I would really appreciate any advice people can offer on the following problem.
I have $60,000 in credit card debt spread over 7 credit cards. My monthly payments total about $1000. My income places me below the poverty level, and for medical reasons I am not able to work full-time. I am supporting myself at a subsistence level through odd jobs, most of which pay in cash. My only assets are a car valued at $8000 and a house (with almost no equity in it) that is already in a foreclosure process.
I want to continue paying on my debt but cannot afford to pay more than $20 per month per card. I went to a credit counseling service (CCCS), where a counselor and I called a couple of the credit card companies. They said there was no way they would agree to take such a small amount. When I asked what would happen if I simply sent in $20 a month on my own without their agreement, they said the interest rate would go up, there would penalties and late fees, and after about 6-8 months of internal collection efforts they would either hire an external collection agency or sell the debt outright to an external collection agency.
As I see it, I have only two options: file for bankruptcy (which I don’t want to do, partly because I really do want to continue to pay what I can, and partly because I don’t want to lose my car), or send $20 a month per card on my own while the credit card companies hold the debt and then try to get the collection agenices to accept the same amount per month.