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

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

Sk323i — Mon, 24 Apr 2017 05:53:09 GMT

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%?

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

happypill — Mon, 24 Apr 2017 06:14:13 GMT

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.

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

Dalmus — Mon, 24 Apr 2017 06:17:26 GMT

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!

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

Anonymous — Mon, 24 Apr 2017 06:42:34 GMT

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!!!

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

Anonymous — Mon, 24 Apr 2017 06:46:18 GMT

***********EDIT - I should also mention that I actually wrote what Gemini101 wrote but erased it. I was afraid to come off too harsh and make you feel more doomed. In reality though Gemini101 is 100% correct. You need to get your spending habits in check. Unless there is a medical reason why you have to spend as much as you do, some things need to change in your life.

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!

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

Anonymous — Mon, 24 Apr 2017 07:10:54 GMT

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.

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

Anonymous — Mon, 24 Apr 2017 07:16:58 GMT

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)

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

Creditplz — Mon, 24 Apr 2017 07:19:03 GMT

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!

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

Anonymous — Mon, 24 Apr 2017 07:49:17 GMT

@ 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...😀

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

Creditplz — Mon, 24 Apr 2017 08:12:25 GMT

"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.

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

Anonymous — Mon, 24 Apr 2017 11:22:53 GMT

I'd ditch the car and buy a used one. With the right shopping you can have just as nice of a car as you have now at 1/3 to half the cost. Shop online, nationwide, fly in, drive out. Or have it delivered.

Also check out NavyFed. Out of anyone worthwhile, they are most likely to possibly approve you for a decent enough limit to consolidate. Maybe. If you're literally at 100% then I don't know.

Also, break this down for us "I spend $1600 on monthly reoccuring bills & needs"

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

CreditInspired — Mon, 24 Apr 2017 13:07:25 GMT

@happypill wrote:
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.

No words have been better articulated. If you don't have a detailed idea of where your money is going or how much your net really is, there is no way to get ahead.

True story. Years ago I owed IRS a ton of money ($15K) so I did an installment payment plan over the phone. I swore to the IRS agent that the max I could pay a month was $50-60. To my utter shock and dismay, after we went over my total debts, I was told I could pay $252/month. I thought the Agent had lost her mind. We went back and forth over this with me about to cry -- there was absolutely no way I could afford to pay that. I believed I would be destitute. Well, you know what? I actually could pay that and I would not be homeless. I just had to take drastic actions on my needs versus my wants. +1 Gemini that you may not need additional income.

So, I left AT&T and went to Cricket. I cancelled my high-butt cable bill and did Air TV (antenna on the window), which I still use to this day. I took my lunch to work and absolutely unequivocally stopped eating out (I didn't even go to McDonalds). I stopped going to Starbucks and made my own coffee at home. I stopped purchasing soda and bottled water (yep, from the faucet). I got rid of my landline. I started carpooling. The list goes on and on. It is amazing the amount of money one can save just by stopping the spending on unnecessary things. My apologies for going off track.

But OP, really do a budget immediately as happypill states, in order to eliminate unnecessary things, and stick to it. And oh yeah, as Dalmus suggests, stop using those CCs.

You made the first step -- asking for advice, so you're really on your way to hopefully squashing that burdening debt. Good luck.

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

Anonymous — Mon, 24 Apr 2017 13:13:02 GMT

It's really hard to give a specific plan of attack without all the details. Some important things being:

-What are the cards, their individual balances, their credit limit, and APR?

-What are your FICO scores? How many new accounts have you opened in the past 2 years?

-What is the $1600 a month in expenses spent on?

-Is it possible to reduce the $1400 a month on mortgage and car payments? This seems a bit high. At first glance, no offense, it seems like maybe you bought a house/car that you could not realistically afford while also spenign $1600+ on other expenses?

Overall, based on the limited information we have, I'd say you just need to spend less and reduce your debt. Reconsider everything you are spending outside of the basics. Unless you have some hefty medical expenses, you can heavily reduce that $1600 a month you spend. I'm assuming this is spent on food, bills/subscriptions (telephone, internet, TV, netflix, hulu, etc.), and entertainment (movies, video games, going out somewhere, etc.). The biggest source of high expenses, at least that I've found in my own life, is eating out too much. I am guilty of this. I like to eat out for most of my meals, and this costs a LOT more than cooking at home. Sometimes when you're trying to pay down debt you just need to bite the bullet and eat cheap food at home for awhile (pasta, sandwhiches, chicken, rice, eggs, etc). After that, consider limiting your spending on entertainment. Going out to the movies is really expensive, maybe rather than catching a movie out at the threater once a month, you get a $1 redbox movie?

Again, these are all recommendations based on assumptions because you were not very detailed about your spending habits. But, the advice is almost always the same: spend less money. Nearly everyone can find somewhere to cut costs.

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

Anonymous — Mon, 24 Apr 2017 13:46:30 GMT

Thanks for the assist and sharing your story @creditInspired

Yes, we don't have the OPs FULL picture, we are just going by logic and the information shared

And the bottom line is when a person 'guesses' at their own income has over 12k in revolving debt
It may be SAFE to assume a few things

When 'they' are the one defining 'need' and 'barely' getting by and determining that there is NO WASTED spending...No offense but the circumstances may be to differ

Just as @CreditInspired helped illustrate if you ASK the spender they can't see the forest for the trees
At the point of TEARS as he/she shared ppl will almost be ready to FIGHT swearing before God!!!

