Finances/debt

Lose the credit cards, you need a place to live. Owning a home itself is credit worthy once you make the payments. You can always pay the minimum to keep credit card alive till you can afford to do better.

I would first contact the credit card companies and mortgage company, let them know your situation and how and what you are doing to work it out. Document the dates, names, titles, phones numbers of who you contacted. Note what was said and what they offered or didn't offer to do for you. If none will offer any help then if I HAD to decide which to let fall behind I would choose the house. Forclosures aren't done overnight and can take months.

It is a GREAT idea to file a "Consumer Statement" (a short 100 words or less) it's a hardship letter explaining your situation, with each credit bureau: Experian, Transunion, and Equifax. The explanation remains as long as the items show on your credit report. In this statement do include your attempts to seek help ,etc from the credit card & mortgage companies. There is no charge for filing this statement and the credit bureaus must help you write the statement if you request their help.

It's a good idea to keep a copy of your hardship letter with your payment records, in case you need to recall this information at a later date.

There are levels of severity, but how a future lender views your current situation depends upon how well you documented the hardship, how you have overcome it, and what other compensating factors you now have to offset the derogatory credit history.

Check out Dave Ramsey's site (google it). He has answers for questions like this. He has a book called Total Money Makeover, which may prove helpful to you (your library probably has it or can get it for you). Go to groceryshrink.com and read her story (sign up for her free e-newsletter). She was one of the winners of his $100K Total Money Makeover contest. She talks about how to spend less and get out of debt. Moneysavingmom.com is another helpful site to cut expenses. Best wishes!

I would make my house/car payments first and in full if possible. Right now it seems you have bigger things to worry about than your credit, so I would not fret about that.

Don't believe Momof2girls who said it will take the mortgage co. a long time to take away your house. According to AZ law, they can take it in as little as 3 months, depending on how much equity you have in your home. They can also then sue you if you refinanced in the past and took out a little extra money. Next they will start garnishing your wages to get it.

I work for a lawyer and we do bankruptcies. We advise people that if you want to keep it, you have to make the payments. With unsecured debt (like credit cards and personal loans) once you fall behind the company will send the debt to collections to harass you for a while before taking you to court. It then takes about 3-4 months for them to secure a judgment before they can garnish wages or try to collect. In the meantime, you could file for bankruptcy which wipes your record clean of any and all unsecured debt.

Don't get me wrong, I am not advising you what to do. I am only trying to educate you on the process creditors must follow. It would be a good idea for you to talk to an attorney who specializes in this. Many do a free initial consultation.

Also, on credit card debt, if you are able to make half payments, and you tell your credit card company that is what you are going to do, they are more able to work with you than mortgage companies. If you talk to them, they might lower your interest rate or payment so that it won't affect your credit score at all. Good luck. I know how tough it can be.

I would think the credit cards because if you loose your home you will have a hard time finding another place to live (landlords do credit checks). Try to AT LEAST make minimum payments (not great but better than racking up late fees on top of finance charges).

I haven't had time to read the other answers but we did a non for profit organization to pay off our credit card debt. They lumped all our credit cards into one monthly payment and got our interest rate lowered quite a bit. You cannot use your credit cards while on the program but we started with 12,000.00 worth of debt and now have one year left to go with 3,000.00 left. It feels so good to know that in one year we will be debt free! Here is the link to ours: http://www.familymeans.org Good luck!

We are in a similar spot because my husband has been out of work for 4 months. We have a ton of open credit because we consolidated our debt, but now we have to start living off of credit cards to make hte mortgage and other loan payments (vehicle, student, etc.). I would let the credit cards go first though. It takes years to fix it, but nothing can be worse than going 30 days late on a mortgage payment.

Definitly try and stay current on your home before all else. Pay the bare minimums on everything else if you can or call on the Credit Cards to try and come up with a compromise. When you fall behind on your home, it will impact your credit rating for a long time. Not paying your mortgage will negativily impact your credit the most. Hope this helps.

IMO you need a place to live so try calling the credit card companies. A lot of them will work woth you to reduce monthly payment for a year or more till you get back on your feet. They can also work to reduce your intrest rate and if you work with them they do not report to the credit bureuo so it will not effect your credit score.

House, electric, water, those all come first. Credit cards can wait.

Definantly let the CC slide first. Shelter, food, utilities are imminent needs. No matter what you do your credit score will suffer so at least make sure you have a place to live.

Juggling isn't easy. How much rent could you collect for your house from someone else? Would that rent cover your mortgage? How much would it cost you to rent?

I love thinking outside of the recommended box. Most people are determined to try to stay in a home they cannot afford. Even if you decide, to let your house go or the credit cards, rebuilding your credit is as simple as consistent payments over time and keeping a close watch on your debt to income ratios. You do have other options besides the ones listed here.

If you could get additional income while you are trying to sort things out wouldn't that work for you? You could even hire a real estate company to manage your property for you for a fee which would come out of the rent received. Just some added food for thought for you.

I was having a difficult time with some of my rental property. I made some interersting decisions to help me through some difficult times. I still have my property. My credit isn't the best right now but I am working on it and I am now saving money like never before.

Don't think with your emotions. Think practically and do the things you really need to do and you will see a great difference over time which will be for the best for your family.

Interesting question, either way your credit will be effected, but there are lots of things to consider. The main thing to consider is how temporary is this? Another thing to consider is do you have a 401K, and would you consider making a hardship withdrawal? How many credit cards do you have, what are the balances and what are the minimum payments?

As far as the mortgage goes, you need a place to live. But if this is temporary and you fall behind a few months, it will take the mortgage company a long time to start foreclosure procedings. Facing eviction or foreclosure is a valid reason to take a hardship withdrawal from a 401k, paying off credit card debt is not. Also take into consideration late fees. The late fee on your mortgage is probably about the same as on one of your credit cards. You could also try calling your mortgage company and try to make some type of temporary arrangement, maybe you can make a principal and interest payment only, and wait to make the escrow payments.

As far as credit card payments, if you are not making at least the minimum payment each month, it'll show on your credit card report as a late payment. If you have 3 credit card payments, would it be possible for you to make the minimum payment on 2, and only a small payment on the third. This is better than making small payments on all 3.

Whatever you decide, be sure to write to all 3 credit reporting agencies, explaining your current situation.

I've found a lot of great articles on www.msn.com in the money section about credit scores and how they are effected. There may be some information there that would help you.