Desperately need help

[Anonymous]

So I'm 33 and work as a teacher at a private school. I only make 40k a year, and I've been in debt for a while and at this point I just see the writing on the wall that I just can't really make this work anymore. I have 19.5k of credit card debt, basically across 3 credit cards. The first card is the biggest one with about 12k, the 2nd card has about 6.5K on it and I have it at 0% APR for the next 12 months. The third card has about 1200 on it and also has 0% APR for the next 12 months. I recently took advantage of some balance transfer offers which is why you see the 0% on those 2 credit cards.  I also have one student loan (federal) for about 20k which is at about 4.5% interest which is locked in.

FYI as for a background on why the credit got so high. In 2012 I did the stupid thing of walking away from another teaching job I had because I was upset I was only getting paid 28K and I was told they couldn't give me a raise. It hurt and I couldn't land a teaching job for like 3-4 years and in that time I wracked up around 13-14k of that credit debt. The rest of the debt came from furniture and some collectibles, that I probably shouldn't have bought that pushed it up to the 19K number. Even so the damage was done after leaving that job and I never really recovered.

Right along I've always looked into getting a loan to consolidate everything (this was before the balance transfers I did recently), but I've decided this is a dead end. With a credit score currently of 683 and a credit card utilization of around 63%, I can't get any loans with good interest rates. Most interest rates come in around 15-18% with one or two maybe being around 12-13%.

I only make about 2k a month after both paychecks. My monthly expenses look something like this ...

• rent - $700
• (geico) car insurance - $100
• national grid (electric) - $75
• national grid (heat) -   $100
• comcast -                         $50
• verizon (phone) -      $67
• Bank of america cc (1) -    $240
• Bank of america cc (2) - $25
• Citi CC     -                           $100
• Medical payments - $75
• student loans just kicked in as well after I used up all my deferment time, this bill will be another $188.

And this is not including gas and food.                     

I've looked into debt relief programs, but to be honest a lot of them sound shady and when you do a few quick number crunches, they aren't even really doing much to negotiate with the banks on the money you owe. All that risk to work with them and in the end most offers I've seen I would still have to account for like 15K of that credit debt.

I'm not sure If I'm missing anything here, but if anyone else has any ideas, I would appreciate it. In terms of career wise, I'm in a tough place. I've kind of had it with teaching. It's just such a lose lose type of job. You work in a private school with good kids and parents, and the job is reasonable and not too stressful but it comes with the burden of low pay. You go over to public school districts and there is high pay but a lot of the students/administrations are beyond stressful. I know too because I've worked in a number of them throughout my ten years of being in education. All of my worst years were in urban public school districts.

This whole thing continues to do a number on me. I have high anxiety and get medicated for it as well as meet with a therapist. At this point I'm really starting to wonder if filing bankruptcy would be the best move. I tried like a bastard to get a better teaching job this summer, but nothing worked out. At this point I'm going to have to try to get some part time job that pays at least semi well. It's not a good feeling to get a part time job that pays $10, not when your already spent from all the hours you have to put in teaching and correcting papers.  I feel with bankruptcy it might give me some breathing room from getting the credit off my back so I can at least live normally and start saving a little bit or just start focusing on the my student loans more. I mean even if I work two jobs and somehow pay off all this credit debit within 3 years, it will leave me with no savings. That's why I feel that maybe filing bankruptcy, I can build back up my credit in that time and also possibly have some kind of savings to at least start considering buying a house.

The only real thing I have right now is my 401k which only has 9K in it at the moment. And I can't access that money unless I am separated from my employers, and it's a shame, because even though it would be taxed and penalized 30%, I feel that money could help put a dent and eliminate some of my credit cards.

So there it is. I'm pretty broken and defeated by most of this. It pretty much gives me panic attacks every time I think of it. I just thought I should start reaching out to communities to see if anyone had any good advice or things I could do that would help.

[Anonymous]

First its calm down.   $40K is not a bad income infact where I live considered high end.   yes I live in the middle of no where and you live inthe midatlantic area with a high cost of living.    Several  thoughts  come to mind  1) is your apartment big enough to get a room mate.  I know this not a fun thought but it does cut costs alot 2)  I would look for a night, weekend, Chrismas Holiday and summer job.   I would hope inthe field of your major but I would look at all  the big box stores and fast food, one of members delivered pizza every night and on weekend and I believe he made as much as his day job.  It got him out of debt.   15 years ago when dw and I  started our current biz I worked from 6 PM to    11 PM and most weekends for a big box store while we were starting our biz so I went straight from day job to big box.    3)  During the 2008/2009 crisis our food budget for 6 months was $1 tv dinners every single night   It was not fun but it was cheap and left money for other more important thngs like electricity.    4)  I would start look for a higher paying school even if it is a public school  Yes The kids are worse.  I went to a Church School (private school) . One of the highest rated in our state. The headmaster was aware of the rankings and as a result many people fought to get their kids in but also adults fought to teach there . As a result they paid terrible. All the single teachers moonlighted to survive.  Best of luck    

[Trudy]

Welcome to the forum.  Unfortunately I'm not the person to give information regarding your specific situation but I want to commend you as an educator, as hard as it is.  You deserve higher pay and much more respect.  

