drowning in debt Was tempted to steal toilet paper.Looking for advice

[Anonymous]

I am looking for advice. I am drowning. I do not know what to do. I am not behind on anything yet but I am afraid I will be soon. I have already cut up all my credit cards and have not used them in 3  months. I am paying minimum and a little extra when I can, but it does not seem like the balances are going down any at all. I am wondering if it is because of the super high interest rates on all of them.

My credit score is around 600 and keeps going down. My biggest cause is credit utilization

Net Take home pay

$1600.00 to $2100.00 depending on if we have overtime at work. When we have overtime it is mandatory so it makes it hard to get a part time job which is something I have considered

Monthly debt

Mortgage $480.00

Car Insurance $65.00

Student Loan (in income based repayment plan) $141..00

Electric $85.00

Gas $43.00

Water $80.00 (average in my neighborhood in $120.00)

Entertainment $9.00 ( I just have netflix and I have free internet through my employer)

2 Cell phones Verizon-$85.00 ( $40.00 of this is phone payments I am not sure how to get out of this)

Taekwondo-$149.00 under contract for one more year

Misc food gas for car-$50 to $150 per month depending on amount of paychecks (we eat a lot of pancakes and ramen noodles and pbj I have gone to a food bank as well and I work from home monstly so I don’t spend much on gasoline)

Credit card debt minimum payments monthly total is 510.00 per month

Barclay $4185.00 limit $4500.00 APR 25.99%

Capital One $6287.00 limit $6500.00 APR 25.09%

Amazon $800.00 limit $830.00 APR 26.74%

Walmart Card $925.00 limit $1000.00 APR 23.65%

Target Card $ 890.00 limit $1300.00 APR 23.65%

Local Furniture store Synchrony credit $1350.42 limit $3300.00 APR 29.99%

Kohls $ 135.00 limit $300.00 APR 23.65%

[Anonymous]

Is your monthly take home $1600-$2000 or that is per check? 

You say you have a mortgage, so this means you are a home owner? I think your best bet would be to get a home equity loan. You are $15,000 in debt so that would be all you need. It will increase your mortgage payment but overall your monthly output of payments would lower. 

Otherwise your options could be to try to get a personal loan (preferrably through your credit union) or file for bankruptcy. I think it would be a shame to file bankruptcy for $15K of debt but I am not in your shoes and do not know your full story. 

[Anonymous]

One thing you can do is google credit card snowball plan. There are a few different versions. One way is to pay off highest balance first, another is high balances first, and another example is low balances first etc. a few different ways to do it.

Another thing you can concider doing is maybe drive for a ride share service like Lyft or Uber. This way it's no set schedule. It's when you can drive.

[Anonymous]

I am not an alarmist type... generally try to get ppl to see where they can reprogram spending change habits vs BK

However, in this case your income vs what you've already indebted yourself to seems just too far out of whack...
With that income, part-time job or not (only so many hours in a week, period) the numbers don't work ESPECIALLY with those above 25% apr's REVOLVING every month

The ship is sinking, why KILL yourself attempting to save it with 2 mop buckets and no crew, either way the ship is gonna sink, there is NO SAVING her with those numbers.

Sometimes you just have to take it on the chin and LEARN from your mistakes....

1) Obviously overspending...no way that amount of debt can accumulate w/o negligence, we MUST be honest with what we've done or we'll muck it up again
Two cards alone have over 10k worth of basically 'stolen' had no way to pay for it ish on them...this can't happen in the 2nd act a few years from now.
Just can't, period.

2) Bk and a period of strict budgeting may help prep one for the next go at it, again after Bking or just allowing it all to go to ish for a few years and then making a come back

Again maybe NOT the preferred 'emotional' option but w/o a rich Uncle IMO at this point what's the point

Again JMO but HOW from a prudent financial POV ( and Yes, I'm in financial services) I couldn't in good conscience tell my client to pay 25-30% of take home to service minimum payments of REVOLVING debt with no end in sight = Hell no


A few thousand, ok we can save ourselves, eat some 🍚 and beans but here there is NO 💰

On 'great' months there's "maybe" $700-$800 or less than $200/wk vs ANY & EVERY THING else life throws our way???

