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     | Friday, December 08, 2000 - 11:13 am  Some really good info in here. I wonder if someone could offer some advice specific to my problem. I make decent money. My main goal is to get out of debt in 2 years. Unsecured debt: 3 cards totaling $18K. Secured debt: GMAC car worth $10k owe $14K would love to get out from underneath and A house which I rent out that I have about $10K equity. I have contacted Kentucky Law Firm and Consumers First about settlement/consolidation. COnsolidation ("consumers first") said that they could get me a interest rate of 9% on the full amount owed (which seems good since I did actually spend the money). Would this arrangement hurt my credit? I tried to sell my house for 10 mos. No luck so now I am renting it out at a 75$/mo profit. Can I barter with the CC companies to reduce my principal or is a lawyer necessary. I am not behind on any of my payments. I have been late here and there, but its more b/c of laziness than anything else. What is the best way to get rid of my car? Can I sell and continue to pay monthly on the difference? I pay $406/mo, but my insurance is outrageous ($180/mo) I am ready for a beater again. Should I get a home equity loan? Anything over 80% of principal is 15% interest. HelllllllllP!
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| | Friday, December 08, 2000 - 11:54 am Someone here will give you good advice soon, I am sure. In the mean time, do not sign up for any of these "Counseling" services they will destroy your credit! Run a CCCS look through Christine's search engine to get the nitty gritty on that.
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| | Friday, December 08, 2000 - 04:57 pm With regards to your car, it seems youre stuck, just like I am. I have a car thats worth $1600, and I owe $4700. You need a title to sell the car, which means the loan has to be paid off, or assumed by another lender. One out is if you can sell it, and make up the difference in cash to pay off the loan. Another way would be to try and sell the car for say, $1000 and have the new owner take over payments. Pesonally, Ive never heard of any bank that will let you sell the car, and let you continue to make payments on something you no longer posess. But if you find one, please let me know!! Good Luck
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| | Tuesday, December 12, 2000 - 06:05 am It is hard to imagine a situation where a home equity loan is ever good, but that depends on what your personal priorities are. The average person would consider it a priority to pocket the $10,000 in home equity, rather than use the money to pay credit card debt. I am an average person. Even if you get a loan at 125% of value, you probably will not get enough, especially after 2nd mortgage closing costs (however small), to pay off all $18,000 in credit cards. But your priority might be to get the warm fuzzy feeling of paying the debt. A reduction of interest to 9% is not such a great deal. You could do better on your own. I routinely see creditors offer to reduce the PRINCIPAL significantly and eliminate interest completely. The creditors fear that if they do not cut a deal then the person will file bankruptcy, and they will get nothing. You can get this relief on your own. If they pull a copy of your credit report for an account maintenance or review, they might reasonably perceive a possibilty that you must file bnk, and might jump at the chance to get money before then. Of course, if they discount the debt, there might be a tax liability for the forgiven debt. If enough creditors drop the principal and provide binding documentary proof of such, then a home equity loan might be enough to pay it. I am oppose the equity loan. Ask these nice people here about bankruptcy and the surprising impact on credit.
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| | Tuesday, December 12, 2000 - 02:02 pm I don't know who Consumers First is but Michael should read What's wrong with CCCS? The car situation is very unfortunate, and so common. Selling to someone who takes over the payments is quite risky, unless it's a "formal" assumption, i.e. the lender moves the liability from the seller to the buyer. Nobody would formally assume the payments since the car is worth less than owed, so that leaves people who can't get a loan and HAVE to go this route. Obviously, they're likely to default. Since the house is a rental, I doubt that an equity loan is possible at all. I think Mitch is right about negotiating and discounting the debts. I do think that a call from a bankruptcy attorney is MOST helpful because the creditors will think you'll discharge if they don't negotiate. HOWEVER, most attorneys don't have a clue about the importance of the credit reporting (Mitch is a VERY rare exception) so be careful who you deal with. Accounts reported as "settled" are pretty bad. Ch. 7? $18K doesn't sound like a whole lot, but you could get rid of the car that way too. I don't have a recommendation for Michael because there is so much I don't know. I haven't seen the credit reports, income, budget ...
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| | Tuesday, December 12, 2000 - 04:48 pm I have never been able to get a creditor or collection agency to list the debt as paid as agreed instead of settled for less than amount owed (or whatever it says) - account closed. Oh well...
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| | Saturday, December 16, 2000 - 05:57 am Thanks for the info. SInce I last wrote I have actually been laid off. Doh! The automotive industry can be so turbulent. I got a 3 mos. severance deal so I should be fine. I can see that CCCS aren't the way to go. My next bet is a Lawyer. CHristine, here is a little more info. $2800/mo take home. $406 $180 car & ins $650 rent $50 phone $200 food ~$500 for 3 cards and up until yesterday I had a corporate card that had to be paid off every month, but I also had personal charges on there. Consistently a month behind. NExt month I owe $800 on it and then it will paid off. How soon could I expect to get a mortgage loan after bankruptcy?
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| | Saturday, December 16, 2000 - 06:51 am Two years.
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| | Monday, December 18, 2000 - 04:35 pm Michael, I recommend you see a bankruptcy attorney, do a *complete* budge, find out about the exemptions in YOUR State and other requirements. Also, read Snag in ch7 meeting of creditors... and Bankruptcy Reform In the best case scenario you could buy a car with some of the severance pay, and after selling expenses there would be no proceeds from your rental, so you could keep it too. You need some good advice fast. Please let us know what you find out!
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