I had some time this afternoon to work on my payment reduction strategy.
Right now, I’m hating WellsFargo (my own bank of 8+ years), and loving Citibank. Let’s recap
The Ugly (WellsFargo and Chase)
I have 3 lines with Wells. A $500 limit student credit card, which I plan on keeping current, as the payments are low. A 25K personal line, and a 20K business line. I called today to find out if they offer any payment programs on my two lines of credit. Bottom line: nope.
Apprently my personal line needs at least 9 payments before they can consider “re-age”, which, I don’t even know what that means. I did learn no charge off til 120 days, I’m at about 45 at the moment. So I have some room there. My goal is just to stay away from collections at this point. So, I’m going to be doing about a 1/2 payment on the personal line, if I can do it.
The business lady was not helpful at all. She basically said, “in one week, this will go to the legal deparment”. Charge off is at 120 days. I paid a small payment of $285 (seems big now) today. Need to watch this one.
Chase
The Chase lady was no help at all. All her options were, “I would recommend making the min. payment”. Like a broken record that is all she could say. She did tell me that the next “cycle” (billing cycle) would be Feb 16th, and that options might be available then. Humph.
The Bad (WAMU and Citifinancial)
I have a 15K personal line at citifinacial and a 30K SBA line at WAMU. Both are less than 45 days late. Neither have any sort of payment plans available at the moment.
I told citifinancial I would bring $200 to their branch tomorrow and a post-dated check for $300 on Feb 15th. (I’m just trying to buy some breathing room here) So that takes care of them until March 1. It was more than I was hoping ($500), but the best I could get.
My WAMU payment was/is late as of today, so I now behind on it. I have 90 days on this before write off, so this account is getting put very low on the priority list. WAMU didn’t seem too concerned, could be because it is SBA backed and it they have to write it off, they don’t lose much (I think that is how it would work).
The Good (CitiBusiness)
I talked with a wonderfuly nice fellow from Texas in the collections department at citibusiness. We basically did the “how much can you pay on this” dance for a bit…I made a few jokes, we bonded, and he started just telling me what payments would get me down to the 0% level on their repayment program. So I got three of my citibusiness cards down to 0% for 12 months!!! Awesome! This was definetly the highlight of the day. I dropped my monthy minimums by over a thousand dollars by going into their repayment programs. Yes, my credit score is going to suck, but 0% for 12 months is an offer I cannot refuse at the moment! I’ll take it.
Other Creditors
Staples – learned that the rate (APR) is not negotiable until 60 days. I am current on this. No joy here.
Litton Loan (1st Mtg) – I found a good “hardship” phone #, but the dept. was closed by the time I called. That is my big goal for tomorrow, talking to Litton. My payment with them on my 1st Mortgage is around $2500 a month. I need to get that down to $1500 a month for a least a few months. I’m just trying to buy time at the moment without adding more debt to the pile.
So, my monthly payments are now down to $7,469. Still not to my goal of 5-6K. If I can shave off another $1500, that would be a big, big help. I was at around $9,100 to start the week off. So, $1600 in 3 days, not bad. Just gotta get that mortgage down for a few months…
My Business (income side)
Business future is looking good at the moment. We started a new advertising division back in Sept. I testing our concept for a few months, and it worked, so we are selling our services full time now. If I can devote myself to selling for 8 hours a day, I can sell about $300-$400 a day in MONTHLY subscriptions to our services. That is assuming I can keep up our leads coming in as well. As soon as I get all my debt arrangements worked out, I should be posting more and more about my business side of things to get my income up and over 10K a month.
I’m off to a pickup basketball game with my younger brother (he still doesn’t know about any of this…I’m planning on telling him next week). I’m exausted, but a good b-ball game will make everything better!
{ 7 comments… read them below or add one }
Hi Again. Just wanted to say I enjoy reading your blog. I wish you the best in achieving your goal of being debt free in 24 months. Thats very agressive!
I’m 41, and I struggled through my 20’s, though never in such a hole as you are at 23. Today I am networth positive but no where near what it should be. If I liquidate everything and pay all debts, I will have $275K in cash. When I compare to others in my demographic I am not doing all that bad. My total debt outstanding is $378000. In 2007 my goal is reduce my debt by 2.5% and improve my cash and investment totals by 29%. I realize that I should be paying down my debt faster. But I really need to boost my cash reserves, mutual funds, and retirement accts. With low cost debt, and a market that has been getting me really good returns, it makes more sense now to shuttle cash into my investments, when rates go up, I’ll shuttle more into paying down debt. The decade of my 40’s is really where I need to build wealth.
I have a plan to live under 60% of my total Gross Income. January, I am in the hole by nearly $900, but my budget only just now got done, so my remaining year should get to a NW of $335K and debt down to about $365K.
In addition to maxing my 401K every year, I spent the last 2 years building emergency cash reserves equal to 10 months of net income. I wish this to grow to a full year, and I am spreading that over 3mos in money mkt, 3 mos in CDs, and 4mos in Strategic Allocation Mutual funds, all of these managed through ING Direct. I am now finally beginning to feel secure with the economy, and with my job again. So… I now wish to focus on building other investments.
Sorry for the long post spilling my guts on my situation. I often panic thinking I am in trouble, but in perspective I think I am good, could be much better.
Question for you. I notice your mortgage interest is pretty high on one of your loans. Is there any way to lower that? Also you mentioned you had roomates. Are they truly paying FAIR MARKET rent for what you provide as a landlord? I ask this because in my 20’s and 30’s I had friends I helped with renting spare bedrooms to. I never did research on fair market rent rates, and I was undercharging for years. If they are not paying fair market rates you need to raise the rent! Look at it this way… everybody needs to live someplace right? If they lived elsewhere they would pay markey rate. You should review what your area/neighborhood/housing style can get and charge as close as you can to market rate. Splitting the mortgage/tax/ins may seem fair (it is to them), but market rate is fair to both!
Chris, thanks for the comment and encouragement. I will look into fair market rent in my area, I think I am pretty close (I charge them $500/month, every gets their own room. It’s a fairly large house about 3000 square feet with basement).
It sounds like you are doing just fine! I just want a net worth of zero! (vs. my current mass negative situation!)
Not sure where you live.. but here in Boston, a bedroom rented out of a owner occupied home is getting 800-950 depending on amenities and what is included.
I used to charge my prior “roomates” $950 and that covered everything, rent, heat, HW, cable, broadband, electric, water bill, etc. All they had to pay extra was their own food. Elsewhere in Boston, a 1 bedroom studio goes for $1200 or more not including any utilities. So $950 was still a VERY good deal for my roomates. I own a 6 bedroom single family home, I used to rent three bedrooms out at $950 and my mortgage & escrow was less than $1600. So I am willing to bet you could come up with a number that is fair to them, and more cash for you.
Watch out for Litton. Google them.
How about instead of trying to beat out minimum payments, you just pay your goddamned bills and quit spending money that you obviously don’t have?
Litton SUCKS. They don’t care about their customers. They “passed” on a BS charge from the prior lender when they bought my loan…not sure how that is possible when they paid off the former loan. Sent them documentation to prove it was bs and….nothing. Fought it for months, finally just sold the house to get rid of them. As Ann said, google them…you’re in for it.
Hey how were you able to get 30K in WAMU SBA. What are tips for a successfull application. I would like to get a business linoe of credit from WAMU in the future