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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: Credit Card Debt - Best Approach? Date:  10/6/2012  11:25 AM
Author:  vkg Number:  306014 of 312155

1.) Decrease his expenses
What is his mortgage payment? How does his mortgage compare to rent? His income has decreased 25-50%, he needs to decrease his expenses. The credit card debt implies that he didn't. He may not be able to afford the house.

He needs to sit down and start from zero on ALL of his expenses.

2.) Find a second source of income
Yes, it means working extra hours. He needs income now.

3.) Unlikely that they can touch the 401K or car. Equity in the home depends on the state.

4.) He can't afford a 8-10K car.

5.) Employee theft is a serious problem. Many employees are doing credit checks. If you are in financial trouble, you are a higher risk. Especially for any job that requires handling inventory or cash.

A bankruptcy is only a problem for specific jobs.

Many years ago when a was working for a military subcontractor, there was a general statement that a bankruptcy was worse than a felony. Bankruptcy was serious, and would cause you to lose your clearance and therefore your job. Being deeply in debt can be more of a security risk. I haven't needed a clearance since that job, so I am not up todate on the impact.

6.) Credit counseling.
Not one of the "We can make the credit card companies write off your debt by destoying your credit rating and paying us a large amount of money."

He should be able to work himself out of this situation without bankruptcy. He can contact a bankruptcy lawyer, and see what options he has. He will have to have credit counseling before filing anyway.
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