topic Re: More Debt Than Income in Rebuilding Your Credit

More Debt Than Income

Anonymous — Wed, 08 Jan 2014 00:35:15 GMT

Hello Everyone!

I am beginning the steps to become debt free. The issue is I have a TON of debt. I do not even make enough money to cover the minimum payments on some of my debt. I make the awful mistake of getting a Cash Call Loan in the state of California 3 months ago and I find myself in the position of not being able to pay the full payment. I have about $15, 000 total of Credit Card Debt, including this Cash Call Loan. Has anyone else ever gotten out of debt with low income? I work a full time job and my husband was laid off. We needed the money, so please do not be cruel! I know what a mistake I made. I appreciate all the advice!! I am ready to become Debt Free but so much of the advice online refers to those that make a ton of money! I consulted with a Debt Settlement Company but their fees were outrageous.

Thank you!

Re: More Debt Than Income

blondy250 — Wed, 08 Jan 2014 01:07:28 GMT

No ones going to be cruel, how much is your income, and list a breakdown of your debt including the interest your paying on each account.

Re: More Debt Than Income

ezdriver — Wed, 08 Jan 2014 02:00:38 GMT

No one here will judge you. We are all here to help each other. The more details you provide, the more specific recommendations we can offer.

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 04:31:55 GMT

I am so embarrassed but I am excited to get on the right track and get out of debt. I considered Bankruptcy but I would like to get myself out of this mess. Any advice is appreciated!

Capital One: $400.00 Balance, $500.00 Credit Limit, 19.99% Interest Rate

Target: $100.00 Balance, $200.00 Credit Limit, 22.99% Interest Rate

Cash Call Loan: $2595.00 Balance, 135% Interest Rate, Loan Obtained in California

GE Care Credit: $290.00 Balance, Credit Limit $1000.00, 26.99% Interest Rate

JC Penney Credit Card: $4200.00 Balance, Credit Limit $5000.00, Interest Rate 19.99%

Victoria's Secret: $150.00 Balance, $250.00 Credut Limit, Interest Rate 24.99%

Macy's: $2400.00 Balance, $2600.00 Credit Limit, Interest Rate 24.99%

Car Lease $200.00 Per Month with Toyota Financial. 18 more months left on this lease and I will never lease again!

I also pay about $500.00 in household bills a month including mortgage/utilities/gas. I cancelled the cable yesterday.

I make $906.00 Bi-Weekly. I really really want to get out of debt. I will budget and do whatever it takes. What is the first step I should make?

Thank you so much!

Lisa

My Current Credit Score is 521 I hope to raise this within the next 2 years as I get out of debt.

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 11:55:11 GMT

With what you have, and owe, it would be a good idea for you to find a local certified financial coach/planner. They are good at reviewing your financials with you and helping you setup good budgets, and help you reach your short/long-term goals with all the areas of your life, not just your credit cards. [NOTE: I 'm not talking about a Credit Counseling service] steer clear of those; as they're name's can be misrepresenting. Keywords [Good: Coach/Planner -- Generally Bad: Counseling]

Re: More Debt Than Income

0REDSOX7 — Wed, 08 Jan 2014 13:48:35 GMT

What about credit counseling agency?

I used one and they got my monthly payment down combined over 400.00. Many of the accounts you listed would be sufficient and be accepted, but, not sure if you want to go that route.

I had to file BK unfortunately, but the CCA just delayed it about a year and helped out at the time.

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 16:31:11 GMT

Great ideas! I will look into that today. Thank you both!

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 19:02:56 GMT

You're sure that your monthly bills are about $500? This includes utilities, rent, gas, food, insurance for self, car, home, and everything required to run your day to day life for a month not including credit cards?

Do not do consumer credit counciling - they will pay themself first, and wreck your credit. The financial planner advice seems safer.

*edit*

Is your husband receiving any kind of assistance such as Unemployment Insurance payments? I hope he is back to work soon, or takes a job that he might not want. It is less than ideal but it's better than struggling. Are you in a position to take on an additional part time job?

Re: More Debt Than Income

0REDSOX7 — Wed, 08 Jan 2014 19:04:05 GMT

Notfancy, I am not sure how you can say they will ruin your credit? That's a very bold statement, and I would ask the OP to consider all options.

