From your recent years of income, and setting out for your own business, it seems you have a plan to earn substantial income. The $70k of debt is a lot of debt, and your best option for the time being may be to just make the minimum payments.
Do you have enough cash flow to cover minimum living expenses? This would be only rent/mortgage, any car payment, vehicle gas, home utilities, food, and clothing for work, plus the minimum CC payments? No vacations. No movies out, no eating out, just the basics? Because if you do, then my suggestion is to only do the minimum payments, and focus all your energy on making your business a success. In the long run, that will provide you with enough income to take down the debt quickly. The lates are there, and as long as you don't incur any more lates, those will age off eventually. With time, and on-time payments, all FICO scores rise.
Spending time and energy now trying to sort this lump of debt is going to take away from your better opportunity, and as you are finding, the options you have to sort this lump are quite limited, not much savings available for a lot of effort necessary. Even the quest for rewards cards is only going to give you a small return, for what may be wasted time better spent on growing your business.
In credit scoring, the only absolute rule to follow is “always pay at least the minimum payment on time”. And have at least one revolving credit card report a balance.
Everything else, how much more to pay, whether to pay interest, utilization levels, are choices of how you use credit. The high utilization choice has consequences limiting further access to credit, but it is still just a choice you can change later on.
Make the business a success and the debt can be handled later.
Everything else, how much more to pay, whether to pay interest, utilization levels, are choices of how you use credit. The high utilization choice has consequences limiting further access to credit, but it is still just a choice you can change later on.
Make the business a success and the debt can be handled later.
@Anonymous wrote:Ok, so this is hard for me to do, I am swallowing my pride and basically making a stride to move forward.
So to start this off, in 2011 I had a career field change. I was a restaurant manager making 45k a year. In 2011 I found a career change that well changed my life, GOOD and BAD. in 2010 I made 45k. 2011 I made 78k and in 2012 I made 299k. 2013-105k and 2014-2017- 350k-400k a year. I thought I was rich. Taking trips all over the country, buying 100k mercedes etc etc etc You all know the story. So now after franchising from a parent company, me and 2 business partners decided to split out on our own. In Oct we started our own company, and got our first paycheck in April. And since april its been a weekly decision whether we get a check or not based on whats avalible. (The trials and tribulations of starting a new business). Well the problem is as follows, Im loaded to the GILLS in debt now, and with my uncertain paycheck weekly. Im not sure what to do.
Debt is as follows
1) American Express- 15k
2) Capital One- 13.4k
3) Discover- 9k
4) Chase- 19k
5) Wells Fargo- 3.6k
6) LendingClub- 8.2k
So as you can see, I have quite a bit of CC debt. I am making monthly minimums on most, and have had about 3 late payments this year. My credit is in the tank. I am willing to do whatever is neccesary to get this handled. I just dont know what the best approach is being that my check is up and down weekly. Minimums on 60k in CC debt is outrageous as you all know. The only caveat is When you want to consolidate them with a loan, they deny you because you have too much CC debt. Catch 22.
Please let me know what options I have or what options I should explore.
Sincerely,
BadSituation2018
Current situation is Sitting at a 564 Fico
Cards are all pretty much maxed.
1. You're young and have good prospects for a much better and more regular income, so don't panic.
2. You need to reduce expenses for now, so yes selling the house is a good idea, and IMHO you should sell the Mercedes.
3. Keep making your minimum payments + $5.
4. Once your income gets better, start paying everything down with the snowball method: (a) stop using credit cards (b) pay off lowest balance first, then next lowest, and so on.
5. IMHO you and your partner should decide on a minimum paycheck that you get each week.
