topic Re: Debt consolidation guidance in Personal Finance

Debt consolidation guidance

Hopeful1 — Wed, 28 Feb 2024 13:47:44 GMT

Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you

Re: Debt consolidation guidance

pizzadude — Wed, 28 Feb 2024 14:55:53 GMT

@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you

It may be difficult for you to get approved for a loan right now if you do not have steady income coming in. Or you may not be approved for the entire $15K

It would help if you listed the balances and interest rates to determine where to start applying funds first.

Re: Debt consolidation guidance

SouthJamaica — Wed, 28 Feb 2024 16:23:28 GMT

@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you

I can't say that I have any experience in applying for credit while not employed, but I suspect you will need a cosigner. Your best bet I think is to wait until you have a job and can say that you have income.

Re: Debt consolidation guidance

ForwardLooking — Thu, 29 Feb 2024 06:56:56 GMT

@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you

First of all, I am sorry you are in this situation. How are you getting $150 a month in passive income? Is it from stocks or other assets you could sell to get rid of this debt quickly? Without a job or a commitment from a cosigner, I do not think you will be able to get a loan that will be in your managable range. Upstart charges origination fees that are tacked onto your loan, so expect them to add $1500 on top of the $15,000 you are looking for, and probably at a high APR too.

Re: Debt consolidation guidance

Hopeful1 — Sat, 02 Mar 2024 13:39:57 GMT

@pizzadude wrote:
@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you
It may be difficult for you to get approved for a loan right now if you do not have steady income coming in. Or you may not be approved for the entire $15K

It would help if you listed the balances and interest rates to determine where to start applying funds first.

Thanks for your response. Here is the requested information. I tried to edit my original post but I don't think this forum allows editing of posts.

Loans/Credit Cards	Balance	Annual % Rate	Next Payment Due	Minimum Payment
PenFed Platinum ($3.5k)	$3257.44	17.99%	04/01/2024	$66.00
Target RedCard ($700)	$483.91	28.15%	04/02/2024	$30.00
Discover Card ($2.5k)	$2333.14	21.24%	04/02/2024	$64.00
Credit One ($400)	$284.73	29.24%	04/03/2024	$30.00
Capital One Quicksilver ($500)	$379.13	30.74%	03/09/2024	$25.00
Amazon Prime Chase ($1.5k)	$1488.06	27.49%	03/12/2024	$48.00
Capital One Secured ($700)	$611.25	28.49%	03/14/2024	$25.00
Affirm Loan 1 ($1.8k)	$1140.77	15.99%	03/15/2024	$163.31
Wells Fargo ($1k)	$925.78	0%	03/18/2024	$25.00
Indigo Card ($300)	$173.22	29.90%	03/21/2024	$40.00
Credit One ($1k)	$867.36	29.65%	03/22/2024	$44.00
Affirm Loan 2 ($2.3k)	$1245.78	15.99%	03/28/2024	$208.68
Apple Card ($3k)	$2908.24	27.24%	03/28/2024	$99.00
Credit One ($500)	$0	29.24%		$0.00

Re: Debt consolidation guidance

Hopeful1 — Sat, 02 Mar 2024 14:09:02 GMT

@ForwardLooking wrote:
@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you
First of all, I am sorry you are in this situation. How are you getting $150 a month in passive income? Is it from stocks or other assets you could sell to get rid of this debt quickly? Without a job or a commitment from a cosigner, I do not think you will be able to get a loan that will be in your managable range. Upstart charges origination fees that are tacked onto your loan, so expect them to add $1500 on top of the $15,000 you are looking for, and probably at a high APR too.

Thank you for not condemning me right off the bat for exhibiting such irresponsible behavior. I've never been in debt like this before and I didn't realize just how hard it would be to keep up with the interest alone until it was actually happening. I thought I was depressed/anxious/overwhelmed before I had financial trouble... now I’m really in a bad place mentally.

I think I used the term "passive income" correctly but I may not be. The passive income is from past modeling jobs. When they make money from my photos I get a cut of the profit. They deposit a payment once a month. The company gives me a 1099 at the beginning of each year for tax purposes.

You said that without a cosigner I will not be able to get a loan that will be in my manageable range. What do you mean by manageable range?

That origination fee from upstart sounds bad. I really don't have anyone to co-sign unfortunately. Any other options you can think of?

I replied to someone else with all of my balances and aprs if you want to take a look above.

Thanks again, the help is very much appreciated.

