Hello. Help please?

[cbinpa]

What is the name of your state (only U.S. law)? PA
Hello, I need some help. I have $33,000 in credit card debt. I am currently up to date on everything but that will become harder to do soon. Is the right thing to do let the payments go over due, build as much money as I can in savings and then try to settle with them with the help of a lawyer?

 

[Proserpina]

What is the name of your state (only U.S. law)? PA
Hello, I need some help. I have $33,000 in credit card debt. I am currently up to date on everything but that will become harder to do soon. Is the right thing to do let the payments go over due, build as much money as I can in savings and then try to settle with them with the help of a lawyer?

This really isn't so much a legal question than one of financial planning.

It's really up to you.

 

[Ohiogal]

What is the name of your state (only U.S. law)? PA
Hello, I need some help. I have $33,000 in credit card debt. I am currently up to date on everything but that will become harder to do soon. Is the right thing to do let the payments go over due, build as much money as I can in savings and then try to settle with them with the help of a lawyer?

Legally you are supposed to pay according to your contract. So since this is a legal site, the right thing to do is to pay according to your contract.

 

[cbinpa]

This really isn't so much a legal question than one of financial planning.

It's really up to you.

Okay, thank you. It is a valid option though right? I just want to make sure the lawyer I contacted is telling me something that can legally be done.

 

[Ohiogal]

Okay, thank you. It is a valid option though right? I just want to make sure the lawyer I contacted is telling me something that can legally be done.

How badly do you want to tank your credit? And the credit card company can sue you for the full amount you owe and get a judgment for the full amount. Nothing says they have to settle for pennies on the dollar.

 

[cbinpa]

Okay, thank you. It is a valid option though right? I just want to make sure the lawyer I contacted is telling me something that can legally be done.

I know the "right" thing to do. The right thing to do was never to get myself in this situation in the first place. Unfortunately there will come a time when I can not pay according to my contract. Thank you all though.

 

[cbinpa]

How badly do you want to tank your credit? And the credit card company can sue you for the full amount you owe and get a judgment for the full amount. Nothing says they have to settle for pennies on the dollar.

I can take the credit hit, that is something I know is coming. I'm not looking for pennies on the dollar at all. I just don't want to pay $150,000 (?) for it over 30 years. Is that not worse in the long run for me?

 

[TigerD]

I can take the credit hit, that is something I know is coming. I'm not looking for pennies on the dollar at all. I just don't want to pay $150,000 (?) for it over 30 years. Is that not worse in the long run for me?

Your proposal to pay an attorney to "settle" your credit debt is the exact wrong thing to do. If you take that option, you will be filing bankruptcy within 2 years. Better to pay the cards.

For sound budgeting education try Dave Ramsey.
For an understanding of money and why you are in your situation, as well as, a path out of it - read The Richest Man in Babylon by Clausen.

DC

 

[bdancer]

What is the name of your state (only U.S. law)? PA
Hello, I need some help. I have $33,000 in credit card debt. I am currently up to date on everything but that will become harder to do soon. Is the right thing to do let the payments go over due, build as much money as I can in savings and then try to settle with them with the help of a lawyer?

Forget hiring an attorney to settle the credit cards. Debt settlement companies tend to be scams -- they do a great job of taking your money and not paying the credit cards. Not only will your credit be trashed but, the credit cards will be suing you.

Instead you should contact a NFCC credit counseling service: http://www.nfcc.org/. These are legit, non-profit companies that offer debt management programs for a nominal fee. They negotiate lower interest and payments so that you can pay off the credit cards. When you complete the program, you will have decent credit.

The site also has an excellent budget worksheet.

 

[Jeran]

Your proposal to pay an attorney to "settle" your credit debt is the exact wrong thing to do. If you take that option, you will be filing bankruptcy within 2 years. Better to pay the cards.

For sound budgeting education try Dave Ramsey.
For an understanding of money and why you are in your situation, as well as, a path out of it - read The Richest Man in Babylon by Clausen.

DC

I agree with debtcollector on this one, to some extent.

Settling credit card debt is usually not the way to go. The amount of debt "forgiven" by the credit card companies will appear in your mailbox next year as a 1099-C form, and you may owe federal taxes on it.

The best way to go with such a huge amount of debt when, according to the original poster, he or she can no longer afford to pay it, is to go ahead and look into filing bankruptcy now.

Most reputable bankruptcy attorneys will give you one free initial consultation about your debt and your bankruptcy options. Go see a few of them, and see if bankruptcy might be the right choice for you in this situation.

If you can't afford a bankruptcy attorney and if you have little or no assets to protect, you might consider filing bankruptcy "pro se" (or by yourself using the free forms provided by the federal bankruptcy court in your area).

 

[TigerD]

I agree with debtcollector on this one, to some extent.

Settling credit card debt is usually not the way to go. The amount of debt "forgiven" by the credit card companies will appear in your mailbox next year as a 1099-C form, and you may owe federal taxes on it.

The best way to go with such a huge amount of debt when, according to the original poster, he or she can no longer afford to pay it, is to go ahead and look into filing bankruptcy now.

Most reputable bankruptcy attorneys will give you one free initial consultation about your debt and your bankruptcy options. Go see a few of them, and see if bankruptcy might be the right choice for you in this situation.

If you can't afford a bankruptcy attorney and if you have little or no assets to protect, you might consider filing bankruptcy "pro se" (or by yourself using the free forms provided by the federal bankruptcy court in your area).

Bankruptcy is an option, but $30 - 40,000 isn't really a huge amount of debt.
I would strongly discourage someone from filing BK pro se. There are legal aid organizations and other avenues. It is too complicated for someone without experience and specific education to undertake without undue risk.

DC

 

[Jeran]

I know the "right" thing to do. The right thing to do was never to get myself in this situation in the first place. Unfortunately there will come a time when I can not pay according to my contract. Thank you all though.

See? What I am saying here is that this person is not going to be able to afford to pay back these cards, and soon they will be in default, with the default interest rate, plus late fees, over-limit fees, etc., mounting up, and in that case, $33000 is a lot of money for this person to attempt to pay back.

In a situation like this, bankruptcy is fine, but to cbinpa, learn from this mistake so you never get into trouble with credit cards again. If you get any credit cards in the future, make sure you spend no more on them each month than you can afford to pay off in full at the end of the month. That's what I do now.