I used a very reputable company for over a year who had a low monthly fee and they were perfectly fine. They helped me with my monthly payments and my credit did not get tarnished. I think the key is to pick a reputable one.

Re: More Debt Than Income

Leadberry — Thu, 27 Feb 2014 23:11:44 GMT

Re: More Debt Than Income

0REDSOX7 — Wed, 08 Jan 2014 20:26:08 GMT

I am not promoting a CREDIT REPAIR ORGANIZATION, but simply mentioning the use of a CREDIT COUNSELING ORGANIZATION may help this user.

I will direct the user to this forum, in the Bankruptcy section.

http://ficoforums.myfico.com/t5/Bankruptcy/How-to-Select-a-Legitimate-Credit-Counseling-Agency/td-p/287470

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 20:29:18 GMT

Yes, we were lucky about 5 years ago we purchased our home for only $72,000.00 therefore our mortage is $550.00 per month & we split this. I cancelled the cable so our home costs include our Water, PG&E and the Mortgage. My insurance has been paid for a whole year for my car, so I do not have to worry about this until January 2015.

At this point my husband and I are separating, although still living together & spliting the home costs. I am on my own with getting out of debt.

I was up very late last night and set myself up a budget. I will now account for every single dollar that comes in and goes out. I have faith that I can do this and get out of debt on my own. I will look into financial planning. Definitely not counseling.

I have found some amazing advice in these forums. I know it will be hard, but I look forward to trying. My main issue is the Cash Call Loan & extreme interest rate.

Re: More Debt Than Income

Pupeitmeister — Wed, 08 Jan 2014 21:04:10 GMT

To make an ice swan, the sculptor takes very small pieces of ice off of a block. Unfortunately the cash call account will be a tedious task to repay. As your highest interest it will take some work. When i get home i will review this thread to see if i may offer a resolution that is agreeable to ldg209.

Re: More Debt Than Income

Anonymous — Wed, 08 Jan 2014 22:26:34 GMT

Thank you Pupeitmeister. I appreciate your help.

Re: More Debt Than Income

ezdriver — Wed, 08 Jan 2014 23:06:35 GMT

@0REDSOX7 wrote:
I am not promoting a CREDIT REPAIR ORGANIZATION, but simply mentioning the use of a CREDIT COUNSELING ORGANIZATION may help this user.

I will direct the user to this forum, in the Bankruptcy section.
http://ficoforums.myfico.com/t5/Bankruptcy/How-to-Select-a-Legitimate-Credit-Counseling-Agency/td-p/287470

I agree ... a little 3rd party assistance can't hurt. Seems she's on the right path having posted that she has put together a budget to track all funds coming in and being paid out. That is a great step.

Re: More Debt Than Income

ezdriver — Wed, 08 Jan 2014 23:17:01 GMT

@Anonymous wrote:
I am so embarrassed but I am excited to get on the right track and get out of debt. I considered Bankruptcy but I would like to get myself out of this mess. Any advice is appreciated!

Capital One: $400.00 Balance, $500.00 Credit Limit, 19.99% Interest Rate
Target: $100.00 Balance, $200.00 Credit Limit, 22.99% Interest Rate
Cash Call Loan: $2595.00 Balance, 135% Interest Rate, Loan Obtained in California
GE Care Credit: $290.00 Balance, Credit Limit $1000.00, 26.99% Interest Rate
JC Penney Credit Card: $4200.00 Balance, Credit Limit $5000.00, Interest Rate 19.99%
Victoria's Secret: $150.00 Balance, $250.00 Credut Limit, Interest Rate 24.99%
Macy's: $2400.00 Balance, $2600.00 Credit Limit, Interest Rate 24.99%
Car Lease $200.00 Per Month with Toyota Financial. 18 more months left on this lease and I will never lease again!

I also pay about $500.00 in household bills a month including mortgage/utilities/gas. I cancelled the cable yesterday.

I make $906.00 Bi-Weekly. I really really want to get out of debt. I will budget and do whatever it takes. What is the first step I should make?

Thank you so much!