That they just need MORE 💰 another JOB, more Hours just more, more, more the answer is ALWAYS 'more' until you reprogram or LIFE reprograms itself FOR you

We have to assume the gf is part of the household because he brought her up as such, we didn't go 'find' her existence or her income he put it in as in 'they' are one household....thats today's Modern Family

I still say 12k on those two incomes is dire, especially seeing what the housing expense is, THAT is the killer!

You see in high housing cost areas it's tougher to make a come back but when your HOUSING is that reasonable with respect to those two incomes, it's about WILL

Now in San Francisco where 60% of Net may be 'need' for a place sleep then we have a more direct scenario but dude says 4k includes what they 'think' are essentials but housing was only at $1600 with near 6K coming in pleeeease

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

Anonymous — Mon, 24 Apr 2017 13:50:05 GMT

So let me jump in here with my two cents but they kind of helped me.. if youve seen yourself "drowning in debt" it may be a spiraling issue of not just debt but your surroundings. What i mean is that you probably have alot of things at home. i know i did, so i made it a plan to get rid of the clutter. went through all my old books that i knew i would never read again( or read in the first place) i went through my entire movie collection ( which was my pride and joy) i went through my cds ( also pride and joy), i looked at all those items to start with and realized that i have no need or use for them anymore so i found a place to buy them all, it took some work to find places to buy them all but i ended up getting rid of 4 boxes of books, 4 totes worth of dvds and 4 totes worth of cds, after selling them all, came out with about 1500.00 that i used to pay down my highest apr credit card which right there saved me interested and also save me $140 a month on card payments( since it was closed out). then i did the same thing with a bunch of old tools that i no longer needed bam 400 bucks, another credit card payed down, went back just gave away a bunch of decorations and clothes to salvation army... now i save myself about $240 a month just on credit card payments, no longer paying $75 for a storage unit, and now i also have alot less clutter in the garage a lot less stress and feel great about not having so much things.

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

MrsCHX — Mon, 24 Apr 2017 14:20:54 GMT

I read all the replies and can only echo others. OP I think it would be really helpful for you to come back and list out monthly expenses plus a list of credit card issuer, balance, credit limit, APR.

If it's just the 2 of you (e.g., no kids) and you're spending $1,600 a month on things outside of housing and transportation...something is eating up a lot of money.

People here can be of great help with figuring out a plan!

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

Dalmus — Mon, 24 Apr 2017 14:58:01 GMT

@Anonymous wrote:
So let me jump in here with my two cents but they kind of helped me.. if youve seen yourself "drowning in debt" it may be a spiraling issue of not just debt but your surroundings. What i mean is that you probably have alot of things at home. i know i did, so i made it a plan to get rid of the clutter. went through all my old books that i knew i would never read again( or read in the first place) i went through my entire movie collection ( which was my pride and joy) i went through my cds ( also pride and joy), i looked at all those items to start with and realized that i have no need or use for them anymore so i found a place to buy them all, it took some work to find places to buy them all but i ended up getting rid of 4 boxes of books, 4 totes worth of dvds and 4 totes worth of cds, after selling them all, came out with about 1500.00 that i used to pay down my highest apr credit card which right there saved me interested and also save me $140 a month on card payments( since it was closed out). then i did the same thing with a bunch of old tools that i no longer needed bam 400 bucks, another credit card payed down, went back just gave away a bunch of decorations and clothes to salvation army... now i save myself about $240 a month just on credit card payments, no longer paying $75 for a storage unit, and now i also have alot less clutter in the garage a lot less stress and feel great about not having so much things.

This a GREAT advice, and, frankly, something that people just don't normally think about. The amount of "stuff" people have these days is amazing... Even more amazing, and I'm guilty of it, too, is the amount of "stuff" people have that is tucked away in moving boxes in the basement/attic that hasn't been looked at or touched for 10 years.

Its also amazing how much you can raise if you go through a little effort to research places that buy "stuff." Whatever is left over, hold a garage sale... partner up with some other family/friends to get a nice big sale. Sometimes the things you truely consider worthless go for surprising amounts of money at a yard sale. Price higher and work down... don't assume that dinnerware set with 2 missing plates and a chipped bowl is worthless... I sold mine to a couple just starting out for $10.

This has the added benefit of preventing your children/friends bitching at how much crap you have when it comes time to move into a retirement home.

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

Anonymous — Mon, 24 Apr 2017 15:02:47 GMT

I'm going to warn against getting a different car initially. if you have run your credit up to a point where you cant get another small loan and are upside down on existing, you have to stick it out. It is no good to ditch a $400 car payment for a $275 car payment if you can't get approved anyway. Start trimming the fat on food and luxuries with the bills exactly the same in the meantime. About 10 people are here to help you from this thread alone. You can probably answer half your own questions by having it on paper in front of you.

I've been there many times. Even putting everything on paper doesnt show true story because most bills hit at different times of the month. Because both of you are working I'm going to assume you have at least three paychecks a month even if you're paid once. maybe you should break it all up in to thirds to see how payments can be timed better. For example the statement date on a lot of creditors is a few days after the due date. if you get paid again between those dates you can push/pull another payment and it will drop your balance a significant amount even with a smallish payment. That would be snowball on steroids and I think that is the approach you're going to have to do.

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

Anonymous — Mon, 24 Apr 2017 15:15:30 GMT

nvm

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

Anonymous — Mon, 24 Apr 2017 15:15:04 GMT

Different parts of the country treat cars differently. I drive 40000 miles a year so I cannot lease. In California if you can do a lease with low miles you are super fortunate to live close to work