Re: WhyChat please respond July 7th

Posted by mk_378 (128.173.37.98) on July 08, 2004 at 12:11:11:

In Reply to: Re: WhyChat please respond July 7th posted by Sky on July 08, 2004 at 08:11:28:

Your husband's credit-happy ways are going to lead both of you down the road to ruin. Home equity loans don't get rid of debt, they just transfer it. You may see a lower monthly payment, but you have to look beyond that. There will be many more payments, and a much higher total of payments. And if circumstances change so you can't pay, the bank will take your home. If you don't forsee having enough income to pay off these debts in a reasonable time of 3-5 years, you might consider bankruptcy, formal or informal.

In order to settle the debt, you'd need a lump sum of money, which you don't have. But you can try to negotiate better terms, using the implied threat that you'll stop paying entirely if you can't get them. Contact the creditor and say something like "Since we're out of the CCCS now, we can afford to pay [a few dollars more than they were getting through the CCCS] per month, but you need to keep the APR at 0% and forgive all late and overlimit fees so we have some hope of paying off the balance." In other words, ask for the CCCS type terms yourself, and sweeten the deal with a few dollars more per month, also the OC won't have to kick back money to the CCCS, so they should like it. Also you need to get the OC to agree in writing that after you make all the payments, they will report the account "Paid as Agreed" to CRA's and remove those late payments. That's the main reason to pay this debt rather than default on it, since it isn't too far gone you want to be able to keep a good credit rating afterward.

If you can negotiate an existing debt to a low APR, it is much better than taking on a new debt to "pay it off". Don't worry too much about fixing up your credit reports yet, but keep that in the plan for the future. While they remain trashed, that will help keep your husband away from borrowing more money.

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