I wouldn’t take out another loan

Honestly, I wouldn’t take out another loan. I would make minimum payments on the lowest rates, and put all the extra on the highest rate until paid off, and then domino it through the rest of the debts. The variable rate scares me, tells me you are going to end up paying MUCH more, and every time your interest goes up, your payments go up, so you could be in a real bind in a real hurry, your payments could double or more in a couple of months.

I WOULD only use a 2nd mortgage as a last resort, can’t pay my bills at all, type of thing. I would also earmark X amount of dollars for savings until you get at least 2 months of bills in the bank. If you have read much of this forum, there are a lot of people who will tell you that a HELOC is the worst thing you can do unless you first cut-up and cancel all credit cards. Do not ever apply for another one until the HELOC is paid off. Why?

Glad you asked. You have done nothing to resolve the cause, just put a band-aid on the situation and within one year, you will be right back where you are now only with a HELOC staring you straight in the face along with the other debts. I am not the only one on this forum who found htis out the hard way.

Before a few others pipe in with ‘think about your FICO score.’ What is more important, your FICO score or getting out of debt and out from under the burden you are currently facing???

I need advice again

I have about $16,500.00 debts right now. This includes two personal lines of credit (one was used to pay off a car loan that was at a higher rate)and the other is leftover (I got stuck with it!) from a divorce.The rest is all credit card debt. Nothing is maxed out. I make higher than minimum payments each month. I have nothing saved for an emergency. I pay all of my other bills on time and do have a little bit leftover each month (very little). My car is old and I think it may last another year. I only have one. I have a house and the payments are less than renting would be.

If I get a HELOC loan of $20,000, I could pay off everything and my payments in paying that back would be less than if I pay on each thing like I am doing now. My credit score would go up. But the HELOC is an adjustable rate with a teaser rate of 5.99 for the first 3 months. After that it goes to 8.5 until it changes again and could get much higher than my other interest rates on the current debt.

If I take out a second mortgage for the same amount, I could pay it all off. The payments to pay off the second mortgage would be half of what I am paying now. The rate would be fixed at 9% for the term of that loan which would be 15 years.

My highest credit card interest rate is 21%. My lowest is 8.9% and it has the highest balance. The HELOC and second mortgage interest is a tax deduction while the credit card debt is not. What should I do?

I don’t know what a HELOC loan is. I think it depends how much you have left owing on your mortgage. I have a problem with taking out a 2nd mortgage on a house. I just think your mortgage is first priority and personally, I just couldn’t do that. A mortgage is something you want to get paid down fast – not add to it. I’m sure others will disagree. If your credit score is good now, would this one consolidation loan really hurt it that much – especially if you are confident you can pay it with no problems? Can you skim just a little off your payments you are making now if you are worried about having nothing saved? I think I would seek counselling for the best advice because a 2nd mortgage is a big step and I can’t help but think that would affect your credit score as well.

I am thinking that the HELOC is a good idea just to get out from under the 21% interest. On the other hand, I don’t like using the house to secure a debt. Is your job secure? If you pay a bill late, tough. If you pay a HELOC late, you could lose your home.

Still, consider if you could pay if off sooner rather than later, you could get out of debt and beat the interest payments.

HELOC is a Home Equity Line of Credit. You are borrowing from the equity that you have built up over the years of paying on your mortgage. The interest on these loans is tax-deductible and the loan is secured using your home. If you default on the loan, the lender can and will take your home. Supposed to motivate you to keep up the payments on time I guess.

Why is this AMEX debt his and not “ours”?

I may have missed the first part of this thread, but why is this AMEX debt his and not “ours”? Isn’t he saying he used this credit card to keep up with the monthly household expenses? Do you have an Emergency Fund of $16,000? That is a great emergency fund! This is your debt and your savings as a family. You and your dh need to do this together.

1. I would strongly recommend you sit down with your dh and tell him that you want to be involved even if it is only for 10 minutes a week looking over the checking account and talking about the next week’s bills. Do you know what the income is and what your bills are? You need to know. You will both sleep better at night if you are on the same page. Don’t be shocked if there is more debt than you imagined. If you have had your head in the sand about your finances for a long time, it will be hard at first when you see the whole picture. 2. Next I would really focus on cutting anything you absolutely don’t need, cable, cell phones, extra features on your home phone, netflix, eating out, entertainment, etc… In order to stop using credit cards, you have to live below your income.

I’m sure he is very stressed out that he can’t take care of the family by himself. He probably feels like a failure. But you need to work together. 3. Third, I would look into home based businesses, evening work for you or your dh. There are lots of temporary part-time jobs that will easily make you an extra $1000 a month, like delivering pizzas, throwing newspapers, etc. A second job would help your situation greatly. If you dh is making $5000-6000 less than he should, maybe he should be asking for a raise or looking for a second job.

You need to keep in contact with all your collectors. Tell them that you are on a strict budget and that you will be able to pay them $XXXX number of dollars a week or month. Even if it is less than the minimum, you will show good faith that you are going to pay. As a last resort, get a payday loans from LendUp or from this website a make a payment in time!

Have you heard of a pro-rata plan or a debt snowball? I can explain those if you are interested.

There is hope in paying all this debt without going into Bankruptcy and without going through MMI. But you must do it together. You have to know how much goes in and how much goes out every month. It is your responsibility to be involved in this so you know what is going on. It seems like you are holding this savings over his head like his mother instead of his partner. I hope I’m not offending you, but it seems like you love each other very much and the only thing standing in your way of peace is money.

In order to get things accomplished it will be hard work and sacrifice. He has to agree to cut up all the credit cards and live within your means. Are you religious? I would pray about this a lot.

