topic Re: Debt Consolidation- Please Help!! in General Credit Topics

Debt Consolidation- Please Help!!

Debtdebt — Thu, 22 Dec 2022 11:03:42 GMT

Hi,

Im freaking out and living paycheck to paycheck due to massive credit card debt that I have accumulated over the last few years. Credit Card Debt is about $83k overall and 57% credit card usage... I use to have BT promos that have since expired at some point this year, driving my monthly bills way up. I have $8k in my savings for emergencies. I need immediate advice on how to tackle this and consolidate my debt. Due to the debt, first thing I will do is sell my car to get rid of the $855/month car loan and just use my beater car thats paid off and runs well. Sitting at 712 Fico Score. What are my options as I'm currently stressing everyday and losing sleep thinking about the debt and don't know what to do!? Do you think a local Credit Union would help me out with consolidating this debt into some sort of fixed loan? I also have about $100k equity in my house, but I heard banks aren't doing HELOCs at the moment and my DTI is too high. Thank you in advance to everyone who takes a minute to look at my situation. I will gladly update with other info needed.

-Monthly take home pay is $4800 (guaranteed), but usually bring home $5200 after Overtime.

-Mortgage $1830/month

-Chase Sapphire $407/month ($13.8k/$14k) 24.24%

-Citi Diamond $593/month ($26k/$28.5k) 20.24%

-BOA $628/month ($19k/$30k) 28.74%

-Amex Blue $310/month ($10k/$10.5k) 25.74%

-Chase freedom unlimited $155/month ($14k/$15k) 21.24%

- CU loan $450/month

- Car loan $855/month

*TOTAL monthly debt is currently $5288

Thank you for taking the time to look at my post and offering any advice. Happy Holidays.

Re: Debt Consolidation- Please Help!!

SouthJamaica — Fri, 23 Dec 2022 15:07:25 GMT

@Debtdebt wrote:
Hi,
Im freaking out and living paycheck to paycheck due to massive credit card debt that I have accumulated over the last few years. Credit Card Debt is about $83k overall and 57% credit card usage... I use to have BT promos that have since expired at some point this year, driving my monthly bills way up. I have $8k in my savings for emergencies. I need immediate advice on how to tackle this and consolidate my debt. Due to the debt, first thing I will do is sell my car to get rid of the $855/month car loan and just use my beater car thats paid off and runs well. Sitting at 712 Fico Score. What are my options as I'm currently stressing everyday and losing sleep thinking about the debt and don't know what to do!? Do you think a local Credit Union would help me out with consolidating this debt into some sort of fixed loan? I also have about $100k equity in my house, but I heard banks aren't doing HELOCs at the moment and my DTI is too high. Thank you in advance to everyone who takes a minute to look at my situation. I will gladly update with other info needed.

-Monthly take home pay is $4800 (guaranteed), but usually bring home $5200 after Overtime.

-Mortgage $1830/month
-Chase Sapphire $407/month ($13.8k/$14k) 24.24%
-Citi Diamond $593/month ($26k/$28.5k) 20.24%
-BOA $628/month ($19k/$30k) 28.74%
-Amex Blue $310/month ($10k/$10.5k) 25.74%
-Chase freedom unlimited $155/month ($14k/$15k) 21.24%
- CU loan $450/month
- Car loan $855/month
*TOTAL monthly debt is currently $5288

Thank you for taking the time to look at my post and offering any advice. Happy Holidays.

1. You've already identified one thing you need to get rid of, the $855 month car loan.

2. You've also identified what I think would be another good move -- a credit union debt consolidation loan. You're not going to get a big enough loan to tackle all the credit cards, so what I would do is get a loan to tackle the BOA card. Pay that card to zero, and don't use it again for awhile except for tiny numbers which you can pay off before the statement even cuts.

3. Then I would start reducing balances to 88%, then reducing balances to 78%, to get out of the "maxed out" zone.

4. Once I got them all to 48% or less, I would start snowballing. (Paying smallest balance to zero, then next smallest, etc.)

5. As you've probably figured out, it would be good if you could supplement your income and apply the additional income to the credit card payments. So more overtime and/or a side gig would be nice if possible.

Re: Debt Consolidation- Please Help!!

