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Have you ever walked away from your CC debt?

I typed out a whole thesis sharing with you my own experience, it just went poof, argh...

Kewpoo, you will and can get over this, even though it may be overwhelming and seems hopeless at this time. We all make financial blunders and/or have had misfortunes that put us in financial binds, you will come out much stronger and better person, I did.
 
I think it's brave of you to post about it, and I think at least you're smart enough to know when you are in over your head. So many people just keep borrowing and borrowing from Peter to pay Paul and make it so much worse. At least you have realized there is a situation and trying to figure out what to do about it. :huggy:
 
I'm glad she had enough balls to even ask the question online. Most of the time people that owe for frivolous spending are the people that boast about "F'ing them!"

From my experience people that feel bad about being painted in a corner are the ones that truly feel horrible and rarely let themselves ever get back to that spot in the future.

Being behind the 8 ball is never fun. I just hope you find a way out and learn from it.
 
with this thread being brought up, it is the 1st time I saw. Wondering how you are doing?

I don't know the ins and outs, but if there is a way to defer student loans I would do that...the interest rates on those are small compared to CC rates. Defer that for awhile to pay down the CC debt since those are at such higher rates.

hope you have found some answers and are taking care of yourself!
 
Barb09 said:
I don't think she is asking if it is ok to not pay for things she purchased....I think she is asking what the consequences of doing so can be.

I put SOME blame on the damned credit companies....they hand those cards out to KIDS like they are Halloween candy!!! Emmalee was offered applications at her college welcome fair. Ummmm....18-19 yos going to school don't have much money to pay off Mastercard.....so, why offer them $1000 in credit??? Cause they can't pay it off at the end of the month and they can nickel and dime them and get thousands of $$s in interest on that $1000....

I think the entire system should be revamped and more responsible money handling education should be given in high school.

Some ruin their credit score by 20 :-(
Click to expand...

IMHO, No excuse for abusing credit :pout:, I hate the "college students are REALLY STUPID" excuse many give. A long time ago, not so far away (longtime) I got my 1st card while in college. Never missed a full balance payment, but then again would never have put more than $50 a month on it even starting with only $1000 in credit. If you are responsible, you make it work. Personal responsibility. I guess some high school students need "money handling education", but its mostly common sense anyway :).
 
chgobob33 said:
Sorry, IMHO, NO excuse for abusing credit :pout:, I SO hate the college students are REALLY STUPID excuse! A long time ago, not so far away (longtime) I got my 1st card while in college. Never missed a full balance payment. If you are responsible, you make it work, borrow from Mommy/Barb and if that can't happen don't use it! I guess they need money education, but its common sense mostly.
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Technically it is not abuse to carry a balance. That is what is expected. I am sure that how most of us pay off the card and use it to get the rewards is what constitutes abuse in this industry.
 
wcjost said:
with this thread being brought up, it is the 1st time I saw. Wondering how you are doing?

I don't know the ins and outs, but if there is a way to defer student loans I would do that...the interest rates on those are small compared to CC rates. Defer that for awhile to pay down the CC debt since those are at such higher rates.

hope you have found some answers and are taking care of yourself!
Click to expand...

Thanks for asking! :) I NEVER intended to walk away from it...just was asking what would happen if I did...still paying minimums and trying to cut bills in other ways. i.e.-asking for discounts etc. on things I can't get out of like my DIRECTV which has a contract....Going to just try to keep paying 'em down and see what I can do to build an emergency fund.
 
Just want to thank OP and everyone for this thread - I always love how peeps here are so willing to share their lives, opinions and ideas. Hoping for a positive outcome for you OP! DH and I are very conservative financially (no credit card debt, no car payments, etc), but I never imagined that we would find ourselves in the position of having to go through a short-sale last year. The biggest lesson I learned from that? Go ahead and give advice and share opinions, but try not to judge others (although it can be tough not to sometimes) :) Seems like you are taking this decision very seriously and have not carelessly put yourself into this position. Best of luck
 
mrs.melton08 said:
I Understand. But if it comes down to having everything taken from you for not paying the things you can't postpone, if the loans can be deferred I would start there first. BUT I am not living in your shoes right now, just wanted to give some advice.

Taxwise, do you all get a refund regularly? Can you plan ahead a little to pay off some things with the refund.


Other than that I just know from many clients i have worked with that they will and can take your home, car and clear out your bank accounts if you don't pay. Plus you have to go to court and explain why you coudn't pay, you CAN NOT get around that, they will issue a warrant for you.
Click to expand...