Re: Debt consolidation guidance

Hopeful1 — Sat, 02 Mar 2024 14:39:19 GMT

@SouthJamaica wrote:
@Hopeful1 wrote:
Long story short I made some bad choices last summer and got myself into some serious debt that I have been unable to keep up with. I do not currently have a job but I do have about $150 / month in passive income. My partner has been sending me the difference to pay my bills each month and it has put a significant strain on our relationship. The interest alone is crazy high which is why I am looking into getting a debt consolidation loan or personal loan to lower the total monthly payment amount.

I have about $15k in debt spread across 12 credit cards and two affirm loans. My credit score took a hit going from 705 to 675 (Fico 8 from Discover card statement) and 690 to 575 (according to Experian VantageScore 3.0). I would like to get a loan and still keep the credit cards open if possible but if I must close some that would be okay.

I've received a few prequalified mailers for personal loans from Upstart. I’m not sure if that's worth looking into. If I could get my payments down to 150-200 a month that would be great but I could manage 300-500. If anyone has any guidance on this I would greatly appreciate it. Thank you
I can't say that I have any experience in applying for credit while not employed, but I suspect you will need a cosigner. Your best bet I think is to wait until you have a job and can say that you have income.

I’m not going to be employed in the near future. If I am it's going to be 1099 income. I haven't been employed with a w2 in over 15 years. The skills I had at that time no longer hold any value so getting a job in that field isn't going to happen.

I was in college when covid hit and that was the beginning of my troubles. I got covid and started having debilitating musculoskeletal pain and cognitive dysfunction that has not resolved. It was the strangest thing when I got covid... I had visible knots and spasms lining my upper back. It was one of the most painful experiences of my life and my back has never been the same. Not just that it has spread to other areas of my body.

Then 5 months later I got Covid a second time which caused severe GI issues that have not resolved either. All I've done since then is researched how I can how to fix myself from a holistic perspective, gone to one doctor appointment after another, had tons of imaging, blood testing, procedures, and physical therapy that ultimately hasn't done anything helpful enough to get me back on my feet (or more importantly back in college).

I'm desperately trying to avoid disability but the more time that goes by the more it looks like that is my only option. I was a very healthy individual before covid so it's not like there was much I could improve on in the first place when it came to healthy eating habits exercise etc.

My partner has been paying my bills each month but it's put a strain on our relationship. If I could just get some lower payments, I think that it would go a long way to fixing that. Co-signing is not an option though so I'll have to find another way.

Thanks for your help.

Re: Debt consolidation guidance

Anonymous — Tue, 05 Mar 2024 04:05:21 GMT

I'm sorry to hear about your struggles. I would suggest contacting your creditors and asking to be placed in their hardship programs. If eligible, they will close or restrict your cards, but they will also reduce or suspend interest while you pay them off.

An alternative would be a Debt Management Plan administered by a non-profit NFCC affiliated Credit Counseling Organization. This is not to be confused with debt settlement or debt relief programs. A DMP works similar to hardship programs, except the Credit Counseling Organization contacts your creditors. You pay the plan one payment per month and they disburse the payments to your creditors. The fee is normally ~$50 per month. The plan will not tell you to miss payments (like debt settlement/relief programs will. You can find a DMP through nfcc.org.

Good luck to you!

Re: Debt consolidation guidance

FlaDude — Wed, 06 Mar 2024 22:00:35 GMT

@Hopeful1 wrote:
Thank you for not condemning me right off the bat for exhibiting such irresponsible behavior.

A lot of us are here because we've had our own credit problems in the past (or still do).

Re: Debt consolidation guidance

ForwardLooking — Fri, 08 Mar 2024 00:39:23 GMT

@Hopeful1 wrote:
Thank you for not condemning me right off the bat for exhibiting such irresponsible behavior. I've never been in debt like this before and I didn't realize just how hard it would be to keep up with the interest alone until it was actually happening. I thought I was depressed/anxious/overwhelmed before I had financial trouble... now I’m really in a bad place mentally.
No one here should condemn or make you feel uncomfortable. Most of us are here because we had some sort of financial issues in the past ourselves. Believe me, I understand how financial trouble can make you feel and affect your mental health. Be sure to find someone you can talk to and trust to help keep your mental health intact.

