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Drowning in Utilization Hell!!

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Drowning in Utilization Hell!!

Guys, 

 

I'm going to be 100% honest here. Looking for real feedback. $38K in CC Debt, not counting the $150K in student loans. I make $99K/yr, and pay $1800/mo child support. Car ($220/mo $11K overall), bad high interest loan ($9K/ $397 mo payment) and rent is $1400. I need help. My scores have swung wildly (25pts or so over the last four months) and all six cards are maxed out:

USAA x2 10,400 each

Citi AA $12,100

Citi Thank You $2000

BofA $2000

Chase $500

 

I took out a 401K loan to pay the debt down (was orignially $55K) and after I paid $20K off BofA closed one card and Chase cut my limit from $3200 to $500. My utilization is killing me and I cannot figure out a way to pay it down... SLs are in deferment so that is currently not a concern. I'm overextended, stressed and looking for a way to fight this! In short, I'm drowning but I refuse to file bankruptcy. HELP! 

 

656 Eq/659/TU/659/EX

EQ: 655
TU: 661
EX: 663

Goal: 700
10 REPLIES 10
Super Contributor

Re: Drowning in Utilization Hell!!

Why do you refuse to file bankruptcy?

Message 2 of 11
Super Contributor

Re: Drowning in Utilization Hell!!


@DubF wrote:

Guys, 

 

I'm going to be 100% honest here. Looking for real feedback. $38K in CC Debt, not counting the $150K in student loans. I make $99K/yr, and pay $1800/mo child support. Car ($220/mo $11K overall), bad high interest loan ($9K/ $397 mo payment) and rent is $1400. I need help. My scores have swung wildly (25pts or so over the last four months) and all six cards are maxed out:

USAA x2 10,400 each

Citi AA $12,100

Citi Thank You $2000

BofA $2000

Chase $500

 

I took out a 401K loan to pay the debt down (was orignially $55K) and after I paid $20K off BofA closed one card and Chase cut my limit from $3200 to $500. My utilization is killing me and I cannot figure out a way to pay it down... SLs are in deferment so that is currently not a concern. I'm overextended, stressed and looking for a way to fight this! In short, I'm drowning but I refuse to file bankruptcy. HELP! 

 

656 Eq/659/TU/659/EX


Best way out is snowball method.

1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.

 


FICO 8: EQ 735 TU 760 EX 729 Total revolving limits 719k (592500 reporting)
Message 3 of 11
New Member

Re: Drowning in Utilization Hell!!

Because I don't want to do it. There's a way out that doesn't wreck my credit for 10 years. And my job may be affected filing. So that's not an option.
EQ: 655
TU: 661
EX: 663

Goal: 700
Message 4 of 11
Community Leader
Valued Contributor

Re: Drowning in Utilization Hell!!

Well if it may hurt your job I can understand,  but stating it will wreck yiur credit for 10 years is simply not true. .

Message 5 of 11
Community Leader
Senior Contributor

Re: Drowning in Utilization Hell!!

Hi OP and welcome to MyFICO

 

Call each CCC and ask if your interest rates can be lowered. If it were me, I would just be upfront about my situation.

 

Is there anyway you and your SO can work out a temporary arrangement to pay less in child support for 6-12 months so you can pay down cards with the highest interest rates. 

 

Since it’s the holiday season, FedX and UPS are hiring seasonal workers. You can pick up some extra cash that way. 

 

GL2U

GOALS: Garden til APR 2020 and 800 Club



JUN 2019: EX 788, TU 794, EQ 779
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $25K || NFCU CashRewards $20K || Macy's $20K || Discover IT $18.7K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 6 of 11
Valued Contributor

Re: Drowning in Utilization Hell!!

Don't give up hope.  You have come to a great place for support and advice!  

 

I know every situation is different, however I will share what my wife and I did that got us through extremely high credit card debt.  We went through some extremely ugly financial times about seven/eight years ago.  Our credit card debt alone was north of $50K and we were getting killed with interest.  We did have to "settle" with one credit card company which was rough, but we then took every dollar that we would have sent to that company and began to pay the others.  At the same time, we went a couple of years of basically eating rice and beans and cut expenses like crazy.  All the money we saved from those efforts went to the credit card devils.  Any money that we saved in interest after paying off a card then went to the others.  We also took steps to increase our income via my wife taking on a second part time job, with that money also being used to pay down the debt - basically the snowball version.  

