The Gaming Den

Alright, here's the deal. I'm sitting on about $4,000 of credit card debt at 30%, on two separate credit cards. I can no longer make my minimum payments.

I have cut out all needless expenses, and still don't have any money to pay my debt. The rest of my bills are paid, just not my credit cards.

I have sold everything I own of any value except my xbox, my car, and my computer. If things get worse, I will sell them too in that exact order. (I can deal with no car and no xbox, but even without internet I use my computer for too much, I don't want to sell it unless I absolutely have to.)

Here are things I can't do:

1. Stiff'em. Although I could get away with it short-term, long term is bad. Already it is legal to fire someone for having a low credit score, who knows what horseshit they'll have in place in the future?

2. Get any sort of loan. I have a very high debt to income ratio (I barely peak 10k a year), and no one would give me a loan. Also, no collateral.

3. Sell plasma. They won't take me because of my medical history.

4. Ask the credit card company for leniency. They're pissed off enough at me, they would only help me if I was dorwning and they were holding a firehose.

5. Anything that costs me money now. I have none. I'm rolling pennies for gas money as it is.

Sorry to hear you're having such a hard time. I don't know the details of where you live or what obstacles you may have to working, but it clearly looks like you need a different (or another job).

While 4K may seem like a lot, really it isn't that insurmountable of an obstacle. You can probably make 1K/month delivering pizzas at night. This could be completely paid off in 4 months with extra work.

Also 10K sounds awfully low for a full time job. Are you actually working 40 hours/week. At 2000 hours per year (40 hours x 50 weeks), your at less than $5/hour - this is less than minimum wage.

While I have no specific capacity to offer you expert opinion, it seems like your best bet is to not make payments that you can't make. They may get around to eventually suing you, but that will take several months, and by then, if you can make some extra dough, you can pay them off and be done. Your credit will take a little hit with the late payments, but it's better than defaulting.

I wouldn't sell my car (presuming it's paid for) to pay of the credit cards unless you have some other way of getting to work.

Do you have any friends or family that would be willing and able to lend you the $4000 at a less usurious rate than 30%? Would you be able to pay them back in a timely fashion if they did?

You're going to school now, correct? That's why you're only making 10K a year? Do you have time for another job?

Count, there are only 3 options here:

1. Increase your income.
2. Cut your expenses.
3. Renegotiate terms.

For #1, in addition to the suggestions above I would advise looking over your last three years' tax returns - if your income is in that range you're probably due sizeable refunds (or at least enough to get you through the next few months)

For #2, I don't really know your circumstances well enough to give solid advice - but for the warm months a bike is a workout wrapped in gas savings.

For #3, you say you cannot ask the card companies for leniency nor ask for a loan - but I can think of two other possibilities:
-you may be able to transfer the balance to another card company at a better rate. This is not a long term solution, but card companies want customers with fat balances, as that's how they make their money.
-you may be able to get a professional to negotiate on your behalf - look up a lawyer who specializes in debt or contact your elected representatives office for advice about such.

My advice all concurs with those above. Best of luck, Count.

1) Stiff 'em. It's only legal for them to hold these against you for seven years. After that point it cannot legally impact your credit.

3) Renegotiate. There are less right now, but many services for renegotiating debt down - they'd rather you pay it than realize you can totally stiff them and outlive their impact on your life. Check the service on the BBB first before calling, tho.

-Crissa

It can be renegotiated but when you negotiate, be firm yet polite but know when to push and when to give a little.

I"ve had family do this in the past and that was their experience apparently.

There are groups that can sometimes help with such problems.

http://www.cccservices.com/OfficeLocator.html

That is a non-profit group that may have local offices near you where you can seek assistance. If not them, then look around at other credit counseling services in your area. Hopefully one exists nearby.

Your debt amount actually isn't that daunting compared to the national average of folks in debt (though I know that is no great solace when you are actually put to the fires there, I have knew of someone committing suicide over just $1000 of debt because once you get stuck, it seems inescapable).