Hang in there and if this post doesn't get enough hits, keep trying because there's a lot of knowledgeable people here and confident that someone can help with a game plan.  Maybe try some other forums (although it may be moved to a different) but don't give up.  Sometimes there are better times and date with more traffic and it will be more visible. 

I wish you the best.  The only thing that rings for me to add is that high cost of living areas with certain circumstances are difficult to improve your financial situation without more resources, although possible and may be slower recovery.  At this stage in your life you may want to think about relocating which sometimes take you away from your comfort zone.  But if the situation is dire enough it could be a life saver if you find the right place to live.

I relocated to a state where I knew no one and although a very different situation and I relocated to a MUCH higher cost of living area, it provide more income based on location and my field and ultimately a happier life.  Living here now I've made friends who had to leave due to the cost of living and they have landed somewhere with a much lower cost of living and found their happiness.  Some have rebounded enough to move back here where they have family and be okay financially after getting out of dire debt.

Good luck to you.

[Anonymous]

I mean in the end, I agree I need to pick up 2nd and maybe even a 3rd job. I did spent most my summer looking for other teaching jobs even public ones, but it didn't go well. So now I'll just have to be looking at part time stuff. If my apartment was big enough I would definitely consider a roommate but there is no room for a 2nd bedrom. Hell even if I moved in with a roommate somewhere else, I feel like it won't make that much difference with how expensive apt rents are. 

[Anonymous]

Yea that's one thing I didn't do was really look for jobs outside of MA. I prob should have, I guess I just wanted to stay in the comfort zone a little. It's something I'm going to have to strongly consider. It's unfortunate though because if I just landed a job making 10k more and then had access to my 401k I feel I could turn this around. But I'm on the fence right now with my checking account approaching $0. 

[SouthJamaica]

IMHO bankruptcy is not necessary

My advice
1 get 2nd job
2 no more borrowing
3 join credit union
4 use snowball method to reduce revolving balances
5 forget about zero interest rate deals, those are traps which have ensnared you

[Jnbmom]

I agree with other posters, you can find a way out but it will be a challenge , but doable.

Honestly I wouldn't suggest BK on that amount, yes any debt seems high when you are struggling,  but most dont declare for that amount.

Good luck and keep us posted.

[Anonymous]

I agee BK is not the best solution. It won't help student loans. Regarding roommates yes the rent for entire unit might be $1,000 but 1/2 is $500  this saves $200  month ie $2400 a year and imo that is significant.  Rents are not cheap anywhere.   Where i live $700 to $800 will usually get you an older 2 or  3 bedroom house that is very basic not that well cared for but it does allow for roommates.    

[Kidcat]

Hi OP

You mentioned that you purchased some collectibles.  Is there anything that you could sell to get some immediate relief.  I've personally sold some things on ebay at different times, and if I put my mind to it and really needed the money I could generate another $500 per month, just from stuff I already have.

If you have previously spent money on nice things, they may be things that someone else would pay for right now.  Also it sounds like you are single without kids (just an assumption based on your post).  So you "should" be able to fit in a part time 2nd job without infringement on family time.  

These things will provide immediately relief which may give you the breathing room to get going on a debt snowball plan.

Good luck

[credit_is_crack]

Hi @Hanzo18 -- sorry you're feeling like you're in the pits, it can be a sinking feeling. 

With that said, I think we just need to change perspective a bit. Here are the things that stood out to me

• You have $19k in debt, 3 cards ($12k, $6.5k and $1k -- 2 @ 0%)
• You're paying $365 for credit card payments
• You like the comfort of the lower stress private teaching job
• You recognize urban schools pay more, but come with stress
• Renting space is not an option
• You do have the option of a loan between 12% - 18%

My questions regarding tackling debt (which snowballs into everything else you mentioned)

• Which of those two cards are the ones sitting at 0% and how much time is left?
• For the card with a non 0% APR, is the APR higher than the 18% max offer for your personal loan?
• When you applied for the loan did it cover all 3 cards or just the non 0% cards?
• If you did move forward with the loan would the overall interest be less than what you're paying on the cards (mainly that 3rd card)?
• If you did get the loan, is the payment amount less than what you're paying now ($365/mo)
• Are you maxed out on these cards? What's your UTI carrying that $19k?

Your offered interest on the loan weighs heavily on your score, which is being dinged by the higher utilization. Yes, transferring the debt to a loan still leaves the same debt, but it will compound much slower than credit cards would. The impact of the lower card UTI would outweigh the impact of the new loan showing up. 

You make payments on the loan and cards, and 6 months down the line (with the higher credit score), you do a little shopping for an even lower loan, slowly chipping away at interest and getting you to your preferred 'good rate'.

I think you're looking for a solution that's going to fix everything now, but you didn't get into this spot all at once. You went thru stages to get into this, and you'll want to take stages to get out of it. 

Good luck to you!