 

After a couple of years of what is described above, we were able to get rid of all debt and have now been free of any credit card debt for about four years or so.  We've since increased spending a bit, however for the most part all the interest that we were paying to the credit card devils (and it was a LOT) is now mostly going into savings. 

 

I know every scenario is different, and what works in one situation may or may not work for others, but wanted to share this in the event that you believe any of the elements that we did may help you. 

 

Best wishes! 

 

Year 2012: All Scores in the 520 range, during a foreclosure, CC Settlement and high UTIL. Very ugly days...
Aug 2019: EX8: 850; EQ8: 850; TU8: 850 -- Middle Mortgage Score: 820
In My Wallet: Discover $73.7K; Cap1 Venture $36.7K; Amex ED $38K; Amex Optima $2.5K; Amex Delta Gold $18K; Citi Costco $16.5K; Cap1 Plat $8.4K; Barclay $7K; BoA Plat $21.6K; Citi TY Pref $18K; US Bank $4K; Dell $5K; Care Credit $6.5K. Total Revolving CL: $266K
My UTIL: Less than 1% - Only allow about $10 a month to report, on one account. .
Message 7 of 11
Super Contributor

Re: Drowning in Utilization Hell!!

While it may seem obvious and is certainly easier said that done, one or both of the following need to happen.  One, cut expenses or Two, increase income.  Those are the only 2 ways to produce additional money to put toward the debt.  Only you know where you can impact either of these two.  For example, if you're already working 2 jobs and 60-70 hours a week, increasing income probably isn't an option.  Similarly, if you've already cut your expenses down as much as possible, perhaps there aren't any other opportunites there.  Usually when it comes to expenses, though, there are more opportunities if you really think about it, even if they aren't appealing.  Things like getting rid of cable, selling your car for a cheaper one, buying cheaper food as referenced above by EW800, etc.

 

I do think trying to reduce your "set" expenses is a great idea, though.  Contacting your CCCs and requesting APR reductions, or seeing if you can negotiate less child support temporarily anyway.  If your credit profile was a bit stronger and I thought you could benefit from a 0% BT card I'd suggest it, but I don't think the SL on the card would be large enough to really make a significant impact in reducing your interest.  Maybe something like a debt consolidation loan would be worth considering, but I'm not at all familiar with that process.

Message 8 of 11
Frequent Contributor

Re: Drowning in Utilization Hell!!


@DubF wrote:

Guys, 

 

I'm going to be 100% honest here. Looking for real feedback. $38K in CC Debt, not counting the $150K in student loans. I make $99K/yr, and pay $1800/mo child support. Car ($220/mo $11K overall), bad high interest loan ($9K/ $397 mo payment) and rent is $1400. I need help. My scores have swung wildly (25pts or so over the last four months) and all six cards are maxed out:

USAA x2 10,400 each

Citi AA $12,100

Citi Thank You $2000

BofA $2000

Chase $500

 

I took out a 401K loan to pay the debt down (was orignially $55K) and after I paid $20K off BofA closed one card and Chase cut my limit from $3200 to $500. My utilization is killing me and I cannot figure out a way to pay it down... SLs are in deferment so that is currently not a concern. I'm overextended, stressed and looking for a way to fight this! In short, I'm drowning but I refuse to file bankruptcy. HELP! 

 

656 Eq/659/TU/659/EX


I'm thinking your take home pay is north of 6k/month. The bills you listed are 3817.  Snowball method with likely work, pay off lowest balances first.  Then do not use those cards any more.  Even 1500/month towards CCs and in  sometime around 3 years you should be free from debt.  Better than 7-10 years BK.




Starting Score: 697,722,705
Current Score: See Above
Goal Score: 775


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Message 9 of 11
Super Contributor

Re: Drowning in Utilization Hell!!


@Workin4abetterFICO wrote:


I'm thinking your take home pay is north of 6k/month. The bills you listed are 3817. 


If roughly 1/3 of his gross income isn't taken home, that brings take home to about $5500/mo.  The $3800 in bills he listed was only a few of them.  He didn't mention all of the other common bills like heat/hw, electric, insurance, cell phone, food, cable, gas, etc.  All of these other things could easily constitute around another $1000, thus not leaving much left when you think about it.

Message 10 of 11
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