SlideOrInsert — Fri, 23 Dec 2022 06:00:58 GMT

I would not replace unsecured debt with heloc debt secured by my home.

of the $2093 in payments to the credit cards, only $458 is being applied to the principal balances. you are hemorrhaging interest. also, the math does not check out for the $155 monthly payment for Chase Freedom; the payment is less than the interest accruing and minimums are usually at least 2% of the balance, which is $280.

	limit	balance	apr	min	int	util
BOA	30000	19000	28.74	-628	455	63
Amex Blue	10500	10000	25.74	-310	215	95
Chase Sapphire	14000	13800	24.24	-407	279	99
Chase Freedom	15000	14000	21.24	-155	248	93
Citi Diamond	28500	26000	20.24	-593	439	91
TOTAL	98000	82800	23.69	-2093	1635	84
CU Loan				-450
Mortgage				-1830
EXPENSES				-4373
INCOME				4800
diff				427

it looks like at least a year before all your revolving accounts are below the maxed out 88.9% threshold:

	limit	balance	apr	min	nper	new bal	new util
BOA	30000	19000	28.74	-628	11	16853	56
Amex Blue	10500	10000	25.74	-310	11	8829	84
Chase Sapphire	14000	13800	24.24	-407	11	12180	87
Chase Freedom	15000	14000	21.24	-155	11	15116	101
Citi Diamond	28500	26000	20.24	-593	11	24150	85
TOTAL	98000	82800	23.69	-2093		77128	79

at that time, I would seek out a personal loan of 25-30K to consolidate BOA and Amex Blue. a personal loan from discover, marcus, etc will give you an estimated amount and rate without a hard inquiry. I am not sure you would qualify for one now, but you can try.

in any case, because the interest on your accounts is so expensive and your budget is so tight, I would emphasize that the avalanche method is probably the best way to pay things going forward. the snowball will drag it out even more ridiculously expensive and slow than it already is.

if I was $83000 in debt with stifling interest, I would try a free consultation with at least two bankruptcy attorneys just to get some insight what it might look like.

Re: Debt Consolidation- Please Help!!

NoMoreE46 — Thu, 22 Dec 2022 18:20:05 GMT

I am glad that you're here trying to get some advice.

Feel free to see what many others have gone through and post more questions in the Bouncing Back from Credit Problems area.

Personally, l think you should have a session with a BK attorney.

Re: Debt Consolidation- Please Help!!

Debtdebt — Thu, 22 Dec 2022 19:34:56 GMT

@SouthJamaica wrote:
@Debtdebt wrote:
Hi,
Im freaking out and living paycheck to paycheck due to massive credit card debt that I have accumulated over the last few years. Credit Card Debt is about $83k overall and 57% credit card usage... I use to have BT promos that have since expired at some point this year, driving my monthly bills way up. I have $8k in my savings for emergencies. I need immediate advice on how to tackle this and consolidate my debt. Due to the debt, first thing I will do is sell my car to get rid of the $855/month car loan and just use my beater car thats paid off and runs well. Sitting at 712 Fico Score. What are my options as I'm currently stressing everyday and losing sleep thinking about the debt and don't know what to do!? Do you think a local Credit Union would help me out with consolidating this debt into some sort of fixed loan? I also have about $100k equity in my house, but I heard banks aren't doing HELOCs at the moment and my DTI is too high. Thank you in advance to everyone who takes a minute to look at my situation. I will gladly update with other info needed.

-Monthly take home pay is $4800 (guaranteed), but usually bring home $5200 after Overtime.

-Mortgage $1830/month
-Chase Sapphire $407/month ($13.8k/$14k) 24.24%
-Citi Diamond $593/month ($26k/$28.5k) 20.24%
-BOA $628/month ($19k/$30k) 28.74%
-Amex Blue $310/month ($10k/$10.5k) 25.74%
-Chase freedom unlimited $155/month ($14k/$15k) 21.24%
- CU loan $450/month
- Car loan $855/month
*TOTAL monthly debt is currently $5288

Thank you for taking the time to look at my post and offering any advice. Happy Holidays.

