Advice Needed - In Debt

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joycelyn ong

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Help!I desperately need some advice from you all.

Problem no. 1:

I am married,pregnant and in debt of more than 20k from credit card bills due to extravagant spending in the past.

It has been 2 years and the outstanding sum are snowballing with interest adding up every month and I have been struggling very hard to meet the minimum payment.

Now I realise my mistake and has not been using my credit cards for the past 2 years but I still cant pay my debts with 24% yearly interests snowballing.

To be honest, I am still keeping a car. I know I cant be owning a car at this point of time but I cant sell my car for several reasons:

- My job needs a car and w/o a car i would have to give up my current job

- I might end up in a job with a lower pay ( as I have no other experience in other fields of work) and yet still got to pay the bank the loss I have incurred (abt 15K) in instalments

- I cant quit my job now cos I am pregnant and I have $0 savings.

- If i sell my car now,i would be in another debt of 15K

Keeping a car is really expensive in Singapore.I pay more than 1K per month to upkeep the car and that is excluding maintenance,half yearly road tax and the yearly expensive insurance.

Though I am using my car to work for my company, they only pay for my petrol and carpark fees.

To conclude: if i sell my car, i have to settle for a low pay job and end up in bigger debts.

Problem no.2:

My baby was unplanned and at times I really hope I am not pregnant at all. (I am currently 2 months pregnant).I decided to keep the baby as I am not young anymore.I am 31 and my husband 33 this year.

After i give birth,there'll be no one to do confinement and take care of my baby for me.(Mum and MIL are both working full time to make ends meet)I cant afford any confinement lady with my current financial situation.

Having a baby is going to add up my monthly expenses and my ability to repay the bank is diminishing and I might just end up in more and more debts with interests and miscellaneous bank fees adding up.

Though i am lucky to have a supporting husband who give every cents of his salary to me but he's not making much despite working very hard.I felt guilty that I got him into my debts.

We are staying in a resale 4 rm flat and is oso struggling to pay the monthly instalments/household and other miscellaneous bills etc....

We cant sell our flat cos we just bought it not long ago. And even if we sell our flat now, it's a negative sale; meaning we wont get a single cent out of the sale cos we bought at quite a high price.

I think I seriously have some problems in managing $$$

What do u think I should now?
 


Hi Jocelyn

I empathise your situation. Credit cards company are like "legal loan sharks". Though the debt has incurred, at least you have tighten up your purse now and it's not late. Afterall, we are human beings, we do make mistakes and let alone we are women. I would advise the following:

1) declare bankrupt - at least the sum will be a fixed amount and the interest will not keep rolling. Once you declare bankrupt, the Bank will let you pay instalments.

2) Negotiate with your Bank to let you reduce your outstanding loan. I do have friends and colleagues who are also in debt and they have tried to negotiate with the Bank. Just gain their sympathy and explain the situation to them. Honestly speaking, I have a friend whose husband owes the Bank $10K and after negotiating, the Bank give him a discount and he only have to settle $7500. Maybe you can try.

3) If your car is more than 5 yrs, can consider selling your car and get a more economical one since your current car maintenance is more than $1K and that excludes roadtax, insurance etc. You can't save on the roadtax, petrol but you can save on your monthly car instalment and insurance. I'm sure there are other economical cars which also give good performance. For myself, I'm driving a Hyundai Getz for a yr plus, monthly instalment is ard $500+, if including petrol and parking is abt $1K. Also you can look for cheaper car insurance. I do have lobang for this. Can help you on this if you are keen.

Above are just my personal advise. You may wish to give it some thots. Btw, are you a Christian/Catholic? If you are, then pray. I strongly believe God is a gracious God and He is good all the time. Will pray for you to have financial breakthrough. Good luck!
 
Hi,

To begin with, perhaps you want to put aside 5% to 10% of your income first and don't touch it. Use it for rainy day purpose or investment. This is what they call pay yourself first. Its hard but you will adjust to it soon.

You should seriously consider selling your car and use the money saved from maintence fees, road tax and etc to pay off your credit card debt first. Credit card debt is a killer. Alternatively talk to your co and see if they can help subsidise on the petrol, maintance and etc as part of employment benefits.

