Credit card crisis

Well we saw the broker yesterday and it is good news...she did a 'short form' loan application, with minimal documents needed. Only thing is that we need another valuation on the house and she will add the money onto the existing variable loan with the same interest rate. She said it will take 2 weeks to process. The extra amount is $30,000 to service the credit cards and the rest for a car. The broker said the majority of her work is refinancing at the moment due to debts like ours. She also said she has witnessed relationship breakdowns of her old customers due to financial stress.

 

it sounds like a good outcome

 

And be aware, that if you spend on some of these cards, the zero balance is cancelled and you go back to paying interest at their nominal rate. This happened to me with St George Vertigo card, which went to show that rate isn't everything. If you are only using credit card to pay off, then the six months zero balance can be good.

 

When you pay the store card debt back, cut the card in half and cancel the card immediately.

 

If he earns 1300 a week and you earn 600 a week I would give him the car to get to work and get your car fixed ASAP.

The problem is income, not refinancing.

Other than getting a 0% for 6 months I wouldn't refinance by putting the debt on the home loan.

Can you walk/ride push the bike kids to school? Maybe car pool? Rent a bomb car rentals??

Just do what ever you can to get him back to work.

I used to do wrap financing and I saw a lot of people with CC debt out of control. To the point that their minimum repayment was higher than their income.

All the refinancing in the world wont help you unless your husband gets back to work ASAP.

By my maths, you are going backwards until he gets back to work.

Hope this helps
Cheers
The Stig

 

Point taken. It's a complete disaster if the refinance doesn't come through. It's driving us batty!

 

Hi Lisa

Sounds like you will get through it ok.

If it is any consolation you are not the only one with cc debt. I am a mortgage broker and have been seeing a lot of people with huge cc debts. Many are people that I would not have thought could get into debt like that. Many have debt levels of around $50-$60,000.

The worst seen was a woman with $220,000 on credit cards. The lenders kept sending her 'preapprovals' and she signed and got the money and spent it. As the debts started piling up she was using one card to pay another. I suggested she go bankrupt as I thought she had no way to keep paying, but she didn't want to do that and has been paying them off for about 2 years now. She has got it down to about $70,000.

 

An Update
We went through the refinancing of our variable and was waiting for for the valuers to come in, as their drive by valuation was low. In between this time, the car was fixed and going well. I had been discussing the money debt with my husband and he saw an acquaintance who is an accountant. He echoed some of the comments on this forum and said that in no way refinance the house loans. He said that as we are 'skilled workers', and that this is a temporary situation, that to 'tough it out'. We rang one of the bank credit card providers and waiting to transfer the credit balances (if approved) at a rate of 2.8% for 12 months. The stress is the lack of cash flow, but we have sold his guitars to get over this hump. So, we withdrew our refinancing application and will try and ride it out untill the work comes in again. It's a relief not to refinance, and we are promising each other not to let the mortgage payments fall behind.

 

Income

Hi Lisa

I don't mean to be invasive, but have you considered getting your husband some part time work while he waits for the other situation to sort itself out ?

A bit over a decade ago I had some major problems getting work in my specific field (the internet was a bit of an unknown in comparison to these days) and ended up working as a labourer for a couple of months. It got me out of the house, made me concentrate on something other than debt-related misery, and brought in the princely sum of $300 per week to contribute to the household. Plus I was the fittest I have ever been in my life - in fact I almost miss it, except the pay wasn't great

If you're down to selling personal possessions like guitars it might be a better shot in the arm for him to be out and about ?

Your hubby could mow lawns, wash windows, whatever ... there is meant to be a skills shortage I daresay there is plenty of white collar admin work around also. I was listening to a program interviewing homeless people who were making $50 per hour washing windscreens

Might help both of you and the debt situation to get that bit more in.

Just a thought
Cheers
Carl

 

I have a few uni mates that did this part time while they studied, and they made considerably more than $300/week. From what they said, it was tough work, but paid well, and like you said TryHard, it had the added benefit of getting them in shape. If I was short of money and work I'd definitely consider it.

 

No worries, my husband has secured some work while other applications are going through. All a matter of time. The part-time laboring he would love to, but down here, it's hard to get work in those areas. He will be doing some night shift in a warehouse for the next week.