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Crippled by debt

Established Contributor

Crippled by debt

Over the past 2 years my debt has see-sawed far worse than I could ever imagine. At the peak of my credit my debt was $0 and my score at 742. Right now my debt has ballooned into $31,000 and my score has fallen to 635.

Within the 2 years I lost quite a bit of money in the market and had to get a full time job. Unfortunately the full time job I have right now is barely paying me $30,000 a year. Luckily I've been living with my mother so saving some money but right now I can no longer live with her... So, here's my situation. I only make about $1800 a month, now that I have to move out and live in NYC the minimum rent I'd be paying is about $800 a month... My minimum payments on my cards are $1200 a month....

Is there any viable option that I have? Has anyone ever been in this sort of situation? I REALLY don't want to damage my credit.... Any advice on what I should do? I do have some money saved up that I was trying to put towards a security deposit and first months rent (it's about $5000, should I use that on my credit cards instead?)

Starting Score: 575 (As Of Early 2011)
Current Score: TU: 767 EQ: 732 EX; 742 (As Of Feb 2012)
Goal Score: 750


Take the FICO Fitness Challenge

Long way to go ^_^
7 REPLIES
Valued Contributor

Re: Crippled by debt

There are two ends to look at, understanding that money you have = money coming in and money going out. Let's tackle the first end, money coming in, can you take on a part time job to bring more money in, get a higher paying job. Let's look at the expense end, can you consolidate your debt and/or open new cards at lower interest rates to give you some relief, such as 0% for 18 months etc. My chase freedom gives me 0% until aug 2015, for example. Citi diamond preferred also did the same for me, about 1 year of 0%.

Credit Cards: AmEx Platinum (NPSL), Citi Prestige ($32K), Simmons ($5.5K), IberiaBank ($14K)
Personal Lines of Credit: U.S. Bank ($5K), Wells Fargo ($11.2K), Citibank ($11.8K), PenFed CU ($25K), LA Financial CU ($20K)
myFICO 3B Report (as of 4/30/16): Experian: Score 8: 786; Mortgage Score 2: 809 Equifax: Score 8: 801; Mortgage Score 5: 809 Transunion: Score 8: 796; Mortgage Score 4: 796
Jumbo Mortgage: 3.75%
Established Contributor

Re: Crippled by debt

As of right now I'm not getting approved for any cards, I've never thought of getting a 2nd job and that's an option.

Starting Score: 575 (As Of Early 2011)
Current Score: TU: 767 EQ: 732 EX; 742 (As Of Feb 2012)
Goal Score: 750


Take the FICO Fitness Challenge

Long way to go ^_^
Frequent Contributor

Re: Crippled by debt

Split an apartment with some roommates?

Amex Delta Platinum 6k | Barclaycard Commerce 15k | US Bank Cash+ 18.5k | Barclaycard Arrival+ 20k | Citi Aadvantage Platinum 22k | Capital One Venture 32k | Lowes 35k | Citi Hilton HHonors Reserve 36k | Discover It 37.8k | Bank of America BBR 45k | Amex EDP 50k | Chase Marriott 67k | Amex Platinum NPSL
Frequent Contributor

Re: Crippled by debt

Stay with your mom for 1 year, get a second job with low stress, dont eat out alot and dont spend too much. Put most of your earnings into paying off debt.

 

Pay highest interest cards first.  If you can please consolidate all credit card payments or atleast the ones with very high apr.

 

Sell items, ipads, any expensive item worth over $250 that you can live without.  I sold my ipad and iphone for $800 and paid off a card a while back.

Senior Contributor

Re: Crippled by debt

If you have anything of value to sell, avoid eBay.  It's a scammers paradise.  Try Craigslist or word of mouth. 

 

Try to find someone to split rent with.

 

Take on a p/t job.

 

Enter into a debt management program.  Keep one card out for emergencies.

 

On $1800, there is no way you can pay rent, the minimum payments and living expenses.  Something must be cut. 

 

Have you called any of the creditors and asked them to help you out?  Lower interest rates perhaps?

 

Whatever you decide, I hope it works! 

Valued Contributor

Re: Crippled by debt

Is there a specific reason why you can't live with your mom a little while longer? That would really help it seems.

 

You are not entirely out of options. Like others said, picking up extra hours at a second job may be an option. Another may be to renegotiate your debt with your creditors. But if none of it pans out, you could consider bankruptcy - but if you do, forget being able to get an apartment on your own for a long time.

Moderator

Re: Crippled by debt


yfan wrote:

Is there a specific reason why you can't live with your mom a little while longer? That would really help it seems.

 

You are not entirely out of options. Like others said, picking up extra hours at a second job may be an option. Another may be to renegotiate your debt with your creditors. But if none of it pans out, you could consider bankruptcy - but if you do, forget being able to get an apartment on your own for a long time.


Can you no longer pre-pay rent?  I remember I did first / last, plus 3 months and had no issue before when I didn't have a credit history but that was a while ago.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 771, TU 4 758, EX 2 758, EQ 8 795, TU 8 762, EX 8 786 (7/28/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


Take the myFICO Fitness Challenge