Financial Information
How can I reduce my debt with the following situation?
Question : How can I reduce my debt with the following situation?
I own my home. My first mortgage is $ 380,000 my second mortgage is $ 90,000. I have approx $ 60,000 in unsecured credit card debt (approx 12 accounts). My home has dropped in value by about $ 40,000. What are my options? I would like to eliminate all my credit card debt and have at maximum 3 accounts to lower my monthly payment. (1st mortgage, 2nd mortgage and other debt).
Does anyone have advice on how I can do this? My credit score is 670.
Thanks
reduce my debt
Best answer:
Answer by Mustaf H
You borrowed yourself into this problem. a 670 rating is “high risk” status and therefore high interest.
Cut up all your cards, SELL your house, pay down your debts and get back into the housing market in a much, much less expensive place. Rebuild from there. Better to sell your house than to have it taken from you.
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#2 written by nicole k 1 year ago
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#3 written by scarlet rose 1 year ago
Have you ever considered working from home? I started working from home a couple of months ago after I started getting my wages garnished. I have made $ 2,000 so far. There are a lot of great, LEGIT, free opprotunities out there. Feel free to check out my blog and email me if you have any questions.
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#4 written by Jen G 1 year ago
I’d recommend that you pick up a copy of the book The Total Money Makeover by Dave Ramsey. He has a baby step approach to getting out of debt and building wealth for the future.
The plan is working for my family and I, and it can be done at any income level. It was truly a life changing book for us.
The main points he makes is that you have to live within your means using a budget, get out of debt, and not borrow money again. Without payments, you can build your wealth much more easily.
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#5 written by Annie 1 year ago
Cut up your credit cards.
Start selling thing. Sell everything you don’t have to have in order to live. If you can, get rid of your car and take public transportation.
Take a second job.
Never eat out, clip coupons and eat healthy, but very cheaply.
Do not buy anything except in thrift stores out of absolute necessity (exception…underwear).
Every penny possible should go towards paying off credit card debt. After that’s paid off, get an emergency account goung. Save 4 – 6 months living expenses.
Refinance your house with a 15 year mortgage.
After that, start putting 10 – 15% away for long-term investments (I do NOT want to be supporting you in your retirement.)
Make sure you have enough insurance.
OK, now consider if you can quit your second job and get an inexpensive car. No more credit cards, though.
If you do these things, you will accomplish your financial goals and more – and I won’t have to support you in your old age!!!
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#6 written by DrIG 1 year ago
You did not state your income but it seems from the loans that you have that you are in danger of being overextended. There has been a major increase in foreclosures due to a great extent by the recent housing slump.
First, look carefully at the amount of interest that you are being charged by each credit card company. You may call them and ask for a reduction in the rate. If they agree you will be surprised how much money you will save and how much more quickly the credit card balance will be paid off.
If the plan above does not work for you then you can try to get a lower rate from other credit card companies. You can play the game of playing one credit card company off the other. Just be careful of h transfer fees.
Surprisingly, I am going to suggest that when you pay off the balance that you do NOT close the account. Just do not use it. The reason is that your credit rating will be lowered when you close the account. I know that this seems wrong but in reality an important element in your credit score is your debt to credit ratio. You will be lowering the amount pf credit that you have available which is not good.
You are on the right track. Lowering your debt is essential. You also need to raise your credit score.
Good luck!
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you have only one good option
have a family conference and tell everyone we are
DOWNSIZING a LOT
get rid of anything you really truly do not need that has a monthly charge.
cell phones
internet service
cable tv
2nd car unless it is really needed for the wife to get to work
both look into public transportaton.
lawn service if you have it
if your house is not worth what you owe i would not advise dumping it right now.
if you did this and throw all of the money toward credit cards starting with the highest interest and work your way down you could get all out of debt in a few years.. do not worry about your credit score — you will not be seeking any credit in the near future.
good luck and keep us posted when and you get back on the interent