As a suggestion, perhaps you can spent a bit of time & effort and keep a record of your expenditure for a week, or even better for a month. Then you'll have a clear picture of where your money is going. Sometimes small little things add up. Kill those little money suckers (sorry for being crude here).

There are many books available on the subject of personal finance. Borrow some and read it. Money is a difficult animal. Either you tame it or it will kill you.

Btw I am no money expert, just that I have a particular interest in this subject
 
Hi joycelyn

Suggest you cancel all your credit cards now and negotiate with the bank to repay back your debts by monthly instalment. Won't advise to declare bankrupt over 20k debts. Write to the bank to explain your situation and neg for lower monthly repayment of the outstanding at a lower fixed interest. Take care.
 
Hi everyone,

Thanks for all your advices.I really appreciate that.

JesusAngel,

I do not consider declaring bankrupt over 20K debt cos that means I would have to loss my freedom for at least 5-7 years, i cant own a car and my all tangible assets in my house would be seized for repayment. It's a very serious decision and I'm afraid it would jeopardise my future carreer opportunities.

In fact now I am trying to negotiate with the Bank and see what can can be done. Let's hope they can sympathise with my situation.

I really regretted all these mistakes and if given a second chance I would choose to live within my means.

I hope I can gain my debt free status soon and start my life afresh again.
 
Been thru this before, tough at first , but u'll get thru it.

1) sell your car (although you will incur another 15K debt, bringing your total debt amt. to 35K).

2) change job if you have to (of coz find one first before quitting and selling the car and all.)

3) don't know your salary is how much, but if take home got at least 2.5K, you will be able to repay you debt in 2 yrs max 3 yrs if you plan carefully. there is no quick way out of it. this is the price you have to pay for poor money management.

4) best is if you can find someone, rich relative or friend to help you settle your debt with the banks once n for all. then u slowly repay this person everymth by installment. this way, you save on interest.

5) try not to be too stress since already pregnant. take care!!
 
hi jocelyn,

wat u can do is instead give up all your cards. call the banks, tell them that u want to cancell your cards and change all the current debts into installments basis. neg for lower interest. as low at like 10% - 15%. then they will spread the sum over say 3-5 years, bring yr monthly to a possible 150 per account per month. then u wont feel so stress. try it. but remember, by doing so, chances of you getting a credit card in the furture become very low. but to me, better than being bankrupt now. or if you have say 5 credit cards, cancell at least 3 of them.

i been thru the sitatution you have been. and is still paying off my debts. no saving everymonth but at least no one come knocking at my door with lawyer letter anymore.

dear advise,

if she sell her car, she has to top up 15k. 15k has to be paid out and cannot be add on just as debt and convert to monthly installment. if she has 15k, i think she will be able to clear a whole good part of her debt oready.
 
Agree with waterboy...if I am not wrong the bad records will be kept for 5 years after which it will be 'deleted'...not sure if I am right on this or not.
 
Hi folks,

Thank you for your advice.

Think I will approach Credit Counselling for help.Hope they can work something out for me.

According to 1 of the banks I spoke to, if I chose the "release plan", the bad record will stay with credit Bureau for 5-6 years.That would means I will have difficulty applying for any bank loans in the future.

But anyway, it doesnt matter to me anymore cos I have no intention to take out any more loans or credit cards. I have learnt my lesson the hard way.

I am really having a very tough time settling all these debts.I lost sleep as many as a few nites in a week pondering over these problems,though I know it's not gging to help by worrying.

My golden advice to all the ppl out there is NEVER NEVER fall into debts, the interest is gging to kill. It's wiser to stay humble and spend within your means.

Hi Advise,

Your suggestion is quite good but unfortunately I cant think of any close rich friends or relatives who can fork out this sum of $$ to help me.