If I am way off base, please correct me. I really want to know what is going on so that we can all help you.

Keep us posted.

You don’t have to be in the military

When I married my husband I became a member. My son from a previous marriage became eligible for USAA membership. If he should marry is wife and any of his children can become members. If he has children then they can members. Even if he divorces, his wife would still be a member. If she remarried her new husband could be a member. You can get to USAA website by doing a search. There is a box to find out if you are eligible, or call their 800 number.

did he sign up while he was enlisted? It can’t hurt to call usaa and find out. they have a website… www.usaa.com Not sure about your dad. I Know i saw a notice on thier website saying that after you got out, you had 1 year to sign up with usaa…i would check. you might have it and not realize..or your husband:) Worth a shot!

I’ll go see about it. *he* seems to just naysay most ideas, so I’ll find out and let him know. if a criminal wants your info they will. I learned from the best, my mother was a major con-artist. I finally got away from her, but I know so many of the tricks. She stole tax preparers social security numbers to get checking accounts that’s just one of the ways. Where there is a will, there is a way, you cannot live in fear. Nowadays, the banks will not hit you if your are a victim of identity theft…been there done that.

I never had a problem with checking at BOA

I never had a problem with checking at BOA and I had an account with them for over 30 years. Long before their name was Bank of America. I am not surprised that some people have problems with them or any other financial institution. They all seem to be playing the “got cha” game and anyone with an account needs to be aware and on top of things all the time. It’s much easier to do that now with online banking where you can check frequently.

The only problem I had with BOA besides their pitiful slow customer service when calling them was a savings account I once had with them. I closed it and thought everything was fine. I had signed up for their keep the change program. Several weeks later I get a statement in the mail that I had 27 cents deposited in my account but I also had a bill for a monthly service fee because I was supposed to keep a certain balance in order for the account to be free. So my 27 cent was dedudted form the service fee.

I called them and explained I had closed this savings account. I was told the account had been reopened so they could put my 27 cents in it ! I told them I gave nobody permission to reopen an account with my name on it. After speaking with three different reps I finally got one to say they would close the account and send me a check for 27 cents which they did. That’s what they should have done in the first place since the account was closed. I haven’t heard from them in mo0nths so I hope the account is closed for good this time and nobody at BOA is going to reopen it. I don’t want to make another phone and waste more of my time.

I don’t know about changing a checking account every six months. Find someplace you like and keep on track of what is going on. If you can get into a credit union or are eligible to bank at USAA you will have the best chance of banking with someone you like and will stay with.

I wonder if this might work. It might not work, but it may make you feel better. Every time
you pay a bill, include a note that says something like “I am dismayed, alarmed and disappointed that your company charges such usurious rates. I have been paying off my debt and it never seems to go down as you continue to charge increasingly growing usurious interest rates. Your policies should be investigated for criminality.”

How about if you put something like that, and make sure you include the words, “you charge usurious rates” several times in your letter, every time you pay a bill?

I did that to a creditor to whom I paid for 2 years in a row and the balance would not go down. They lowered the rate by 8% and I was able to pay it off. I never had to call them. It might not work, but it may make you feel better.

I agree with you about Bank of America

I agree with you about Bank of America. I, too, have been paying off my Visa bill with them. Paying extra each month. A few days ago, I looked to see if my new statement was on the internet. Almost fell out of my chair to see that my payment went up $60 dollars, all of it finance charges. They doubled my finance interest rate. I am so furious. I have not missed a payment, ever, nor even waited until the due date, I pay it at least two weeks before it is due, each and every month.

I phoned them and complained. There reason was that I have high balances. What kind of reason is that, how can I ever make any headway if the interest rate just gets doubled. I have been managing, but now with this $60 jump in the monthly payment, it will be tough. Looks like there is not a darn thing I can do about it to get them to put it back to what it was on the last statement. I even called a second time, both times on the phone for an hour. They wouldn’t budge, I wasn’t even asking for a lower finance rate, just back to what it has been for the past three years.

Why is it that they can give a very low rate to a new customer, but here they have customers who pay their bills every month and on time and they treat us like dirt.

There should be something that can be done about this, but can’t figure out what. I told both guys I talked with that their logic of raising the interest rate, because ( and only because ) I have high balances made absolutely no sense. Why couldn’t they be helpful and just leave it as it was, I was paying $25 a month above the minium, now that will all go for more finance charges.

Personally, I would close the account, and pay it off, then you know for sure that you cannot charge anymore. Also, I would look for a card that offers a low % rate to balance transfer, and tell BofA where to stick their card.

Also, CALL YOUR CONGRESSMAN!! Not that he/she can get it lowered or anything, but they need to be well aware of situations like yours and many others just like you. The CC companies have just “run amuck” (sp) with this type of thing. Seems Congress may be the only ones willing to get this stuff stopped.

Needs advice again

So, what I am hearing from the blog is that it might be better to just snowball my payments, apply more to the higher interest debt whenever I can and to get neither a second mortgage or a HELOC (home equity line of credit). There are couple of lines of thought about snowballing. The one you hear most often is to pay-off the highest interest first. This does make sense from a pure financial perspective.

You will also find people refer to Dave Ramsey’s approach; which is, payoff the lowest debt first, then the second lowest debt, etc. The reason? It gets some traction going. You can see headway a lot sooner and gives you incentive to keep going.

that would be my advice, never put up your home, ever, ever, ever. You may find yourself in the situation that my in-laws are in, they OWE more on their home than they can sell it for. Now, he’s in a nursing home, and she’s struggling to pay everything.