Now granted, DH and I, like mrsmom said were "only" in about 2.5-3K in debt, but that is how we handled it -- our refund last year was planned pretty much to the penny for paying off debt. We also do not own our car and we do not own property - so losing those things were not of concern, but we just took it as we could... its all you can do. Our credit ratings aren't great, and we still have one bill each that's in collections to pay off, but we're almost out of it.

Best of luck to you. and i know it's hard, probably harder than i realize, but try not to let it destroy you. you'll make yourself sick and miserable. Prayers coming your way as you try to pull yourself out.

:hug:
 
kewpon addict said:
Thanks for asking! :) I NEVER intended to walk away from it...just was asking what would happen if I did...still paying minimums and trying to cut bills in other ways. i.e.-asking for discounts etc. on things I can't get out of like my DIRECTV which has a contract....Going to just try to keep paying 'em down and see what I can do to build an emergency fund.
Click to expand...

I am just catching up on this thread but wanted to comment on something you mentioned a long time ago. You said you were worried because you have an arm on your mortgage. Do you know when the arm is up? I ask because we just had a similar situation. We had a 7 year arm on our house. We always planned to just refinance so weren't worried about it. We bought our house 7 years ago and completely remodeled it (new flooring, windows, doors (inside/out/garage door), furnace, water heater, stainless steal appliances, fenced in yard, etc. etc. etc. Well, we just paid $400 to get an appraisal so we could refinance and guess what...our house was appraised at $30,000 less than what we paid when it was a complete **** hole. So, they would not refinance us. I was completely freaked out because our arm is up next month.

Point of the story...I just got a letter in the mail yesterday that starting next month (and locked in for one year), our interest rate is going from 5.5% to 2.78%...we will be saving $200 per month on our mortgage. I am so excited. Granted, the rate is only locked for a year and will change next October. I am just hoping that we can keep track of what's happening with the economy and refinance before the rates skyrocket again. At this point I don't see the rate jumping back up higher than 5.5% by next October...

Best of luck to you!
 
I also had a variable ARM that converted in 2010 to 3.63 percent fixed after the market crashed. It had started out at 8-something percent (bought at the height of the market in 2005 and in a bad-credit hurry, too).

Our house payment is less than half of what it was when we bought the house. The downside is it is now worth only a bit more than half of what we paid for it :lol:

How do you not go crazy!

Anyway, unless you are in an interest-only ARM or a negative-interest ARM (with either you would be paying no principal so it's easy to check) an ARM adjustment any time soon would probably lower your payment like Bmezo says.

Here's how you can figure it out. In your mortgage papers, there will be a large multipage document named ADJUSTABLE RATE NOTE. The interest rate information will be in there. It will say something like:

"Interest rate and scheduled payment changes: Each date on which my interest rate will change is called a Change Date. The interst rate I pay may change on xx/xx/xx bla bla bla"

Then under that:

"THE INDEX: Beginning with the first Change Date my interst rate will be based on an Index. The "Index" is the xxxxxxx" (mine was based on the highest "Prime Rate" as published by the Wall Street Journal. There are other rate indexes. Take the name of your index and type into google to find out what the current prime rate is)

Then under that:

"CALCULATION OF CHANGES: Before each change date the lender will calculate my new interest rate by adding x.xx percent, referred to as the Margin (mine was .38 percent) to the Current Index....."

So now take the current prime rate of your index and add the margin. That will be your lowest rate possible after you consider this:

"LIMITS ON INTEREST RATE CHANGES: Interest rate will never be increased or decreased by more than 3 percentage points. For all change dates thereafter (mine were every 6 months) my interest rate will never be increased or decreased by more than 1 percentage point.....my interest rate will never be more than 6 percentage points greater than the initial rate and my interest rate will never decrease below x.x percent..."

SO, the math.

Say your interest rate is based on the WSJ published prime rate (now 3.25 percent, has been so since December 2008) + a margin of .38 percent like mine was. Say your interest rate changes start on January 1, 2012 and they can change up to 3 percent at a time and then only 1 percent every 6 months thereafter.

Say your interest rate is 8 percent.

On January 1, 2012 your interest rate will change to 5 percent (because it can only decrease by up to 3 percentage points at the first change date).

Then if the WSJ Prime Rate does not change (and it is not expected to until 2013 at the earliest and is not likely to change then)-

On June 1, 2012 your interest rate will change to 4 percent (because it can only decrease by up to 1 percentage point at every change date after the first change date).