I think I used the term "passive income" correctly but I may not be. The passive income is from past modeling jobs. When they make money from my photos I get a cut of the profit. They deposit a payment once a month. The company gives me a 1099 at the beginning of each year for tax purposes.
I don't think it was used incorrectly. I was thinking you perhaps had some stock or other investments that you could sell and help reduce some of the debt, but it does not sound like that. But it is awesome you were able to get long term royalities for your modeling jobs.

You said that without a cosigner I will not be able to get a loan that will be in my manageable range. What do you mean by manageable range?
You mentioned 300-500 was managable. I don't think you will be able to get a loan that can consolidate all you debts and be within that monthly payment range because interest rates are high right now and you do not have income to support those types of payments. A co-signer would essentially let you borrow their credit and income statements to potentially get better terms. However, I would advise against that because if for somereason things go bad later and they get stuck paying the loan, you will more than likely have a rough relationship with whomever the co-signer is.

That origination fee from upstart sounds bad. I really don't have anyone to co-sign unfortunately. Any other options you can think of?
No, but if it is getting unbearable and hard to manage both financially and mentally, you may want to talk to a bankruptcy attorney about options. Most will give you a free consultation, and it could be a good option to put the financial obligations behind you so you can start focusing on the future and your own health.

I replied to someone else with all of my balances and aprs if you want to take a look above.

Thanks again, the help is very much appreciated.
Your welcome and I hope you can come up with a plan to get out of this.

Re: Debt consolidation guidance

Citylights18 — Fri, 08 Mar 2024 03:32:07 GMT

What if your partner had access to a line of credit where the payments become smaller over time?

Take out something like a HELOC for you and you make the payments?

Re: Debt consolidation guidance

Anonymous — Fri, 08 Mar 2024 13:52:25 GMT

@Citylights18 wrote:
What if your partner had access to a line of credit where the payments become smaller over time?

Take out something like a HELOC for you and you make the payments?

Wouldn't that mean OP would be using their home as collateral? If OP defaults on unsecured debt, like credit cards, they can be sued, but the bank can't immediately move to take their home. But, if OP defaults on a HELOC, their house is at risk. I'm not a fan of moving unsecured debt over to secured debt for his reason.

Re: Debt consolidation guidance

FicoMike0 — Mon, 11 Mar 2024 03:48:09 GMT

It sounds to me like getting another loan is kicking the can, you really need income to ever pay this debt. Bankruptcy is a drastic step, but you look like a candidate to me. They might charge off the $15000 completely. Your $150/ month sounds like less than a sure thing. I'm sure a lawyer could describe it as nonexistent.

Re: Debt consolidation guidance

Creditwiser — Mon, 11 Mar 2024 04:21:36 GMT

Unless you have a steady income it will be almost impossible to obtain a loan in any amount sufficient to consolidate. It looks like 10k would get you where you could breathe but then you'll have the 10k loan to deal with and still have a pocket full of credit cards. Thats dangerous without steady income or emergency savings to fall back on.

What can you sell and live without? Can you borrow from family/partner ? If not then you need to consider bankruptcy as others have mentioned.Talk to an attorney and you just might walk away feeling better.

Its likely that your credit is going to tank if you cannot obtain a loan or come up with the money elsewhere each month to get a head of this. If you slip then your credit will too. Only now you'll still owe these Creditiors. Bankruptcy will trash your credit as well. Difference there is you have a clean slate to move on with life. I filled 10 years ago and it seemed like the end of the world to me. It was far from it. I soon learned how to move on with it and I recovered.

Sit down and look at your options for this situation. Having no income is a big hurdle for you in this case. I wish you the best of luck and hoping you'll soon find peace of mind.

Re: Debt consolidation guidance

RedKhaos — Sun, 31 Mar 2024 19:53:16 GMT

A lot of the CC lenders offer "financial hardship" programs that'll lower/defer interest payment, but specific details aren't public. Plus, you have a lot of creditors you might need to call, which can be very taxing.

If you are feeling overwhelmed, I'd suggest reaching out to a (non profit) professional to at least know where you stand. National Foundation for Credit Counseling at https://www.nfcc.org/ is a decent start. You can fill out a form and I'm pretty sure their first session is free and they can educate you and give you concrete steps/options you can take. Just don't sign up for a "plan" that you have to pay for without careful consideration.

That's also my general suggestion. Even though you're anxious to "solve" your issue asap, you should take the time to learn as much as possible and carefully consider all your options. A rash decision could make your situation worse, especially since there's a lot of for profit companies that will be happy to take more of your money to "help" you.