Large debt advice

[jsinacola]

Hi,

your input and thoughts on the following situation is appreciated.

Last year in August I started to remodel my house with my credit cards: buying tools, building materials, etc at large chain stores. I was hoping to pay minimal payment of 2% per month over the course of 4-5 years.

But then as you well remember the banks hiked the minimal payment rate to 5%. There has been a class action law suit against them (Chase if I remember right) but the consumers lost in the end.

I haven't stopped spending, instead maxed out the cards and stopped paying. Now there is a 80,000 principal (about 8 cards) plus fees and penalties. At 5% minimal that's well over my monthly income and impossible for me to pay. I've been dodging calls and letters for a year now, but I am thinking a law suit is coming soon. The irony is I have a good income and real estate.

What are your ideas to get out of this? Keep dodging? Declare bankruptcy?
What if I transfer everything to my wife's name, wait 5 years and declare bankruptcy?

Paying them is not an option because they slammed me with 5% minimal (payment increase of 150%!) when I had a second baby coming and refused to relent.

[chane]

You may want to talk to a bankruptcy attorney about this. If you have assets, you may lose them if there is a law suit. If you are able to file bankruptcy you maybe able to keep them.

It's definitely good to be pro-active and figure this out before it happens.

[jsinacola]

Thank you for your advice.

I think you can ask for the different debt relief options from a debt settlement company or an attorney. You can go for debt settlement, in which either you yourself or your attorney can negotiate with your creditors for reducing the amount of debt. You will get a clear picture of your condition only when you consult a professional for helping you out of this financial mess.