Saturday, January 17, 2009

Unsure about my financial future...

I am in over my head in debt. I have been trying to analyze my financials for the past month trying to figure out how I can make it work. My business brings an ample amount of cash flow, but the problem is that I have so much debt. My credit card debt alone is almost $200,000. The minimum payments for my credit cards totals to about $3,000 per month. Adding to this is the negative cash flow on three rental properties I own, an additional $1,300 per month. So, my total is already at $4,300 and this does not even include my personal living expenses!

I did some research on debt counseling/consolidation, but it doesn't seem like the best move for me. These companies require that you stop making payments on your credit cards and instead make an affordable monthly payment to a trust account that they open for you. Once you reach a certain amount, they contact your credit card companies and negotiate a settlement for 60-70% of what your outstanding balance is.

I have also begun to research filing a Chapter 13 bankruptcy. This would eliminate my credit card while allowing me to retain all of my real estate (it's not like there's equity in any of them anyway).

I am currently in the process of loan modifications on two of the properties I own. One loan is with Countrywide and the other with Washington Mutual. The outcome of these loan mods will determine my decision for all of my credit card debt.

On a more positive note, my business is doing well considering the economy and recession.