I seriously hope I can get out of this shit and start my life afresh with my husband and my future baby.
 
hi Joy,

have u tried borrowing against your insurance policies? if u have 4-5 running, u may be able to raise 15-20k depending on maturity... u pay interest off it but it doesn't affect your ratings and keeps your financial future with banks pretty secure... u might like to explore other forms of loans from co-ops etc... hope it provides u with another avenue...
happy.gif


ps: took me 4 yrs, starting at 1.5k job, from 99-03... to clear abt 30k+ of debts... close to bankruptcy.
 
1st is source of income - i went for the highest paying job tat doesn't look at my academics, uses my best traits and worked my way up...

2nd was to source financial help from NON-Frens. so insurance was my best option... worked out a plan for payment for debts. my debts was to Far East Org n Amex.

3rd was cutting down on expense - sold my car, eat just 1 meal a day (lunch). threw myself into work n had no life altho i catch up with frens frequently (they were understanding enough to choose less expensive places for coffee).

4th was just to carry on working hard to improve my pay n commissions... my pay on the 4th yr was abv 4k... n i got good bonuses beyond 3mths to help.

if u can manage 1k a mth, a 20k-30 debt is nothing... everything just takes time.
 
Hi Joy,

I use to work in law firm and my boss specialise in doin bankruptcy matters...so i seriously wouldn't suggest to declare bankrupt...instead go talk to the bank let them know ur situation they may consider T&C without goin through their appointed lawyers...20K of debt is still consider ok...i've done a case where a lady owes the bank for 40k over from credit cards....so how?? she also clear it through instalment but of course was sued bankrupt.

I believe with the amount you owe you can do it in 3-5 years but you'll have to do it the hard way out.

And do take care as you're havin a baby the baby's growth really depends on your emotional n physical aspect...i'm sure you'd want a happy n cheerful baby rite?

Be strong n stay strong.
 
thanks powder

frais bleu, could I ask you why the lady was sued bankrupty? did she try to negotiate with the banks ?
 
she was sued because she couldn't pay off her debts despite the bank giving her discounts on the interest...well i guess she did nego but still can't pay the amount tht the bank gave....tht's why i say with tht amount of urs it's easy...trust me there're ppl worst then you n at least now the law is not as strict as it was years back.
 
hi debtgal,

i went to CCS, credit couselling b4. but they arent of much help. first, you need to attend a talk and then wait for 3 months after you submit your papers b4 they are willing to see you. the charges are much lower than the commerical credit considation company but they take way too long. if i had waited, i would have been declared bankrupt.

instead, i paid 500 (250 in each month) to a commerical company who help me neg with banks. i didnt neg all the banks myself cos some bank refused to speak to me. or rather, refused to bring down the interest. this co help me to talk to them and did manage to bring down the interest and the montly installment. if you are keen, i can give u the contacts. it is free to just talk to them. after which if you want to, then they will charge you a fee for it. fee defer from case to case. let me know if you are keen.
 
hi waterboy

yes i can keen, could you provide me with more info ?

thank you.
 
Hi Jesusangel

Need some advise from you on behalf of a friend. I would like to help him negotiate with the banks for a better interest rate / discount. Can you please email me at [email protected]?

BTW I'm christian too... God Bless
 
Hi waterboy,

I am interested to have the contacts of the commercial firm too.

Thanks a million.
 
hi debtgal and jocelyn,

contacts as below:

Synthesis Consultancy
58 kallang pudding road
#06-01 Singapore 349330
Tel: 68463077

u can look for a gal called christie

i hope it will be of some help.
 
hi waterboy

thanks for the information.

before you go to them, are you able to meet the minimum payment each month? after you went to them, how long did they take to negotiable with the bank ? and also do you need to continue paying the minimum amount while they negotiate with the banks?

please advice.

thank you.
 
hi debtgal,

be i went to them, i couldnt meet the minimum payment for all the banks. so what they do is they help us neg with banks for a lower interest and lower installment monthly. from 400 to 500 per account, i now pay 120 - 150 per account. i take a longer time to pay no doubt but at least i can meet the min.

they take abt 2-3 months. in which during this process, you just pay them a $X for their service, $x for each individual bank. while the neg is going on, they will help us pay the bank with this $x. could be $150 or $100 per account etc. so we just write them a cheque and they will settle for us.

