I'm new and looking for advice :)

[Anonymous]

So here's the skinny- My husband and I have gone through 6 layoffs over the last 8 years. That's not even an exageration. I've been in and out of the hospital due to a chronic illness that I have as well so a lot of our items in collections are medical debt.

We have 5 revolving credit lines that are current on payment but have a ridiculously high credit utilization (mainly due to my parents dying this year, we ended up using credit during funeral planning and what not on the other side of the country, this all happened 3 weeks after we had another layoff.)

Currently, we have about $1500 in savings and are also contributing to that each week, around $100 minimum. Our goal is to buy our first house 1.5-2 years from now and we are aiming for $20k as a downpayment.

Revolving credit is as follows:

Name of Debt       How much owed?          Limit                 Monthly Payment Amount

Capital One                   $742                          $750                $50 17th of each month

Premier One                  $411.25                    $400                 $30 on the 17th of each month

Gettington                      $472                          $500                 $20 - 22nd of each month

Fingerhut-me                 $377                         $400                  $30 - 5th of each month

Fingerhut-husband       $166                         $350                 $15 -  5th of each month

We have about 10 accounts in collections, most average around $200, some lower, a couple are $1000, one is $700. About 5 of these are all owned by the same collection company.

We also have 3 judgements listed on our accounts. One is listed as paid as it was done by mistake. I've tried disputing it and nobody will remove it, still a bit ticked off about it. The other 2- one is $4,000 and one is $1,200. We've been making small payments on both but are planning to ramp it up now that we have more money coming in again.  

Starting in August, we will have an additional $900 freed up because of things being paid off. My husband's student loans come out of forebearance next month and I'm curious if it would be more beneficial to put it back in forebearance while we knock more debt out, or start paying (it's around $1,000/month, ew).

After paying bills, we budget $500 for groceries, a date night once a week, and $100 to send at random to bills in addition to payments we have set up.

I think I covered everything but if I forgot, I'll followup in the comments. So if you were me, where you would start hitting the hardest at? Thanks in advance, this is a lot to take in!! 

[Anonymous]

First and foremost; I am so sorry to hear of your struggles. I know how frustrating and exhausting it is to feel like you have to start over repeatedly, and never get the chance to just settle down and breathe. Condolences on your loss as well. I hope that once things start to get more on the upside of the rollercoaster of life you get to feeling better as well. You are on the track and you will get where you want to be. 

@Anonymous wrote:

So here's the skinny- My husband and I have gone through 6 layoffs over the last 8 years. That's not even an exageration. I've been in and out of the hospital due to a chronic illness that I have as well so a lot of our items in collections are medical debt.

We have 5 revolving credit lines that are current on payment but have a ridiculously high credit utilization (mainly due to my parents dying this year, we ended up using credit during funeral planning and what not on the other side of the country, this all happened 3 weeks after we had another layoff.)

Currently, we have about $1500 in savings and are also contributing to that each week, around $100 minimum. Our goal is to buy our first house 1.5-2 years from now and we are aiming for $20k as a downpayment.

Revolving credit is as follows:

Name of Debt       How much owed?          Limit                 Monthly Payment Amount

Capital One                   $742                          $750                $50 17th of each month

Premier One                  $411.25                    $400                 $30 on the 17th of each month

Gettington                      $472                          $500                 $20 - 22nd of each month

Fingerhut-me                 $377                         $400                  $30 - 5th of each month

Fingerhut-husband       $166                         $350                 $15 -  5th of each month

How much money do you have to take care of these? This should be your first priority. As you can see, it's really easy for interest to put them over the limit. Ultimately you should get all but Cap1 at 0 and literally cut up the cards. You should let a small balance report on Cap1 every month, like $10, and only put on the card what you currently have available to pay it off.  

We have about 10 accounts in collections, most average around $200, some lower, a couple are $1000, one is $700. About 5 of these are all owned by the same collection company.

Offer pay for deletes on the ones you can pay first. Repeat that until they are all paid or rejected. On the ones that would not PFD, if they are medical, google "WhyChat HIPAA" and start her process. Anything else, offer a settlement and try to get them to NOT report as settled for less than owed.

We also have 3 judgements listed on our accounts. One is listed as paid as it was done by mistake. I've tried disputing it and nobody will remove it, still a bit ticked off about it. The other 2- one is $4,000 and one is $1,200. We've been making small payments on both but are planning to ramp it up now that we have more money coming in again.  

You need to file a motion to vacate the mistaken judgement. If it is voided from the court's perspective, you need to dispute it with LexisNexis, which is where the bureaus are getting the information.

Starting in August, we will have an additional $900 freed up because of things being paid off. My husband's student loans come out of forebearance next month and I'm curious if it would be more beneficial to put it back in forebearance while we knock more debt out, or start paying (it's around $1,000/month, ew).

Yes, and you need to do that 3-4 weeks before the due date as it could take that long to process the request.

After paying bills, we budget $500 for groceries, a date night once a week, and $100 to send at random to bills in addition to payments we have set up.

I think I covered everything but if I forgot, I'll followup in the comments. So if you were me, where you would start hitting the hardest at? Thanks in advance, this is a lot to take in!! 

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[Anonymous]

Wow, thank you for the awesome advice!! I forwarded it to my husband and we're looking forward to kicking debt's butt

[Anonymous]

You've already gotten sound advice so I'll just add my experience to what was already said. In regards to your money, Don't try to do to many things at the same time. I did that and ended up with small pauments going everywhere with no progress.

Don,t do like I did. Prioritize active revolving debt first, and don't send anything to Collections until active debt is taken care of to a utilization below 30%. Unless, youre already in a payment plan then just treat that as an active account, and move it to that list. Priority #1 should be to pay down the cards that are over the limit. After that, overpay one account a month using either the smallest balance approach or a highest interest approach. Either way works. While you are sending your money to active accounts, take the time to send letters to the CAs. There are plenty of templates on this forum. Take a shot at DVs first. Then, if/when those fail, work on a letter explaining your situation and that you dont have the money to pay them right now. This usually causes them to ignore you for the small balances until you're ready to deal with them.

Good Luck, it's a rough ride but this forum is amazing in keeping one motivated.