We're in huge debt, should we start over?

Question

We're at a point of bailing out and starting over because of our financial situation, but not sure if it will cause more stress down the road. We started a trucking business 2 yrs ago that went under and left us with $100k in personal credit card debt. Our mortgage is $2900 and going up to $3500 in 2 yrs.. We owe more than the house is worth so are thinking of doing a short sale or deed in lieu of forclosure and rent a cheaper place until the CC debt is paid off. I have thought of doing a debt relief program, but not decided because of the bad things I read about it. My credit is still high because I pay everything on time, but not able to pay much more than the minimum so not getting anywhere. I feel like I'm throwing money away on this house and would like to get out of it and have some breathing room to start over. Has anyone actually done this and how has it effected you? Do you think it is worth ruining great credit to be able to have a life again?

Thanks for any advice

Answer 1

Hey not every program ruin your credit. There are some debt consolidation program such as debt consolidation loan which help improve your credit as the subsequent payment made are towards new loan.

Thus it depends upon the situation of an individual, amount of debts and available income. You can contact a debt consolidation company and then can guide you. As through this you can consolidate all your different debts into one single payment and can also reduce the amount of debts.

Here is the source of a debt consolidation company named http://ezconsolidation.com for your reference.

Answer 2

Back in 2001 I had to move home to Oklahoma due to my Mothers health, this caused my ex and I to get a divorce and we filed for bankruptcy.

In just 1-year i bought a new car with no money down at 3.9% through Ford because I had a loan with them that I reaffirmed on.

In just 1 year later I bought a new home again with no money down at a fixed 6.5% rate.

Today my scores are all over 750 and I can get approved for anything I want at the very best rates even though my BK still shows on my credit report.

I agree with the first poster, life is to short to let debt ruin you health and happyness.

Answer 3

I have one of my friend had to file for bankrupt for the amount of  $419k  in 05 due to major business lost.

just last week he closed deal to buy a new home.

with 10% down payment.

do not kill your self of debt.

your health, your happiness,and your family  are the most important keys in your life not your credit.

you are in very bad situation . do not waste your hard earring money.

save it you and to your family .

life is too short to effect your life due to ugly debt.

best luck to you.

Answer 4

To quality to file for  Chapter 7, which discharges most debt like credit card debt, you have to pass a "means" test...where your income must be below the average for your state. Most BK attorneys offer free consultation, so you can see if you qualify to file for Chapter 7.

If you use a debt settlement firm, they will deliberately allow your accounts to go into default (read: ruin your credit) to put them into a position to negotiate settlements.....usually in the 50% range.....This process can be unpredictable. Your creditors are under no obligation whatsoever to accept any settlement from any firm you might hire...they might respond by taking you to court to get a judgment against you.

Answer 5

"Do you think it is worth ruining great credit to be able to have a life again?"  

--  Look what your great credit has gotten you so far.

One piece of info you left out: What is your current monthly income?

Here's my advice:

Step 1) You have an adjustible rate mortgage.

Refinance to a fixed rate, or sell the house, like yesterday.

A "deed in lieu of foreclosure" won't help if you're upside down, because they can still come after you for the rest.

If you can get them to approve a short-sale, do it.

Step 2) You need to hold the mother of all garage sales.

If you owe money on a car, sell it too.

Sell so much stuff the kids think they're next.

Live like no one else.

If broke people are making fun of how frugal you've become, you're probably on the right track.

Step 3) Move into the cheapest housing you can suffer through.

Step 4) It's time to draw a line in the sand.

"I swear, from this moment forward, I will never borrow money again.  From anybody."

Step 5) You need a detailed written budget every month.

Every single dollar that you'll bring in next month needs to be spent on paper this month.

Step 6) Once you have the budget, and you can find some ammo to attack the debts with, here's the plan of attack:  It's called Dave Ramsey's "Baby Steps"

"How do you eat an elephant?  One bite at a time."

Baby Step 0) Get current on all your debts.

Just pay the minimums for now.

Baby Step 1) Get $1,000 cash saved.

It's a little emergency fund, for little emergencies (broken transmission, etc.)

The best place to put the money is in a $5 picture frame.

Ten $100 bills, and a sign that says "in case of emergency, break glass"

Baby Step 2) The debt snowball.

List out every debt you have, from smallest to largest, except for the mortgage.  

Just pay the minimum on that throughout this step.

Pay the minimums on everything.

Then put every dollar you can squeeze out of the budget toward the smallest debt.

When you get finished with the smallest debt, you can then put that debt's minimum payment, plus the money you used on that, plus the second-smallest debt's minimum all together into a big payment to attack the second-smallest debt.

As you make progress, the snowball turns into an avalanche in which you bury the debts.

When you finish, you can call into The Dave Ramsey Show, and scream at the top of your lungs "I'M DEBT-FREEEEEE!!!!"

Baby Step 3) Finish the emergency fund.

You want 6 months expenses covered with cash in the bank.

Baby Step 4) Now you can invest.  15% into a Roth IRA/401K/comination of the two.

Baby Step 5) Kid's college fund.  $2,000/year into an ESA, and let it grow.

Baby Step 6) Pay off the mortgage.

They say the grass on the lawn feels different when it's yours.

Baby Step 7) Live like no one else.

Answer 6

unless you win the lottery or make a lot of money soon, your finances are not going to get better. Bankruptcy is a good viable option for you. I would actually try to get one of you removed from all the accounts so only one person files for bankruptcy if possible. You will have to talk to your lawyer though.

Answer 7

jen2001, Debt relief is a common problem many americans are now experiencing. All legitamate debt relief service providers will consult with you for free. http://www.debtreliefreview.com Try visiting serveral debt relief services and inquire about your questions and compare thier answers. You should be able to tell which ones are providing useful advice.



Hope everything works out.