1. You've already identified one thing you need to get rid of, the $855 month car loan.
2. You've also identified what I think would be another good move -- a credit union debt consolidation loan. You're not going to get a big enough loan to tackle all the credit cards, so what I would do is get a loan to tackle the BOA card. Pay it to zero, and don't use it again for awhile except for tiny numbers which you can pay off before the statement cuts.
3. Then I would start reducing balances to 88%, then reducing balances to 78%, to get out of the "maxed out" zone.
4. Once I got them all to 48% or less, I would start snowballing. (Paying smallest balance to zero, then next smallest, etc.)
5. As you've probably figured out, it would be good if you could supplement your income and apply the additional income to the credit card payments. So more overtime and/or a side gig would be nice if possible.

Thank you for the advice provided!

Re: Debt Consolidation- Please Help!!

Debtdebt — Fri, 23 Dec 2022 06:02:37 GMT

@SlideOrInsert wrote:
I would not replace unsecured debt with heloc debt secured by my home.

of the $2093 in payments to the credit cards, only $458 is being applied to the principal balances. you are hemorrhaging interest. also, the math does not check out for the $155 monthly payment for Chase Freedom; the payment is less than the interest accruing and minimums are usually at least 2% of the balance, which is $280.
limit balance apr min int util
BOA 30000 19000 28.74 -628 455 63
Amex Blue 10500 10000 25.74 -310 215 95
Chase Sapphire 14000 13800 24.24 -407 279 99
Chase Freedom 15000 14000 21.24 -155 248 93
Citi Diamond 28500 26000 20.24 -593 439 91
TOTAL 98000 82800 23.69 -2093 1635 84
CU Loan -450
Mortgage -1830
EXPENSES -4373
INCOME 4800
diff 427

it looks like at least a year before all your revolving accounts are below the maxed out 88.9% threshold:
limit balance apr min nper new bal new util
BOA 30000 19000 28.74 -628 11 16853 56
Amex Blue 10500 10000 25.74 -310 11 8829 84
Chase Sapphire 14000 13800 24.24 -407 11 12180 87
Chase Freedom 15000 14000 21.24 -155 11 15116 101
Citi Diamond 28500 26000 20.24 -593 11 24150 85
TOTAL 98000 82800 23.69 -2093 77128 79

at that time, I would seek out a personal loan of 25-30K to consolidate BOA and Amex Blue. a personal loan from discover, marcus, etc will give you an estimated amount and rate without a hard inquiry. I am not sure you would qualify for one now, but you can try.

in any case, because the interest on your accounts is so expensive and your budget is so tight, I would emphasize that the avalanche method is probably the best way to pay things going forward. the snowball will drag it out even more ridiculously expensive and slow than it already is.

if I was $83000 in debt with stifling interest, I would try a free consultation with at least two bankruptcy attorneys just to get some insight what it might look like.

Thank you for making a chart so it's easier to see.

The chase freedom card just ended the promo. The $155 is the old/current monthly payment and next months the payment will be at the new rate I listed.

I have been doing the avalanche method lately with the discretionary income I have. I was previously doing the snowball method but didn't feel like it was making much of a dent in the debt.

I am scared of bankruptcy and the effect it would have on my family and home. Never been through one and don't know anyone that went through one either. I'm just glad I have a stable job with benefits.

Re: Debt Consolidation- Please Help!!

Debtdebt — Thu, 22 Dec 2022 19:36:04 GMT

@NoMoreE46 wrote:
I am glad that you're here trying to get some advice.
Feel free to see what many others have gone through and post more questions in the Bouncing Back from Credit Problems area.

Personally, l think you should have a session with a BK attorney.

Thank you I will look into the bouncing back from credit problems area. I haven't checked it out yet. I'll be doing some reading today

Re: Debt Consolidation- Please Help!!

SlideOrInsert — Sat, 24 Dec 2022 00:46:58 GMT

@Debtdebt wrote:
I am scared of bankruptcy and the effect it would have on my family and home. Never been through one and don't know anyone that went through one either. I'm just glad I have a stable job with benefits.

bk is definitely not to be taken lightly. but it is good to know all your options. in any case, I am not advocating for/against bk, I am advocating that you are informed about all your options.

just for exercise, consider the following table:

balance	apr	pmt	nper	cumipmt	total pmt
82800	23.69	-2367	5	-59227	-142027
82800	23.69	-2164	6	-73030	-155830
82800	23.69	-2027	7	-87464	-170264
82800	23.69	-1930	8	-102488	-185288
82800	23.69	-1860	9	-118057	-200857
82800	23.69	-1808	10	-134126	-216926

the rough estimate for $82800 in credit cards at your blended interest rate of 23.69% apr requires pmt for nper number of years. that is 40%+ of your take home for years to come, equal or more than your mortgage. anything beyond 5-6 years is unconscionable. at 7 years more cumipmt interest is paid than the original balance.

sure you can throw more cash at it and/or lower the apr at some point to help with the interest, but it needs to be really significant.

