cancel
Showing results for 
Search instead for 
Did you mean: 

how to get above water with 12.5K in credit debt?

tag
Sk323i
Regular Contributor

how to get above water with 12.5K in credit debt?

I'm maxed out at 12,500 at high apr across 5 different cards all 17 - 22 %.

 

My biggest balance is 5K.

 

I just started a new job so i'm unsure how much a full 2 weeks paycheck is after taxes, but I gross $2500 every 2 weeks.

 

I spend $1600 on monthly reoccuring bills & needs + $1400 on mortgage, plus my car and auto payments = $4000

 

My girlfriend nets $1000 every 2 weeks. 

 

We are barely getting by. Not much money is wasted on friviolous things. 

 

Do I snowball method. 

 

How do I get above water?

 

Can I consolidate all 12K somewhere for less than 12%?

 

525 score as of 9/2015 --- only way to go is up!
61 REPLIES 61
happypill
Valued Contributor

Re: how to get above water with 12.5K in credit debt?

The answer ia pretty much always the same with questions like this, you either need to make more or spend less.  There are a few things that stand out to me.  First, $1600 above and beyond rent/mortgage & car payments is a LOT.  You make the comment that not much is wasted on frivolous things, but I'd love to hear what goes into that $1600.

 

Second is that it seems you've got $1k per month going towards car.  I'm not sure if that is for one or two cars, but if you're struggling to get by that is also a lot to be spending, even for two cars.

 

If you dig into what goes into those two buckets, I bet you'll come up with a lot of areas to cut.  It may seem normal to have a $500 car payment and a $100 phone bill each month, but it's possible to get by on $200 and $30.  It may seem normal to spend $100 on dinner for two several times a month but if you're barely getting by and debt is building up, then you simply can't afford it.

 

The same advice thats repeated over and over is to start with a budget to really understand where the money is going and make adjustments.

Message 2 of 62
Dalmus
Valued Contributor

Re: how to get above water with 12.5K in credit debt?

I assume your girlfriend lives with you? I hope she is contributing towards household bills (grocery, utilities, maybe even some rent).

#1 - Stop using credit cards as much as possible. Go to cash, check or debit.

#2 - You'll get better help from the numbers wizards here if you list each card, it's APR, balance and minimum payment.

#3 - Cash flow is the issue here... You might be better off working to pay off the card with the lowest balance rather than the card with the highest APR. See #2.

I've been where you are and it is tough... But as long as you have a job, it's possible to get it of debt!

NFCU MR: $25K | Venture: $21K | Amex ED: $18K | NFCU CR: $18K | Amex BCE: $15K | IT #1: $17.5K | PNC Core: $15K | PPMC:  $12K | Wells Fargo: $11K | Savor: 12K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $7.3K | MLife: $9.5K | Sportsman's Guide: $8.7K | PenFed PR: $5.5K | Elan Plat: $2.3K | TRV: $3.6K | BotW: $3K


Current FICO 8 Scores: EQ: 828| TU: 805 | EX: 814


Message 3 of 62
Anonymous
Not applicable

Re: how to get above water with 12.5K in credit debt?

1) You spoke of debt load but not of what your scores are...You may qualify for a PL large enough to consolidate the entire 12k in one loan.
That may not be an option if you've waited too long and allowed the debt to suppress your scores, in that case you've got to suck it up and pay your way down to a decent enough score to say it a 9-10k loan or so.

2) You (and your gf) have to honestly reprogram how you're budgeting your monthly $$ (now, if when you say you just started a 'new' job as in hadn't​ been working) that's one thing but if you both have been working the entire time then I stand by you guys gotta refigure how you spend
Because if she nets over 2k per month and you will net more near 4k from earning over 5k gross per month...

If your monthly nut is only 4k, as you said...then YOUR income alone basically covers EVERYTHING!

That being the case her entire $2k is up for grabs to pay down this debt IF the 2 of you actually have the WILL

But it has to be a consistent, concerted effort

Think of it with 2k you move from 12k to 10k in ONE month
Like, I said a few SERIOUS months of commitment and that debt load can be brought down well within reach of say a 6-8k PL where the % is Fixed with a lower payment to give some breathing room.

But I'm a fan of being aggressive can KILLING debt while you are still blood thristy or it will continue to creep up and around, until the 'something' ELSE in life pops up that ALWAYS does.

Ppl always says we'll I never knew it we weren't prepared....And a lot of that is during the time God or the universe, allows us CHOICE we piss it off THEN are 'victims' of timing
No time better than right now while it's on you mind and important enough to take action and keep swinging till your opponent is finish.

Again, you and your girl are fortunate enough, with your new gig to be able to KILL this debt in well under a year...IF you want to, many ppl don't have the means to do such a thing

I'll say it again her income of 2k over 6 months is already 12k...retiring 12k within 12 months should be 🍰 unless your MATH is way off!!!
Message 4 of 62
Anonymous
Not applicable

Re: how to get above water with 12.5K in credit debt?

 ***********EDIT - I should also mention that I actually wrote what 

 

How is your util?

 

What's your current score?

 

This will help. I literally just went through this, albiet we weren't "underwater" nor were we "barely getting by", we just wanted to avoid paying astronomical interest payments.

