31
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Post by Weon on Nov 23, 2004 19:25:16 GMT -5
I might add to this that the first step is ... to analyze my finances and the spending habits to find out what put me in this predicament in the first place, so that I can fix it or prevent it in the future.
Maybe I own a liability that can be sold to pay off some of the debt and eliminate the future expenses on it. Or maybe that liability can be down-graded to or exchanged for something that require less expense to keep.
Maybe I have expenses that can be reduced (perhapse with the help of family or relatives or others who are willing.)
Without this first step, I believe, all the other solutions are temporary at best.
Weon
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Post by kingston on Nov 25, 2004 19:10:11 GMT -5
Well I am on the other side of the spectrum At all cost avoid bankruptcy (mortgage broker's perspective) unless you need to delay foreclosure proceedings. If your at point when bills are up to your neck you need to step outside yourself and reevaluate your spending habits to see where you can save money. While your credit is still good and you haven't been late but you think it is a matter of time before you start to make late payments or no payments if you have a home you need to look at your options and I mean take out a heloc convert your existing mortgage ot interest only or some type of pay option arm to keep your payments at a minimum then use those funds and the money you have been saving from your newfound spending habits and pay your bills. Your bills should be paid in this order smallest balance to largest but also from highest interest rate to the lowest. Borrowers are scared to ask their creditors for extensions make sure you communicate with them. Explain in written context that you are experiencing financial hardship and you will be able to make routine payments in xxx amount of time period. You would be surprised at how well they respond and allow you a grace period. From that time you don't make payments you aggressively use those payments to knock out some of your smaller balances, or balances with high interest rates.
Course of action review debt and spending habits Develop a payment plan Contact your creditors explain your financial situation See how you can manipulate your exisitng mortgage to pay less and focus on other debt
As I stated I am a mortgage consultant so I may have a different perspective but this seems to work for my borrowers and this is specifically what I suggest to them I actually go as far to show them how their budget will work laid out from anywhere from 6-12 months and show them how to get on top their finances again.
I think finances is a matter of self control and manipulation you have to know how to play the game
Okay I think Im done sharing now Just my 2 cents
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tuffat
Cashflow Apprentice
Posts: 10
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Post by tuffat on Mar 6, 2005 10:49:59 GMT -5
I am like everyone esle, take a look at what got you into that debt, cut your cost of dinig out and entertainment.
Second, if you got debt that you can pay off with paying the minimum on your credit cards do that..
Third - have a garage sale, sell some of that stuff you spent using them credit cards.
Fourth - consult a financial planner, consiilidate the credit cards.
Last but least, avoid bankruptcy
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Post by accounting on Jan 1, 2008 6:54:34 GMT -5
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