Hi all,

I haven't posted here before. I think I've made a pretty good
financial mess and I'm not sure where to look for advice. There seem
to be some knowlegeable people here, so maybe you guys can point me in
the right direction. At this point I'm not sure what the best option
is:

I graduated from college about 3 years ago. I have a full time job
and I currently make about $60,000. I had about $12,000 worth of
student loans when I left school, about $10,000 now. My spending
habits got out of control and I created a mess of things. First by
charging up credit cards. Then by taking loan to clear them off.
They stayed that way for about a year.
Earlier this year I was on business travel a lot, atleast half of
the time from January to May I was not at home. I lost track of
spending and bought a few things that I probably shouldn't have (new
laptop).

Anyways, here is where I stand now:

I make about $60K. Which translates to about $2900 / month take
home after taxes. I have a car loan which will be paid in 3 years. I
have quite a bit of credit card debt racked up over the past few
months. Here's the score:

Rent, $1000 /month (Moving isn't an option, this is as cheap as it
gets here (DC) sadly.
Student Loans, $10,000, $120 / month
Car Loan, $10,000, $430 / month
Old Consolidation Loan, $21,000, $500 / month

Credit Cards, 4 cards x $3000, 1 card x $6000, 1 card x$ $1500
total: $11,500
Card payments vary between $30 and $70 each.

Misc monthly payments: $35 phone, $40 cell phone, $40 internet,
$160 car insurance, $50 charity, $40 online game, $10 music service.

Anways, I've fixed the spending problem. The online gaming fee
and the music service are gone. I only buy essential items now and
things are under control.

However I still have the problem of this huge debt. I don't
really want to declare bankruptcy, but if you add up all those
payments you'll see they come to about $2795. Doesn't leave much room
to eat... or anything else for that matter. I need to get rid of some
of this or extend payment somehow. I'm not looking to spend anymore
money, but I would like to start building a savings account while
paying this down. And maybe have enough to see a movie once in a
while.

I got an offer from MBNA for up to $50,000 at 6.99%. I was
thinking about taking that on the 6 year plan and repaying the credit
cards, car loan and consolidation loan with this one big loan. Which
turns out about $850 a month. That would give me enough money each
month to put a decent chunk into savings and still have some to eat,
etc. As it is now I'm maxed out and regretting ever putting myself in
this situation. The only problem with the MBNA loan is that it's
variable with prime and maxes out at 19.99% ..ouch

Are there other options? Is there a way to walk out of this, repay
the debit and manage not to destroy my credit by the time I hit 25
years old?

Any options, thoughts, advice, would be appreciated. I know I
shouldn't have gotten myself in this... but I'm here and I could use
some advice.

Thanks,
John

John,

First things first.

It sounds like you should speak to a qualified bankruptcy attorney.

If you haven't fallen behind on your minimum monthly payments, then it
only seems like a matter of time before you will. And your credit
will be soon shot.

Let's put it this way, is it really preferable to postpone the option
of bk, just for the "illusion" of good credit. You won't be able to
get a mortgage or a loan in any event for right now, so it's better to
think in terms of a clean slate -- in so far as that's possible.

Taking a loan from MBNA is a big fat DUD. Don't do it.

If you miss 2 or 2 of the payments (and how could you avoid this) your
interest rate will shoot up to the friendly credit card companies'
"doing-business-as-usual" 20%+ usury interest rate.

Best legal racket ever -- borrow money at 1% and lend at 24%.

It sounds like you're a prime candidate for Chapter 13, but you need
to speak to a good attorney.

A reference for you:

nolo.com

Find out as much as you can about bk -- taKe the mystery out. Nolo has
great books...barnes and noble or borders should have one on bk in the
law section

The general public still suffers under all these delusions like
debtors' prisons and stuff like that...that's nonsense.

You might want to speed things up b/c there will likely be major
revisions to the bk code over the summer.

Most attorneys have free consults. You might want to start with
surveying 3 of them and pick the one you like the best to handle your
case.

Be prepared with GOOD questions before these consults so you are fully
in the know.

Last, don't beat yourself up too much over what you did in the past.
It doesn't help anyway. Every problem has a solution.

Good luck

I am guessing that your credit is still good. If that's the case, I think
it would be worthwhile to try to get yourself out of this and keep your good
credit.

My ideas are:

Sell the car and buy an old bomb to drive around in for now. That will
eliminate the car payment and greatly reduce your car insurance payments.

Get a part time job doing something that you don't mind doing -- work in a
music store, or whatever else you might enjoy -- and use the money to pay
off your credit cards one by one.

Sell off some of the unnecessary items you bought and use the money to pay
off the cards.

See if you can rent a room in a house, or otherwise share rental space, to
save on rent and utilities.


"John Smith" <john_smith9889@yahoo.com> wrote in message
news:7cd00e82.0307081346.cb42bd@posting.google.com ... Hi all, I haven't posted here before. I think I've made a pretty good financial mess and I'm not sure where to look for advice. There seem to be some knowlegeable people here, so maybe you guys can point me in the right direction. At this point I'm not sure what the best option is: I graduated from college about 3 years ago. I have a full time job and I currently make about $60,000. I had about $12,000 worth of student loans when I left school, about $10,000 now. My spending habits got out of control and I created a mess of things. First by charging up credit cards. Then by taking loan to clear them off. They stayed that way for about a year. Earlier this year I was on business travel a lot, atleast half of the time from January to May I was not at home. I lost track of spending and bought a few things that I probably shouldn't have (new laptop). Anyways, here is where I stand now: I make about $60K. Which translates to about $2900 / month take home after taxes. I have a car loan which will be paid in 3 years. I have quite a bit of credit card debt racked up over the past few months. Here's the score: Rent, $1000 /month (Moving isn't an option, this is as cheap as it gets here (DC) sadly. Student Loans, $10,000, $120 / month Car Loan, $10,000, $430 / month Old Consolidation Loan, $21,000, $500 / month Credit Cards, 4 cards x $3000, 1 card x $6000, 1 card x$ $1500 total: $11,500 Card payments vary between $30 and $70 each. Misc monthly payments: $35 phone, $40 cell phone, $40 internet, $160 car insurance, $50 charity, $40 online game, $10 music service. Anways, I've fixed the spending problem. The online gaming fee and the music service are gone. I only buy essential items now and things are under control. However I still have the problem of this huge debt. I don't really want to declare bankruptcy, but if you add up all those payments you'll see they come to about $2795. Doesn't leave much room to eat... or anything else for that matter. I need to get rid of some of this or extend payment somehow. I'm not looking to spend anymore money, but I would like to start building a savings account while paying this down. And maybe have enough to see a movie once in a while. I got an offer from MBNA for up to $50,000 at 6.99%. I was thinking about taking that on the 6 year plan and repaying the credit cards, car loan and consolidation loan with this one big loan. Which turns out about $850 a month. That would give me enough money each month to put a decent chunk into savings and still have some to eat, etc. As it is now I'm maxed out and regretting ever putting myself in this situation. The only problem with the MBNA loan is that it's variable with prime and maxes out at 19.99% ..ouch Are there other options? Is there a way to walk out of this, repay the debit and manage not to destroy my credit by the time I hit 25 years old? Any options, thoughts, advice, would be appreciated. I know I shouldn't have gotten myself in this... but I'm here and I could use some advice. Thanks, John