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Originally Posted by SimpleMind
Hello.. And Greetings. Wanna hear my story?
My wife and I make a decent yearly income. We own 2 homes (main home and vacation home). Have 2 cars, and have built up a decent 401K over the past 5 years.
But... We are 33 grand in credit card debt. We were doing OK until some of the card companies doubled the minimum payment, and gas was starting to cost $100 a week for my wife to commute to work.
I had some unexpected emergency expenses come up last month. For the first time in 5 years I am late, and late with all 12 of my revolving debt accounts.
I decided to look into a home equity loan, or a 15 year refinance. BUT.. Most lenders can't give me a "Good" rate, or refinance at 100% equity because of our credit scores. I believe our credit score is in the mid to upper 500's.
It seems my option is to seek credit counciling. Will credit counciling make my credit score fall more? I wouldn't mind selling the 2nd home, but the 2nd home needs about 3 grand worth of repairs. I would rather complete those repairs before I sell. But again, my credit score is too low and revolving credit too high for me to get a loan to fix the 2nd home.  |
Tough situation...
Unfortunately, as I'm sure you're experiencing, being late on 12 accounts in one month will severly impact your score.
Without knowing more details, all I can give you is very general advice.
First off, credit counceling will lower your score, and often times "A" lenders will refuse to give out mortgages to those people that have recently utilized a credit counceling service. In most cases, they don't really do anything that you as the consumer are unable to - they call up your creditors, try and negotiate lower rates/payments, and instead of you having to mail out checks to each of the creditors, they have you write them one check (usually with a hefty fee included) and mail out the checks themselves.
Again, as I am not very familiar with your situation, this is very general - but with that much debt, I would give serious consideration to getting rid of your second home. I imagine that it would decrease your negative monthly output significantly, and you can roll the additional monies onto paying down your credit cards ASAP. Although I typically wouldn't recommend doing this, I get the impression that you may be unable to continue your current payments for an extended period of time - you may even want to consider putting the repairs for the second home on a credit card. Again, it isn't something I would suggest doing normally, but if it will save you from bankruptcy or being late on your payments again, it may well be worth the interest that you pay.
If I can be of any more help, please let me know!