 

If your intentions are to try and consolidate and pay down, make sure your score is high and your util is low.. That litterally makes no sense as the very idea of a consolidation loan is to consolidate your debt.. But util was a factor 100% of the time and we were denied every single time.

 

We had nearly 50k in CC debt, combined incomes of over 300k, one doctor one tech professional, not a single late payment, 100% clean credit, and we were denied for consolidation loans everywhere. In the end we simply paid down our cards aggressively and now people can't find a reason to say no to us.

 

I can tell you this, 1k for cars (which I hope includes insurance) needs to be squashed asap. We have $0 in car payments, not because we paid cash for top dollar cars, but because we bought reasonable vehicles to keep expenses down. I hope you're not upside down on the vehicles. If you are not, you can start by cutting that expense.

 

Also, I hate to ask as it may be private, but can you break down the $1,600 in reocurring bills and needs? We can help you, we just need more info!

Message 5 of 62
Anonymous
Not applicable

Re: how to get above water with 12.5K in credit debt?

What City do you live in?  Get a spread sheet with creditor, balance apr and miniumum payment up and please post .  What is the car deal?  $1K for auto what the ...?  How much is your car insurance?   Do you have student loans?   Where is the $1600 going?   Many times you get spending  stuck in habits that cost money and don't think about them. Sometimes it appears the spending may need reworking. No one here is out to judge you.  Many infact have been in tough spots before.  DW and mine business barely survived from 2006 to 2009. Last year on the other hand was fantastic. We had to cut cable  tv out and dinner was a a $1 TV dinner for those three years.   We are masters of thrift.  It was not fun. 

Message 6 of 62
Anonymous
Not applicable

Re: how to get above water with 12.5K in credit debt?

It's funny how I seem to come across as 'harsh' (not from lexgugu...I'm speaking of other post in the past)
Even when I include stuff like 'if you weren't working till, now it's different ' then I use the term "but,if"

And still some folks ( including my kids btw😏) think I'm 'harsh' when I'm a teddy 🐻, I promise 😀

But those, who've heard my story know that I come from a place of working with ppl and finances for well over 20 years and it's either aggressively get to it or it gets to you.

Folks, I mean no harm...Only to cut to what needs to be DONE, perhaps w/o the bedside manner of Mother Theresa no doubt but definitely the desire to HELP!

Some ppl will say buy WHY didn't you 'cuddle' me more or tell me happy stories about bunny rabbits 1st
No offense, that's for another dude...I'm more about solutions and education on how NOT to wind back up in the same spot in 15-20 months

So who is doing whom the favor, the cuddler or Uncle Gemini?
I tell ppl I try to deliver it just like I would FAMILY in a way to Help forever not just placate for the moment, IMO folk's can save the quality of their lives if they take this ish serious enough early enough ...
Or they can live hand to mouth when it isn't necessary
I hope ppl 'get' that, that is what my passion and sometimes frankness is about...A lot more ppl could live better if they just command that they DO things differently for themselves, more ppl need to know and understand that YES they can
Count the money again, budget it differently, many ppl are NOT as BROKE as they believe...And if they actually are, then they need to STOP swiping cards for stuff they can't​ pay for (again, I think many can pay it we just get sold on the idea that we can't)
Message 7 of 62
Creditplz
Valued Contributor

Re: how to get above water with 12.5K in credit debt?

As others have already stated, this is a Income issue, not a credit issue. You or your Gf could try picking up another part time job, (if allowed). At least till you get that debt payed down.

If that's not an option, try cutting costs here and there, Try going to Aldi, food4less, etc.. look in the weekly add to save a few dollars... it adds up!
Message 8 of 62
Anonymous
Not applicable

Re: how to get above water with 12.5K in credit debt?

@ Creditplz just a little quandary...
When you say it's an income issue vs a credit issue

Am I missing it... I honestly don't see the NEED for another part time job

Dude's income yields around 4k
He said their nut is 4k
He said girls clears over 2k
Between the two that's over 6k net vs 4k

I'm failing to see a desperate NEED for MORE $$ as in drowning vs simply managing what's already in their control

The only reason, I say so is everyone always blames LACK of More and More $$$ as the ISSUE, when IMO that's a red herring to what's going on

A bunch of Americans kill themselves with extra jobs and hours only to find themselves in the same quicksand, just more stressed and tired and ticked off because the focus is on the wrong end of the funnel

It's not the warning it's the SPENDING that kills us more often, and mostly the How hides the how much

It's funny how it seems no matter how MUCH the Jones make, their solution many times is they 'just' need the Smith's paycheck, meanwhile the Smith's swear everything will be alright IF they made what the Lopez household brought in...😀
Message 9 of 62
Creditplz
Valued Contributor

Re: how to get above water with 12.5K in credit debt?

"We are barely getting by" is why I recommend another job.

"I spend $1600 on monthly reoccuring bills & needs + $1400 on mortgage, plus my car and auto payments = $4000" His GROSS income is 60,000/yearly, he spends $48,000 yearly on his needs.

His Gf nets $24,000 yearly.. now do we know if she's contributing to bills, rent?. Does she have debt herself that she needs to pay monthly?. Transportation cost if not already included?. Does she have necessities ( I know my DW does).

Anyway you look at it, OP is $12,000 in debt. I personally feel that income is the issue, extra income could go towards paying that debt faster and saving OP hundreds if not thousands of dollars in the future.
Message 10 of 62
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.