do note however to give them a ring b4 ging down to see them. i think they need some documents from our end.

hope this help.
 
thanks waterboy

but is the payment to the agencies for their services, izzit for every mth till our debt are cleared ?
 
hi debtgal,

the payment for their services is a lump sum. depending on how many banks u need them to help you neg. i asked them to help me neg for abt 5 banks and i paid 500. plus 30 admin fees. and they allow me to pay 250 each month for 2 months. Neg will take abt 2 - 4 months i think.

best if you call them and arrange for a meeting. the first consultion is free. go ahead and see how they can help. no harm done.
happy.gif
 
hi waterboy

thanks.

one of my bank called me and urge me to make payment, if i don't, they will cancel my cards.
I have yet to go to the agency, should i ask them to cancel my card or should i borrow money from friends to make the minimum payment first, after that go to the agency for help?
it is a foreign bank.

please advice.
 
by the way, aren't you worry that the negotiation fail ?then you waste your 500 bucks.
 
hi waterboy, how long is the 1st consulation? if my bank record is not very good already, will they still be able to negotiate with the banks & come to an agreement? thks.
 
hi jolyn88,

yes, they will still be able to help you. first consulation is free, last for maybe half hour to and hour.
 
How about doing a balance tranfer from other banks? Some are offering pretty good rates of 2% PA

Just remember that if you go through CSS or other private firms your credibility with the credit bureau will be affected and it will be tough to get a loan in future.

The reason why the banks will call you after your use the services of the private agencies is because they want to counter offer you by giving you an even better offer be it interest rates / repayment rates/periods or payment amount - why would they want to go through a 3rd party and let the private firms earn from them?
 
hi pinkblusher

i've did some transfer to those cashline kinda of stuff few yrs back. but bcos of my hb's senseless spending, it doesn't take long for those accounts to burst oso. now, i dun think any bank will let me apply new accounts neither do i want any more of it. juz wanted to repay watever accounts that i'm holding as fast as possible.

u mentioned that the banks will call u up to offer better terms, do u mean taking up their offer will be better than engaging the consultancy's service?

somebody have mentioned (can't remember where i read it on this forum) that the bansk will call & call during the 1st mth when after we engaged the consultancy's service, i thot the consultants will settle it with the amt we've paid? a bit confusing......
 
Hi jolyn88

Yes, that is right... pick up their calls and work something out with them even if you have engaged the services of the private firms. Banks do not like to deal with private firms and would only advise you to go to CSS (which takes a long time for the application to go through like what Waterboy mentioned above), which is the only government linked board that they are willing to work with. In my opinion, use CSS/private firms only at the last resort as your rating at the credit bureau will definitely be affected.

HOwever if you are only making the minimum payment to the banks every month, chances are you have already been blacklisted.

Since your credit line has already been busted even at those cashline accounts, I suppose you can give CSS a thought.

Hope that helps.
 
hi everyone,

Me too also have some debts but not that much, about 6K but we are afraid that the money will snowball. Every month im repaying back $300 a month but the interest is high so the repayment is slow, we thought of lending money from GEezycash to repay the credit card bills at least GEezycash is 1 time interest not as siong as every month interest from credit card co.

Do you all think its a good idea to loan from GE ezycash?
 
for 6k, if u are a person who can faithfully pay your loans, then i suggest u borrow from family or fren. but pls make sure u can honour your loans...

but i do suggest u liquidate/sell some of your stuff which u dun need. u'll be surprised how u can raise money by selling stuff... then after tat u can borrow against your insurance policies.

try to spend less, ie NO new handphones/no excessive sms/long phonecalls, NO expensive food n limit your movies to weekdays etc...
 
hi pinkblusher

will i be able to terminate the consultancy's service after signing up with them & then taking up a better offer by the banks? will i be breaching contract in a way?
 
very troubled
what powder suggested is right... think 6k, it's best u try to get a loan from friends or family rather than go to GE ezycash cos end of the day, GE is still a 'legalised loansharks'. Try not to take up any loans from any banks or company... 6k is not too large a sum, so it's better to get from friends or family. Just make sure u repay your sum... spend less and save more. Self discipline comes in here.