Re: Debt Consolidation- Please Help!!

Debtdebt — Fri, 23 Dec 2022 02:10:49 GMT

Tried looking at discover and Marcus loans but was denied due to:

-Proportion of balances to credit limits on bank/national revolving or other revolving accounts is too high
-Amount owed on revolving accounts is too high
-Length of time accounts have been established

Re: Debt Consolidation- Please Help!!

FireMedic1 — Fri, 23 Dec 2022 08:28:48 GMT

Any equity in the home? HELOC possibly. I've never said yes file BK. The biggest investment is a home. Credit cards are not. Were do you see yourself in say 3-5yrs after filing for BK. Fresh start and rebuilding. Or. Still paying on these debts and interest is flying out the window. Money lost. Never recovered. Choice is yours. Best of luck.

Re: Debt Consolidation- Please Help!!

Debtdebt — Fri, 23 Dec 2022 08:42:44 GMT

Yes there's about 100k equity in my home. My mortgage is through Chase and I thought most banks stopped HELOCs due to the current market. I want to be debt free in 3-5 years and not worrying about the credit card debt I'm currently stressing about. I'm just worried how a BK would affect my current home. Currently paying $1830 at 3.5% for my mortgage. I was planning on upsizing in 3-5 years because my family is outgrowing our current home.

@FireMedic1 wrote:
Any equity in the home? HELOC possibly. I've never said yes file BK. The biggest investment is a home. Credit cards are not. Were do you see yourself in say 3-5yrs after filing for BK. Fresh start and rebuilding. Or. Still paying on these debts and interest is flying out the window. Money lost. Never recovered. Choice is yours. Best of luck.

Re: Debt Consolidation- Please Help!!

SouthJamaica — Fri, 23 Dec 2022 15:35:32 GMT

@Debtdebt wrote:
Yes there's about 100k equity in my home. My mortgage is through Chase and I thought most banks stopped HELOCs due to the current market. I want to be debt free in 3-5 years and not worrying about the credit card debt I'm currently stressing about. I'm just worried how a BK would affect my current home. Currently paying $1830 at 3.5% for my mortgage. I was planning on upsizing in 3-5 years because my family is outgrowing our current home.
@FireMedic1 wrote:
Any equity in the home? HELOC possibly. I've never said yes file BK. The biggest investment is a home. Credit cards are not. Were do you see yourself in say 3-5yrs after filing for BK. Fresh start and rebuilding. Or. Still paying on these debts and interest is flying out the window. Money lost. Never recovered. Choice is yours. Best of luck.

I think you should definitely stay away from borrowing against your home. It's great that your mortgage is 3.5%.

Re: Debt Consolidation- Please Help!!

NoMoreE46 — Fri, 23 Dec 2022 17:25:03 GMT

Typically, you can reaffirm debt like your mortgage and car during a BK. This means the Ttee will let you keep the house etc. If you're planning on buying a bigger (hint: more expensive) home in 5 years, you should consult an attorney who can advise on your specific situation.

Shuffling your cc debt is not going to work. You will need significantly more income and to stop spending.

PS it looks like your utility is 85% and not 57%.

Re: Debt Consolidation- Please Help!!

NoMoreDebt — Thu, 29 Dec 2022 22:48:38 GMT

I'm not an expert but with your current debt load I believe as you already have experienced with that one lender is that they wont work with you due to your debt to income.

I say this as advice as i was in a similar situation and have been through a chapter 7 which wasn't a pleasant experience in itself for me. Debt consolidation and the such will not fix your problem. You have a problem of spending beyond your means that has began to spiral out of control and are now 1 mishap or "emergency" from everything tumbling down.

I wish you the best of luck at any rate