There is ZERO chance in hell I'd advise a person to send $500 of the possible $700 rest of life 💰
Nope, it's time to Chipmunk = SAVE that $700/ month and be READY when it's time to play to game again with a new outlook and new RESPECT on how to play

Stuff 💰 in retirement funds, coffee cans in the barn but at this point allowing it to be burned @ 29% with no end in sight us just hurtful to watch
I'm sorry I couldn't do it

Yes, you messed up
Yes, you bit off more than you should
Got it, you done wrong
But IMO it's better to take your lumps and get it over with vs starving your family, limping along DROWNING only to still take lumps anyway, cause it coming

Pull the cord, planes crashing either way

It's like if the repo mans coming don't fill up THAT day😀

[CreditInspired]

Oh Gracie, you're right. This is a lot of debt on your income and I feel for you.

IMHO, because a PT job is not an option, and you're only paying the minimum on all CCs and truly struggling, it's going to be difficult to do the snowball method. BK may have to be one of your options. I'm not recommending this, but don't rule it out either. You could also checkout Consumer Credit (the free one--not one that charges) to get assistance with a repayment plan, where they work with your creditors to restructure your payments. If you do go the BK route, it's better to consider this sooner rather than later.

Also, you are correct about minimum payment not making a dent in the principal. Because the APR is so high, you are paying only the interest amount and there also may be negative amortization -- where the balance itself could possibly increase if the min pymt doesn't cover the interest.

Some other things you could consider while weighing your options. The first thing you could try is to call the CC companies and request APR reductions.

The second thing -- is it possible to request more OT, such as taking a coworkers OT if that person doesn't want it. OT is better than a PT job because it's at time-and-a-half. If this is a possibility, then you should take those extra funds and pay off Kohls, Amazon & Target, in that order.

Is it possible to get the student loan deferred or recalculated to a lower amount?

And lastly, do a yard sale and take any monies made and put toward debt. It is true that one man's junk is another man's treasure.

GL to you.

[yfan]

First, stop paying taekwondo. I don't care if it's under contract. Cut out Netflix, even if it is just $9 a month. You said you mostly work from home. So could you do without a car? Since you noted no car payment, I assume you own your vehicle outright. If you could sell it you would get some money and save on car insurance etc after accounting for other transit costs.

You should also know that if you closed your cards tomorrow and stopped paying on them, they'd all go to collection but would drop off your report in 7 years. That's longer than it would take you to get out of bankruptcy.

Not necessarily recommending this, but I don't see how bk is a better option. If you can get a HELOC though that might be best.

[Anonymous]

Yfan is closer to my thinking ( Creditinspired obviously means well but Consumer Credit , yes the 'free' one funded by the very creditors you owe very well may put you on a plan to play till hell freezes over... remember the 'industry' is cool with you 'barely' paying but being 'on-time' up until the time we see Jesus.
They will allow you to minimum pay or water and 🍞 for 40 years
But numbers don't lie....
No matter how much % one stops, the outstanding debt is still a MOUNTAIN to be chipped away at, if all you're working with is a plastic spoon, it's time for re-evaluation.

Where I understand the tough love e approach @yfan is coming from truth is NetFix is an emotional red herring at this point THAT $9 isn't worth adult conversation towards solutions and what to do NEXT

That punishment talk, we're past that the OP and family still have to live and Netflix ain't the straw to waste time on, that $2/wk isn't why we're here and won't get us out or everywhere near one needs to be...

The OP obviously has a paid for non-that-new car based upon the car insurance expense and quite frankly the OP might just have a non-owners policy that many responsible people have just in case, like renter's insurance most ppl never get it but not the worst idea.

Point being IMO not having a beater car or Netflix are too minor and petty to be of any real importance the OP could live in the stix, where basic back n forth Transpo is too much of a premium to NOT have access to a basic ride to the doctor or post office or grocery store vs paying some outrageous cost a few times a month
OP mentioned gas usage was low so $65/mo + occasional gas is very FAIR in modern times in the modern world as NOT an over the top expense

To sale the beater and get what $1500-$2000 is gonna do NOTHING in the big picture, except possibly make trying live day to day and recover that much more difficult...to owe $30k vs $32k = not practical

The other stuff I'm better with
As I mentioned earlier allowing the cards to go to collections, charge-offs etc may save the OP's life ( marriage, in some cases) vs killing one's self over spilled milk....

