Need help! So confused!

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53kindebt

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Need help! So confused!
« on: August 24, 2017, 10:35:26 AM »
I apologize in advance for the long post!

My husband and I have roughly a combined debt of $53000. All are unsecured credit cards, lines of credit etc etc. We are very serious about fixing this and are unsure of the way to go about it.

We have zero assets, no cars, no home currently but are looking to hopefully within the next year own a car and within 3 years own a home. We are currently living for free with our in laws so it's time to make moves to pay this debt.

The majority of the debt (43000) is mine, which includes 7 credit cards, 1 line of credit and 2 high interest loans that don't show on my credit report that I pay monthly for a fixed amount of time. I currently have a credit score of 638, have zero late payments on any financial accounts, have 2 late payments posted for a old closed Phone account and 2 late payments posted for a phone account that is still open. I've had one item go to collections that I was unaware of and settled it within the month it was posted. And shows as "settled"

The remaining approx $10000 is my husbands. His credit score is 403. All accounts are delinquent and have been for some time. 3 are credit cards, 1 is an old phone account and 1 appears to be monthly banking fees for a bank account he never closed. The credit limits on the actual credit cards appeared to have been $5168, his credit report shows the balances for these cards as $9135 which I assume is interest after all these years. The phone account as 243 and the forgotten closed bank account as 514. One credit card shows a date of last activity as 2012-03. One shows 2012-11 and one shows 2012-10. The phone account is more recent at 2015-01 and banking fees at 2013-09. His credit file shows 2 collection accounts one is showing as the old phone account and the other is for one credit card.

I've done research on consolidation loans, consumer proposals and debt management plans.

In regards to only my debt: With a consumer proposal I can potentially get my debt down to $15000 and pay it off within 7.5 months but I ruin my credit. I was approved for a consolidation loan from the bank for $28000 with an interest rate of 12.15%. But it only will cover the 4 items I have with that bank, which are already low interest at 13% and they will not allow me to use the item to pay the higher interest cards from other banks but of course I get to continue to have a decent credit score. A DMP would be roughly $800 a month for 4.5 years which again would ruin my credit rating.

I have no idea how to go about handling my husbands debts. I was told he probably wouldn't qualify for a consumer proposal cause he debts are smaller. A DMP for him would be roughly $216 per month for 4 years. Should we even attempt to contact and settle his debt with creditors or will that reopen the dates on his file or should we just wait until they fall off of his file??

My fear is that we both will have horrible credit and will not be able to either get a car or qualify for a mortgage in the future if I do a consumer proposal.

And my other fear is that if we continue and pay so much towards debt per month to pay it off then again it would we would never have any money saved to even get a car or home.

Any advice, suggestions is greatly appreciated. I'm so confused as to what route to go.

Thank you!! 

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Wetcoaster

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Re: Need help! So confused!
« Reply #1 on: August 24, 2017, 04:50:26 PM »
It is good that you have finally decided to do something about your debt.

You say you are living for free right now.  How long can you live there for and  how much is your combined income?
Can your in Laws loan you some money?

How can 2 loans not show up on your credit report?

You could put every cent you and your husband have into paying down your debt if your want to keep up your credit rating.
You are worried about your credit rating but it isn't very good right now.  My rating is 649 at Equifax and that is 7 months after my CP was paid.

Your husband's credit is shot and will take years to rebuild.

Maybe give us some more information.






« Last Edit: August 24, 2017, 04:52:05 PM by Wetcoaster »

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53kindebt

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Re: Need help! So confused!
« Reply #2 on: August 24, 2017, 05:32:43 PM »
Thank you for the response!

We can live with them for as long as the still have their house. They do plan on selling in the future. I'd say at least another year, possibly more.

Unfortunately they can not loan us any money and I'm pretty sure my dad would disown me as a daughter if he found out truely how much we owe in debt.

The two things that don't show up on my credit file was a loan by ifinance where they paid upfront for a dental procedure and I pay them monthly for a 5 year term. I'll be finished paying October of 2018. The other that doesn't show up is a company called mogo. You borrow the money and pay biweekly high interest. I do plan on paying it off in about a month. Neither of those show on my credit report.

After taxes we make about $3631.

I'm wondering if we should just let my husbands debt pass the 7 year mark and let it fall off or if we should do a DMP or if we should negotiate with creditors.

Should I just go ahead and file a CP for myself. Does it really and truely fall off your report in 3 years after discharge?

I'm worried as well if we do have to move out and rent again and I'm in a consumer proposal and husbands credit is beyond f***** at this point in such a competitive rental market if a landlord would even approve us 

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53kindebt

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Re: Need help! So confused!
« Reply #3 on: August 24, 2017, 05:33:30 PM »
See below for my responses
It is good that you have finally decided to do something about your debt.

You say you are living for free right now.  How long can you live there for and  how much is your combined income?
Can your in Laws loan you some money?

How can 2 loans not show up on your credit report?

You could put every cent you and your husband have into paying down your debt if your want to keep up your credit rating.
You are worried about your credit rating but it isn't very good right now.  My rating is 649 at Equifax and that is 7 months after my CP was paid.

Your husband's credit is shot and will take years to rebuild.

Maybe give us some more information.


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LT

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Re: Need help! So confused!
« Reply #4 on: August 24, 2017, 10:01:44 PM »
Here are some numbers for you to consider:

Scenario #1 - pay minimum payment
Paying 4% of $43,000 at 18.9% interest, this will cost you $1720 per month for 225 months to pay off.  This means for the next 19 years, you will be paying $1720 a month!
- This also means that you don't add to that debt for the next 19 years
- This is almost half your take home pay

Scenario #2 - CP
Paying $360 per month for 60 months.
- This is based on 50% payback to creditors on $43,000 (not unrealistic)
- Your credit will be shot for the next 8 years.

A few other notes:
- Yes, you will find it harder to rent with a bad credit rating.  But, there are ways ways to mitigate your situation.  For example, you could offer to give a bigger deposit.
- Don't worry about obtaining a car if you are in a CP or Bankruptcy. It is relatively easy to get a car loan under these circumstances. You will have to pay more interest, but not that much more.

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Wetcoaster

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Re: Need help! So confused!
« Reply #5 on: August 25, 2017, 11:20:27 AM »
Also keep in mind with a CP your credit will go up 3 years after it is paid off.  IN our case we paid it off in 5 months so we have 29 more months to go.

 

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