Can you help me with my desperate credit card situation?

Question

Okay, I know everyone will say that I shouldn't cash in my IRA to pay my credit card debt, but I am DESPERATE. I have lost $3000 on my IRA anyway in the last 6 months.

I am on my own -- I have $20,000 in credit card debt and about that much in my IRA. I realize it won't pay it off with all the fees they charge when you cash in your IRA.

I own a home, but it's at 5.25% and the mortgage is probably lower than what rent would cost. I could sell the home and pay off the debt, but I'm afraid with my very low "self-employment"' income, I wouldn't even qualify to buy a smaller condo or anything.

I am having panick attacks because of this and I feel if I could pay off at least half of the debt, I could get myself together and be able to afford to pay the rest of it down. Any advice?

Answer 1

first of all stop spending money you dont have , second get another job , making a little self employment income isnt going to cut it , dont cash in your IRA you will lose your azz in penalties and taxes , keep your home  

Answer 2

STOP using your credit cards to pay utilities and monthly bills.  You will never get out of debt if you continue to live beyond your means, which is what you are doing.

Answer 3

Hi,

Wow, that's a really big problem!  but i think there are some things you can do to lessen the impact of your credit card debt.  Although I havent had problems like yours, I've written about credit card debt problems in my work.  So i hope these will help.

1.  Look for a reputable debt consolidation company in your area.  These companies will consolidate your debts into one bank and help you negotiate with the credit card company as to your repayment plan, credit risk, interest rates, etc.  Negotiate for the best terms though, try to consolidate your debts into a loan with a lower interest rate.

2.  Talk to your credit card company.  I know this might look like a simple advice but credit card companies jacks up the interest rates on your loans every time you miss a payment.  In time, they will transfer your credit card debts to a debt collection company which will charge you even higher rates.

By talking to your credit card company and telling them about your repayment capacity up front, they will know that at least you still have plans on paying them back.  Negotiate for a repayment schedule that you are sure you can follow and ask for lower interest rates so that it becomes a lot more probable for you to pay them back what you owe.  

You will be surprised to find out that most banks are amenable to this solution (after all, having to go legal is a much more time consuming and expensive process for them).  They can also advice you on what to do as they probably have lots of these cases before.

3.  Any chance that you can refinance your mortgage loan?  if you are nearing the end of your house mortgage, then maybe you can apply for a remortgage loan from your bank.  This will not only give you some cash but may also lower your mortgage interest rates on your refinance.  

4.  You can also check around for credit card consolidation opportunities.  There are credit card companies that allows you to transfer debts from another credit card to theirs.  Although this might give you some time.  Do try to find a credit card consolidation program where you'll have to pay lower interest rates.

Through all of these, try to gather as much evidence as you can on your credibility as a debtor.  This is to increase your credit score and thus lower the credit risk associated with you.  I hope you have a good record of paying your mortgage payments on time as this will help you much in convincing banks that you never run away from your debts.  

If by self employment, you mean you work online, I hope you have an Ebay account as you can also use your seller/buyer rating to improve your credit standing.

Try to read as much on this subject as you can as there are lots of other options i havent discussed here.  Ezinearticles.com should be a good place to start on looking for more alternatives.  You can also just Google "debt consolidation" or "credit card consolidation" tips.

Remember, information will be your greatest ally here and may make the difference between you getting stuck with that $20,000 debt because of high interest rates or enable you to find a practical and doable repayment program.

Goodluck!

OCS

www.onlinecreativesolutions.com

Answer 4

You may not like my answer but believe me cash is king

always buy in cash i burned all my credit cards two years

ago and i am doing fine . . . how ever if you need tips :

http://www.flixya.com/blog/GOLDCash360/1...

Good Luck Buddy

Answer 5

It sounds like you haven't got enough income for your outgo. You need to stabize your income first. Since you have structured your debts, you can make minimum payments until you have more income. If you can consolidate your loans, this will simplify things. The less stress the better.

Another method that you can use is find a self directed IRA which will allow you make a distribution on a temporary basis and which you can use for a short term (60days). One such company is Equity Trust Company in Ohio. Some people may think that they can invest their money and get a higher rate of return than your bank's IRA savings account.  A self directed IRA can do that for you.

Last thought - once you have consolidated everything and you have more income than outgo, you may consider an accelerated mortgage program called the money merge account. This will allow you to pay off your mortgage in a fraction of the time using the money that you now place in your checking and savings accounts. For some people this is controversial and other people think this is a God sent program. This is not for everyone. The software costs money.  

Answer 6

I think someone said this before....do not spend the money you don't have. Why would you spend money that is not yours? I am a broke *** college student and the little money I make helps me out for food and gas and other little bills... I barely use my credit cards....and when i use them it is because I know that i HAVE (not think that i will have)the money to pay them back...It is a problem to get into so much debt... I know someone who in one month got into a $10,000 credit card debt... buying bullcrap...