Just dun use one bank's credit line to pay the other credit... end of the day, the ball just get bigger.
happy.gif


sigh...that's the danger of using credit cards... paying the min sum also no use... interest itself can roll and the amt just get bigger... allt he best.
happy.gif
 
I was watched the Oprah show during one of my off days. She had a few episodes helping ppl to clear debts. I share some of the information i gather frm the show.

1) Check your expense. Cut down on unnessary expenses. E.g. eating out , clothing
Eating out really incurr alot of cost. So it better to cook at home. And also cooking at home means you can control cost.
Min. shopping
Save every dollar Cut utilties bill- water , electricity.
2) Call up the bank to waive your annual fee. DONOT close your acct. You will lose your negotiation power.
3) Monitor your payment. Remember to make payment promptly. Do not incur late charge etc.
4) Pay off any acct as possible. You shld check which credit card/loan you can clear faster and clear it as soon as possible. You shld try to have as few acct as possible to avoid late payment etc.
 
If you are in debts (credit card), it is not true that you cannot use 1 credit card to pay off another.

Firstly look for special deals. Nowadays, banks are very agressive and will give you cash advance with low interest (3-4%) some even say 2%. If you are paying credit card with interest of 24%, it make sense to take cash advance from special deals to pay for the high interest loans.

But please take note that the new loan should be from an account that you owe 0 dollars. This is because if you still owe them money (outstanding balancing say at 24% interest), there is no point in borrowing more money from this say credit card (even if the new loan amount is charging very low interest) because whatever money you pay back the bank will be against the one with the lowest interest rate. This is how the bank works - you have to be careful.

Or there are actually better deals. Some bank will have 0% interest for fixed period (6 months) and only charge you 1 time fee of 2% up front. This is ideal if you can repay your loan within 6 months.

The other thing, NEVER be late for payment as it incur late payment charge. And normally, try to pay a couple of dollars MORE than you owe. There are at times hidden interest charges (epecially cash advance) that you may not be aware of - it could be really small, just in cents but because you did not pay them, you are slapped with late payment penalty of a fix amount.
 
Simple man.. agreed.

If you can transfer the loan to another bank with lower interest. It's very good, just remember to close the other acct when you do that. Cos' having too many loans with different repayment dates will cause you to make late payments.

You need to also control yourself from occuring new expense with your increase credit.
 
im currently in debt of 50k...still snowballing...i use 0% bal trf to help me clear those tat r overdue and r incurring at 24%...every mth i make min payment to those 0% ones and make more to those of higher interests...i hv 0 savings every mth and usually when i do not hv enuff to pay the remaining bills towards the end of the mth i will 'borrow' fr those accounts that i hv previously made payment! situation is v v bad, i know...i hope i can get out of this mess more effectively...will negotiating with the banks really help? will they really entertain us and lower the interest rate?
 
4evermistake
happy.gif
you need to plan your expenses & monitor your payment.

That's what credit company do. I used to run into debts also. But after a yr of faithfully setting aside 2k to repay the bank. The amt is drastically reduced.

Personally, I more prefer to pay off the credit line as soon as possible. Instead of always transfering money from acct to acct. Sometime, you missed payment also, there is a tendancy to used up the credit amt from the new line. *sigh*
 

hahaha eh hcs u got sell pc games one? i lookin for 1 lehz

heyz joycelyn.. i'm glad u have considered ur available options so far.. and perhaps talk to more ppl could give u insights as to how to handle ur finances better.

more impt, DO your SUMS.. im serious.. im sure u got excel rite?? do a cashflow analysis of ur monthly income and expenses.. then do analysis by adjusting the figures based on the options available to you..

if not how would u know if ur really making a better choice?

u need to know how much u can put aside.. how much loan u actually gotto pay and how much would it change.. and also how long would it take for u to pay off the debts.. etc.

and when u sit down and really look at the figures, u probably be shocked at how much u spend on each items..

look arnd for frens with accounts or finance backgrnd for help if u cant handle.. and someone to be accountable to do u can maintain ur discipline in mananging ur money..
 
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