Lisa

My Current Credit Score is 521 I hope to raise this within the next 2 years as I get out of debt.

Sometime we are driven to be heros when the better move would have been to take a few steps back before moving forward. I recommend that you consult a bankruptcy attorney. It will not cost you anything but some time and you may well learn if you qualify for seeking a fresh start through a Ch 7 or Ch 13 bankruptcy.

Re: More Debt Than Income

Pupeitmeister — Thu, 09 Jan 2014 03:33:25 GMT

@Anonymous wrote:
Thank you @Pupeitmeister. I appreciate your help.

It is my pleasure. When I was a younger lad, close to 19, I had a gentleman able to sit down with me and explain a LOT of debt reduction techniques, This is one chance I have to pay it forward. I started a thread (not going to link it here) on CC payoff, feel free to search for it and join in, there may be many more that are willing to input advice and assistance. We are always glad to help those that are helping themselves.

Many blessings to you, Just be grateful for what you do have, and look forward to a time when you can help someone else to learn from your lessons.

Re: More Debt Than Income

Anonymous — Thu, 09 Jan 2014 03:49:39 GMT

@Anonymous wrote:
I am so embarrassed but I am excited to get on the right track and get out of debt. I considered Bankruptcy but I would like to get myself out of this mess. Any advice is appreciated!

Capital One: $400.00 Balance, $500.00 Credit Limit, 19.99% Interest Rate
Target: $100.00 Balance, $200.00 Credit Limit, 22.99% Interest Rate
Cash Call Loan: $2595.00 Balance, 135% Interest Rate, Loan Obtained in California
GE Care Credit: $290.00 Balance, Credit Limit $1000.00, 26.99% Interest Rate
JC Penney Credit Card: $4200.00 Balance, Credit Limit $5000.00, Interest Rate 19.99%
Victoria's Secret: $150.00 Balance, $250.00 Credut Limit, Interest Rate 24.99%
Macy's: $2400.00 Balance, $2600.00 Credit Limit, Interest Rate 24.99%
Car Lease $200.00 Per Month with Toyota Financial. 18 more months left on this lease and I will never lease again!

I also pay about $500.00 in household bills a month including mortgage/utilities/gas. I cancelled the cable yesterday.

I make $906.00 Bi-Weekly. I really really want to get out of debt. I will budget and do whatever it takes. What is the first step I should make?

Thank you so much!

Lisa

My Current Credit Score is 521 I hope to raise this within the next 2 years as I get out of debt.

Would you feel comfortable posting what your minimum payments are listed as on each account?

Re: More Debt Than Income

Anonymous — Thu, 09 Jan 2014 03:52:01 GMT

@0REDSOX7 wrote:
Notfancy, I am not sure how you can say they will ruin your credit? That's a very bold statement, and I would ask the OP to consider all options.

I used a very reputable company for over a year who had a low monthly fee and they were perfectly fine. They helped me with my monthly payments and my credit did not get tarnished. I think the key is to pick a reputable one.

I apologize for my response that was rather emotional sounding and knee-jerk. I had at one point worked in an industry where I had the ability to view credit reports and I saw first hand a lot of damage on each person's account caused by them. (I know they had lates and trouble before joining those companies, of course, but afterwards it was pretty terrible) Perhaps it was just the times, or any number of varied reasons, but that impression stuck with me based on what I saw.

Re: More Debt Than Income

Anonymous — Tue, 14 Jan 2014 21:10:33 GMT

@LeadBerry - I think you're misinterpreting that terms of service you are quoting.

1.] "PromotionCredit Repair Organizations...or services of such an organization"

- 0REDSOX7 never promoted a credit repair organization. [e.g. "Guaranteed score increase...." type place] Counseling services aren't classified as credit repair. At the very most a reputable organizaiton, which are the words REDSox7 used; are a form of debt management/planning.

2.] 0REDSOX7 never singled out any single organization, period. They just said they used a reputable counseling service and recommend finding such a reputable non-profit.

MODCUT

Edited by Shogun, myFICO moderator

*Not locking this thread due to the needs of the OP, however, please post appropriately. If any information is questionable or needs attention, please fill out an abuse report to notify one of the mods. Thank you.