Credit Card Debt Report 2011 – Where Has The Credit Blogger Been?

Hello-

It’s time for another credit card debt report. Like I said in my last post over 2 years ago – time just flies by so fast. I have not written since June 2009. The reason being was I was not doing so well financially. I experienced a financial hardship and was struggling to pay the bills and did not feel like writing about that situation at the time.

Here’s some of what happened:

Unexpected medical bills for daugther
IRS bill for self employment taxes
Student loans coming off deferrment
Drop in self employment income

I was unable to afford the over $1,000 a month in credit card bills along with all my other expenses.

As I mentioned in June 2009, I was looking at debt relief options. I was considering bankruptcy and debt settlement. At the time I was not able to qualify for debt settlement because I could afford all the minimum monthly payments. When this changed, debt settlement was the option I would choose.

Unfortunately going through a financial crisis basically forced my path to debt settlement. I used a do it yourself debt settlement course called Zipdebt to lead me through the debt crisis. From late summer of 2009 until spring 2010 I was getting all the debt collection calls I could handle as I could not make any credit card bill payments.

I was attempting to settle my Bank of America, Chase, Citibank, and Discover Card accounts. I was using my USAA credit card to pay my business expenses.

At first no one wanted to settle. This happened for the first 3 to 4 months I fell behind on my bills. After 5 and close to 6 months the banks had a change of heart and were willing to settle.

The good news is that I was able to settle my Bank of America, Chase and Citibank debts. A total of over $43,000 for $13,000. The money for the debt settlement offers came from family, a whole life insurance policy, and savings.

So here is what my current credit card debt situation looks like:

USAA $11,106.54
Discover Card $4,676.27
Capital One $796.33

I have paid off my auto loan which was $7713 in June 09. I was able to use the debt snowball to knock out this loan early before my financial crisis hit.

My IRS tax debt is around $5000. This is for tax year 2010 and the rest of 2009. The IRS takes a payment of $450 a month.

Student loans are still up over $35,000 and coming down slowly with my $202 a month payment.

So it hasn’t been easy.

Just hanging in there and keeping my head up.

This is just a summary, there is more to share soon.

Have a great day!

-Adam

The Credit Blogger

Getting out of debt – I have $55427 in credit card debt

Hell0-

The road to getting out of debt is not a short one when you owe over $50,000 worth of credit card debt.  Don’t you just wish you were a mega bank and you could just write down your debts when you make bad investments?

I wish I had that power.

I would write down a few thousand dollars worth of bad buys that I’ve made throughout the years.

Some people will think that bankruptcy is one of your biggest options when you owe so much money and you don’t even make that much in a year.  But for me, it’s more of a principle thing.  I spent the money, I made the good and bad decisions with the money I borrowed, so it’s my responsibility to pay off all the money I’ve borrowed and get out of debt.

Can you even compare the feelings of getting out of debt through hard work and being frugal versus getting out of debt using bankruptcy?

In one sense, you’ll feel total elation that you’ve climbed your way out of a huge hole and will have a tremendous sense of pride.  You’ll also have developed the financial habits that will lead to a very prosperous future.  You’ll be able to save money for retirement and for your kid’s college.

In the other sense, you might feel embarrassed that you had to file for bankruptcy.  You’ll struggle finding a job because your potential employer will be able to check your credit and see you have a bankruptcy.  You’ll struggle to buy a car or house because the lender will see you as a very bad risk.  This will go on for at least 7-10 years if not longer.

Don’t get me wrong, I have considered filing bankruptcy to just wipe out my credit card debts.

But for me, that’s not the best answer.  That would be the ultimate last solution.

There are plenty of other options available before bankruptcy is my choice.

There’s debt consolidation, debt negotiation and debt settlement.

Here’s my credit card debt as it stands now:

Discover $2696

USAA $9754

ATT$10856

Chase $14966

Bank of America $17154

So basically in a little over a month, I’ve reduced my credit card debt by about $1200.

I had a good month incomewise for the month of July so I’m looking forward to applying a good chunk of that to my Discover card so I can get that card paid off SOON!

I also had to divert almost $600 from credit card payments to help my girlfriend out with a dental surgery.  If not for that, my debt would have gone down by another $600.

I’m sure this happens to a lot of people out there, those unexpected expenses that take away from your debt repayments.

The key is to not let it get you sidetracked for too long.  Do what you have to do then get back to paying off your debts.

That’s all for now.

Thanks for reading.

Have a great day!

Adam – The Credit Blogger