I'm screwed and need help......

[Anonymous]

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@Anonymous wrote:
"Start paying them from lowest to highest. Its going to take a very long time, probably 3-5 years to pay them all off assuming you can pay off 1K per month. "

This is very dependent on the current APRs. If his lowest one is 11% but his highest is 25% he is throwing money away.

I do not like this Dave Ramsey approach as its just giving money away to "feel good" which research shows is not effective when goals are years away.

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Agreed, that's terrible advice IMO.  While it'll "feel" good to owe money to less sources, in the end you're losing money by paying down low APR loans and maintaining high APR loans.

[Anonymous]

@Visper, +1,000! Agreed totally. Feel good comes with a price tag.

[Creditaddict]

Take the very little bit of left over credit lines at navy and tobyhanna and BT as many of the small store balances as you can and eliminate those payments on yourself and DONT USE THEM AGAIN... but that should get you 3-5 more cards paid off and cut out another $100+ of payments.

[happypill]

You're definitely in a tough spot.  I think you need to start by doing some basic things that, unfortunately, a lot of people don't do.

1. Determine what your budget really is.  From your post, it seems like you make about $3500/month.  Figure out what you take home after taxes.  Then, figure out your rent, utilities, necessities & bills; consider ways to reduce your monthly expenses such as turning off cable, not eating out or getting a cheaper cell phone plan.  Especially keep an eye on little things add up over time - this happens to me with hobby items.  $20 here, $50 there and pretty soon you've spent several  hundred dollars a month on stuff that barely matters.  If these things add up to be higher than the amount of money you have, then you might need to consider BK (I have no experience in this and you should definitely get better advice).

2. If your income is sufficient to cover your basic monthly budget, then make the decision that you will dedicate any money above your necessary expenses to paying down your debt.  Obviously, you realize that 10-15-20%+ interest is killing you, and will keep killing you until you pay it down.  A $5 value meal at McDonald's will end up costing you $15-20 by the time you pay it off if you make the minimum payment on your CC.

3. There are two strategies people use.  The most obvbious is to direct any extra cash to the card with the highest interest rate.  Some also suggest targeting the smallest balance, so you can see progress and feel the relief of paying one off entirely.  Either way, make a plan and get started right away.

4. Resolve to direct any extra money you have towards your CC debt (after you set aside an emergency reserve).  You have a commission job - in the months where you get a larger than average commission, use it to pay down your debt.  If you get a tax refund or annual bonus, use it to pay down your debt.  Also consider other ways to raise money.  With something like $40k in CC debt, there might be some stuff that you bought that you can sell to raise money.  It may sound sill to sell a TV you just bought for 1/2 it's price, but if you hold onto it, it will cost you tons in interest.

So, first step is to gather you budget info and make a decision on what you want to do.  It does seem that some of the stories around here at myFICO show people who recover from BK very quickly, but its definitely admirable that you don't want to burn anyone.  Good luck.

[tommywerdine]

I just made a budget for all of my expenses...

Rent, phones, car, insurance, ect = 1816 a month

that is without paying for gas and food.

gas for me is about 40-60 a month since I work 3 miles from home.

food is a little more expensive since my girlfriend and i both try to eat at home more often now.... probably about 150-200 a month

So about 2100 per month.

My credit cards are about 1117 per month...

I'm getting about $350 back from my taxes this year, so I am going to put that on paying my cards.
I have about $750 in cash at my house, which I've made in the last 1-2 months from my own business... I was thinking to put that towards my credit cards as well, and I also have $150 in PayPal from selling items.

My salary pays for my monthly nut, but not my credit cards. Which has to come from my commissions and side business. I know I can make the MIN payments on all of them, but doing that will take me around 10 years to pay it off. I'm hoping in the next 5 months to pay 2000 a month towards my cards.... but it's not 100%

I feel so stupid!

[Strogen]

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@tommywerdine wrote:

I just made a budget for all of my expenses...

Rent, phones, car, insurance, ect = 1816 a month

that is without paying for gas and food.

gas for me is about 40-60 a month since I work 3 miles from home.

food is a little more expensive since my girlfriend and i both try to eat at home more often now.... probably about 150-200 a month

So about 2100 per month.

My credit cards are about 1117 per month...

I'm getting about $350 back from my taxes this year, so I am going to put that on paying my cards.
I have about $750 in cash at my house, which I've made in the last 1-2 months from my own business... I was thinking to put that towards my credit cards as well, and I also have $150 in PayPal from selling items.

My salary pays for my monthly nut, but not my credit cards. Which has to come from my commissions and side business. I know I can make the MIN payments on all of them, but doing that will take me around 10 years to pay it off. I'm hoping in the next 5 months to pay 2000 a month towards my cards.... but it's not 100%

I feel so stupid!

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Honestly you need a second job. You cant win by just paying the minimums. 

After work see if you can unload trucks at Lowes, Wal-Mart, etc.... 

[Anonymous]

You MUST get those rates lowered if you can. You also need either a second job or to make more money at your current one.

There is no nice way to say this but you are the definition of bankrupt, owing more money than you can possibly pay back in the current state.

Is your girl friend contributing to the expenses for housing, food, etc...

Do you have cable? Cut it
Do you have home internet? Reduce the speed for a lower price (internet is almos a necessity now so don't cut it all together)
Cell phone bill? If you have a smartphone, get rid of it and get a flip phone.
Any vices (smoking, drinking, etc...)? Cut them out.

You can no longer even think about eating out, so prepare to cook a lot more, high I must say that your grocery bill is rather high for no eating out.

I don't mean to come down on you but this is going to be a very hard and long road now that I have a better view on your expenses.

[Anonymous]

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@Anonymous wrote:
You MUST get those rates lowered if you can. You also need either a second job or to make more money at your current one.

There is no nice way to say this but you are the definition of bankrupt, owing more money than you can possibly pay back in the current state.

Is your girl friend contributing to the expenses for housing, food, etc...

Do you have cable? Cut it
Do you have home internet? Reduce the speed for a lower price (internet is almos a necessity now so don't cut it all together)
Cell phone bill? If you have a smartphone, get rid of it and get a flip phone.
Any vices (smoking, drinking, etc...)? Cut them out.

You can no longer even think about eating out, so prepare to cook a lot more, high I must say that your grocery bill is rather high for no eating out.

I don't mean to come down on you but this is going to be a very hard and long road now that I have a better view on your expenses.

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All this. I did suggest earlier that the OP contact their creditors and ask about a hardship APR/Plan to pay down those balances. I also had the GF on the mind. Did she contribute to your CC debt? See if she could pitch in a little (especially if she's a keeper)

[Strogen]

Depending on how serious the GF is and what job she has, I would expect her to contribute to the CC debt payoff or at least have her pay the rent or something. 

That way you have something like $500 freed up for repayment. 

[itguy_65]

One option would be to talk with an accredited credit counseling company.  I have experience with ACCC (American Consumer Credit Counseling), at consumercredit.com.  What they do is negotiate with your creditors and get you lower APRs, which allows you to pay your creditors off quicker.  You would also make your payments via one direct debit each month, and the company will disburse the payments for you.  The bad news is that you will need to close all of your accounts, and there will be a note on your accounts that says "account included in a managed payment program", or something to that effect.  It has an effect on your credit, but not like BK does.  Once you complete the program, that notation should be removed, and you can dispute it to have it removed on any accounts where it is not.  Surely something you don't want to do, but you're in a situation you need to get out of, as quickly and as efficiently as you can.  One note of caution, if you decide to go this route, be sure to continue to make payments on time until the arrangement is fully setup with each creditor, as the baddies will stay.