DAUGHTER HAS 2 $15,000 CREDIT CARDS AT THEIR LIMITS, MIN PAYMENT $700/MONTHHOW DOES SHE WRITE FOR A WORK OUT PLAN & NOT FILE BANKRUPSY???THANKS
Country/State/Province of question: MONTANA
AS FAR AS I KNOW NOTHING YET....
SHE USED CREDIT CARDS TO SUPPORT FAMILY UNTIL NEW JOB AND CONDO REFINANCING JUST GOT DONE.
THANKS FOR ANY ADVICE FOR HER, SHE IS MARRIED WITH 2 SMALL CHILDREN....
Thank you for your question, it's great that your daughter doesn't want to file for bankruptcy. With a little hard work, it's possible that she can come out of this credit in tact. If your daughter has a 401(k) plan, depending on her plan she can take a loan from herself, pay off the credit card debt, and then pay herself back plus interest. The good side of this is that she has paid off her debt, but the interest she pays is to herself for her future rather than a bank. The risk of a 401(k) loan is that if she loses her job or cannot make payments on the loan, she will receive a 1099 the next year for the amount of the loan she didn't pay back. This means she will owe tax on this amount, plus a 10% early withdrawal penalty. Your daughter can also contact the credit card company directly and ask for a reduction in interest rates, and then pay off the credit cards at a lower rate. A credit consolidation company can also be used to negotiate debt with creditors, and give your daughter a more manageable "lump sum" payment. However, this will negatively impact her payment. I hope all this works out for your daughter. I think it's great she's looking for ways to manage her debt on her own, without looking at bankruptcy as a first option. Please take a moment to mark my service as "great service" so that I may be compensated for my time answering your question. If you do not rate me or rate me below "got the job done", I do not get paid although the cost of the question will be charged to you.
REALLY LOOKING FOR 1. A LETTER TYPE TO BASICLY CANCEL CARDS 2. A WORKOUT PLAN, ,,,SORRY OTHER INFO GIVEN IS ALL ON ALL THE WEB SITES,, AND NO 401K....
Here is a sample letter you can cut/paste into Word and have your daughter send to her credit card companies to close out the accounts: [Your name][Your address][Date]Dear Sir or Madam:Please let this letter serve as notice that I am terminating my credit card account effective immediately. Please close the following account:Credit Card Company: ____________Account Number: ________________Please send me written confirmation that my account has been closed. Also, please confirm that you have notified all appropriate credit card bureaus that this account was closed at my request.Thank you for your prompt attention to this matter.Sincerely,[Your Signature]As for a debt workout plan, I cannot create a plan for your daughter because our status on this site limits us to providing general information, not actually practicing any form of profession. I would need far too much personal information to develop a comprehensive plan. HOWEVER I realize you probably don't want to pay a ton of money for a debt consolidator. Suze Orman herself endorses Advantage Credit Counseling Service, and they offer FREE debt counseling advice. This will allow your daughter to sit up a plan and figure out how to stick with it to get her debt paid off. You can visit their site, HERE: http://www.advantageccs.org/onlinecounseling.htmlPlease take a moment to rate my service as "Great Service" so that I can be compensated for assisting you today. I wish you and your daughter the best.
TN CPA with Master's degree from Ole Miss