The don't pay and wait 7 years isn't necessary 7 years btw... after a few years, as I mentioned rebuilders can many times be very much back in the game much sooner than that

Building around aged bad accounts, while negotiating deletions and paydowns etc can have a rider back in a nice saddle in much quicker than the advertised time frame, especially if as I mentioned earlier one packs 💰 to negotiate with....things look and feel much different to lenders and debt buyers once a debt has aged 1-3 years
At that point 'some' 💰 is darn sure better than chasing the NO 💰 they've gotten the past 20-30 months

Plus with some cash the rebuilding can being with secured TL's
Installment accounts, Revolving accounts and again the rider is back riding, different horse but perhaps a better use of time and funds ALL things being equal and evaluated

[driftless]

I am involved in a not-for-profit organization that provides apartments for single families who are homeless or at risk for being homeless.  It is a two year program and at the end the families are self-sufficient.  We assign two mentors to every family and they meet with the family weekly.  First item that is discussed is budgeting and reviewed weekly.    Most our clients are in far worse shape than the OP.  If you eliminate every restaurant purchase, Starbucks, etc., and cook from scratch, while eliminating all necessary expenses folks do pull ahead.  It is often a full two year process.  I think that the OP is doing the right things, but perhaps could use some encouragement.  Food pantries are great, so are thrift shops.  We have a resource center that can help with staples like TP, maybe the OP's community has one as well.  I would suggest finding a support group, friends, family, church, etc., who you can interact with and not worry about being judged.

Remember that some of the credit card companies will work with you during tough times by extending hardship agreements, it does not hurt to ask.

Hang in there Gracielove!  It is tough but I bet you can be better off in a couple of years if you stay focused.  

[driftless]

Post-Script:  I would not rule out a PT job, perhaps you might find a flexible PT employer who will accept the demands that your primary job places on you?

[SouthJamaica]

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@Anonymous wrote:

I am looking for advice. I am drowning. I do not know what to do. I am not behind on anything yet but I am afraid I will be soon. I have already cut up all my credit cards and have not used them in 3  months. I am paying minimum and a little extra when I can, but it does not seem like the balances are going down any at all. I am wondering if it is because of the super high interest rates on all of them.

My credit score is around 600 and keeps going down. My biggest cause is credit utilization

Net Take home pay

$1600.00 to $2100.00 depending on if we have overtime at work. When we have overtime it is mandatory so it makes it hard to get a part time job which is something I have considered

Monthly debt

Mortgage $480.00

Car Insurance $65.00

Student Loan (in income based repayment plan) $141..00

Electric $85.00

Gas $43.00

Water $80.00 (average in my neighborhood in $120.00)

Entertainment $9.00 ( I just have netflix and I have free internet through my employer)

2 Cell phones Verizon-$85.00 ( $40.00 of this is phone payments I am not sure how to get out of this)

Taekwondo-$149.00 under contract for one more year

Misc food gas for car-$50 to $150 per month depending on amount of paychecks (we eat a lot of pancakes and ramen noodles and pbj I have gone to a food bank as well and I work from home monstly so I don’t spend much on gasoline)

Credit card debt minimum payments monthly total is 510.00 per month

Barclay $4185.00 limit $4500.00 APR 25.99%

Capital One $6287.00 limit $6500.00 APR 25.09%

Amazon $800.00 limit $830.00 APR 26.74%

Walmart Card $925.00 limit $1000.00 APR 23.65%

Target Card $ 890.00 limit $1300.00 APR 23.65%

Local Furniture store Synchrony credit $1350.42 limit $3300.00 APR 29.99%

Kohls $ 135.00 limit $300.00 APR 23.65%

---

Congratulations on cutting up your cards.

My recommendation for you is to use the snowball method.

Pay the minimum + $5 each month on each account other than the one you're concentrating on.

Concentrate on the account with the lowest balance.

Pay the Kohls card off first.

Then move on to Amazon, then Target, then Walmart, and so on.

The reasons it works: (1) Each time you get rid of a balance, you can then use the money you would

have paid on that one to the next one. (2) It builds morale to get rid of a debt.