Then again barring a change in the WSJ Prime Rate-

On January 1, 2013 your interest rate will change to 3.63 percent (because that is the minimum it can be, the Prime Rate + .38 percent).

Rate will stay at 3.63 percent until there is a change in the WSJ Prime rate.

This is just an example to show you how this works and how to read your mortgage papers, anyone will have to change it to the correct indexes & rates to figure out actual numbers.
 
Coming in late, but I have three words for you "Peter Francis Geraci". Saved my life, my husband and my family. Don't judge until you have walked in my shoes.
 
skincarekathy said:
I also had a variable ARM that converted in 2010 to 3.63 percent fixed after the market crashed. It had started out at 8-something percent (bought at the height of the market in 2005 and in a bad-credit hurry, too).

Our house payment is less than half of what it was when we bought the house. The downside is it is now worth only a bit more than half of what we paid for it :lol:

How do you not go crazy!

Anyway, unless you are in an interest-only ARM or a negative-interest ARM (with either you would be paying no principal so it's easy to check) an ARM adjustment any time soon would probably lower your payment like Bmezo says.

Here's how you can figure it out. In your mortgage papers, there will be a large multipage document named ADJUSTABLE RATE NOTE. The interest rate information will be in there. It will say something like:

"Interest rate and scheduled payment changes: Each date on which my interest rate will change is called a Change Date. The interst rate I pay may change on xx/xx/xx bla bla bla"

Then under that:

"THE INDEX: Beginning with the first Change Date my interst rate will be based on an Index. The "Index" is the xxxxxxx" (mine was based on the highest "Prime Rate" as published by the Wall Street Journal. There are other rate indexes. Take the name of your index and type into google to find out what the current prime rate is)

Then under that:

"CALCULATION OF CHANGES: Before each change date the lender will calculate my new interest rate by adding x.xx percent, referred to as the Margin (mine was .38 percent) to the Current Index....."

So now take the current prime rate of your index and add the margin. That will be your lowest rate possible after you consider this:

"LIMITS ON INTEREST RATE CHANGES: Interest rate will never be increased or decreased by more than 3 percentage points. For all change dates thereafter (mine were every 6 months) my interest rate will never be increased or decreased by more than 1 percentage point.....my interest rate will never be more than 6 percentage points greater than the initial rate and my interest rate will never decrease below x.x percent..."

SO, the math.

Say your interest rate is based on the WSJ published prime rate (now 3.25 percent, has been so since December 2008) + a margin of .38 percent like mine was. Say your interest rate changes start on January 1, 2012 and they can change up to 3 percent at a time and then only 1 percent every 6 months thereafter.

Say your interest rate is 8 percent.

On January 1, 2012 your interest rate will change to 5 percent (because it can only decrease by up to 3 percentage points at the first change date).

Then if the WSJ Prime Rate does not change (and it is not expected to until 2013 at the earliest and is not likely to change then)-

On June 1, 2012 your interest rate will change to 4 percent (because it can only decrease by up to 1 percentage point at every change date after the first change date).

Then again barring a change in the WSJ Prime Rate-

On January 1, 2013 your interest rate will change to 3.63 percent (because that is the minimum it can be, the Prime Rate + .38 percent).

Rate will stay at 3.63 percent until there is a change in the WSJ Prime rate.

This is just an example to show you how this works and how to read your mortgage papers, anyone will have to change it to the correct indexes & rates to figure out actual numbers.
Click to expand...

Hey Kathy, Thanks for the info. but I will have to calculate this when I'm not so tired...the math ALWAYS gets to me!:lol: That being said...we are in an interest only loan...we have been paying only a minute portion of the principle all these yrs. I am WORRIED that it will GO UP in 2012 and not down...the question is how much will it go up? I think right now the interest rate is around 6%. I am hoping it doesn't go up more than 200 bucks a mo. or we are toast!
 
Well if you want help figuring it out then just let me know. It might be a blessing in disguise that can give you some peace of mind.

If you are paying even a tiny bit of principal an adjustment would probably be helpful.

:hug:
 
Kewpon Addict - I can help you ballpark your new monthly payment if you want to PM me the details - principal balance, current interest rate, index upon which your rate is based. There are also websites out there that will help you do this, but I'd be happy to help with the calculation. Also, was this a 5 year ARM (if so, the principal will likely then be amortized over 25 years).
 
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