Overwhelming Debt

[RSX]

Thread title.  Overwhelming Debt

reason for posting.   Likely wants some advice

Post edited 

1. In my opinion you are overpaying on 3 things that can be avoided

[OmarR]

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@Anonymous wrote:

My score is killing me, not my loan's rate.

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You have to stop thinking like this.

[Jnbmom]

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@OmarR wrote:

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@Anonymous wrote:

My score is killing me, not my loan's rate.

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Your scores right now should be the least of your problems

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[Anonymous]

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@Anonymous wrote:
Hello,

I have quite a few collections and I don’t know what to do…

I bring home about $590 a week.

My bills are:
Car note $473 (28% apr)
Phone: $207
Cable: $147
Workers credit union: $130 (worked out a deal to avoid garnishment)

My collections:

sprint $1128 (2018)
ATT $2021 (2018)
Synchrony $550 (2019)
Capitalone $1700 (2018)
Macy’s $1200 (2018)

My scores are

Ex: 587

TU and EQ are below 580…

Should I give up?

I have AMEX, new capitalone secured and I’m an au on another Capita one.

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To answer your questions, yes, you should try for a PFD wherever possible. There's a lot of good information on this site about rebuilding. I would look around and find some pointers. You do not necessarily have to pay in full, but doing so gives you more leverage. Even if you have to make payment arrangements though, it will still be more beneficial than having a bunch of unpaid collections on your reports. You can search each creditor on this site and see how they typically respond. The accounts are all fairly new, just this year and last year. They have not been sold to collection agencies, correct?

As far as your disposable income...is your phone bill for just your phone, or does it include your mom's or SO? Did you sign a contract for services? If you did, cancelling it will likely lead to another collection on your credit report for whatever remains on the contract. However, if not, I'm sure you know a pre-pay service may be cheaper. This, of course, depends on how many phones you are paying for.

Cable bill...Not sure how everyone in the house would feel about you cancelling the cable and whether or not this includes wifi. I'm not going to argue whether you need cable or not. You're an adult. I, personally, do not have cable, but you would have to pry the wifi out of my cold dead hands.

Car...unless you have the extra money to buy a car in cash AND could sell the car you have for what you owe on it, I do not see the point in arguing the validity of this either. Are you paying too much interest? Absolutely. Are you stuck with it for a while longer? Probably. Keep the payment current and help your and your mother's credit as much as possible. When you get your scores up, and hopefully those negatives off, refinance. DCU is a great credit union.

Although it seems overwhelming, you really do not owe THAT much. Yes, you can absolutely do this. If it were really an unmanageable amount, I would suggest bankruptcy. But for such a small amount of debt, you can really buckle down, negotiate with them as much as possible, and make it happen. If possible, find extra income sources.

Best of luck to you. 

[gdale6]

Alright, lets all remember to be FSR to one another, there are some posts approaching flaming in here and to cross that line would be a TOS violation. Lets all play nice. Thanks for your understanding.

[Girlzilla88]

@UnionOfWar all I'm saying is I was in a super similar situation to you bad credit, a previous repo (from years ago), a current high apr and several collections and I got my ducks in a row and now understand credit better to do better and I watch my money better as well.    It's doable and you can do it if you discipline yourself!      

[Anonymous]

What are the details on the car loan. Amount. Year. Make. Term left.


Even if you get a better rate the vehicle may still be to expensive for your current income

[Anonymous]

I think the cable imo would be the first to go.    Netflix works wonders. Your cell bill is larger than DW and mine and we have a large data plan as a hot spot back up for work and a cell phone we are paying on.   Can you provide the details about cell.   With no rent this should be a matter of budgeting and priorities.   During the great meltdown of 2008/2009 DW and I were balance chased and lived off $1 tv dinners.  I was teaching a class for several counties on foreclosure prevention. DW was selling a few houses at the real estate firm we own , atleast enough to keep the biz open. The people I was teaching the foreclosure prevention class to made more than us.   It finally worked out now our scores are over 800 FICO last year we bought a new Jeep paid $10,000 down  and financed the balanced at 2.99% apr. 

[Anonymous]

There’s been a lot of back and forth on this but here’s what I’m seeing from OP’s post:

$6600 in collections
$354/month for non-essential services (phone/cable)
$xxx in miscellaneous “nice things” being bought

Ignoring the car right now, even without factoring in whatever those miscellaneous expenses are (the money for which should be put toward debt, not frivolities), in just over 18 months the money being spent on phone and cable would pay those collections off completely and in full, less if negotiated for a settlement, without ANY extra money. Kill the cable, make a one-time purchase of an antenna to get a couple dozen channels, and get Tracfone or something similar. You could even see if someone would add you to their phone plan, since that’s prob only $30-40 a month and you could keep the phone you currently have. That alone would save you $100+ per month. Yeah it sucks not having the luxuries but it comes down to how serious OP really is about clearing the debts. If you’re absolutely dead-set on fixing the situation, go caveman with life for awhile, skip the niceties, and hammer it down. Hell, there’s a guy here on the forum who is working like 3 jobs plus odd jobs, going to school, living in his truck (his main job is driving for a living), donating plasma twice a week, going completely hardcore to pay of $110,000 of debt. He’s paid off like $27,000 since April and is managing to even save some cash along the way for unforeseen emergencies. Your $6600 can be paid off easily if you really want to do it.

OP, you said that it’s your score that’s killing you but the reason for your score is the debts you’re carrying, and the money IS available to pay them off. It’s not a fast fix but it’s not forever, and it’s a helluva lot less time than the effects of a BK. And since the APR on your car loan almost guarantees you’re upside down on it, getting this other stuff cleared would help your scores and eventually allow you to refinance it.

This doesn’t mean I think keeping the car is a good plan. I don’t. But I also don’t see you getting a lower rate until your collections are paid. Even if you get no PFDs, having them paid and aging a bit can make a big difference in lenders working with you.

Lose the luxuries like the phone plan and cable, take that and the money you’re using to buy nice things and throw that at your debts, don’t charge on your current cards, and you’ll be seeing daylight quite quickly. Throw in your tax refund too if you get one, and pay it off even faster.

[Anonymous]

There are some really decent phone plans out there. My DH is a very high data user with his phone and we only pay $40/month (NO other fees) for unlimited everything through Visible. I use Red Pocket's $15/month plan and utilize his phone's hotspot whenever I'm home to make 1GB/month barely sufficient data for me. So between the two of us we have everything we need for $55/month.

I agree that is sounds like cutting expenses and buckling down to paying these off could spring you out. At one point DH and I couldn't even afford to buy butter for months. I complained just about every day about it, but each month our grocery budget was just too tight on essentials keeping us fed. We technically could have bought butter, but then we'd have to forgo money on something else important to us, which at the time was our goal of building a saving's cushion. We had to live as if we were poorer than we already were in order to get to where we wanted to go.

Living below your means is tough when your income is already low, but that is the mathmatical key to financial stability and freedom. It often means you give up some nice things so that you can buy yourself what's going to make you happy in the long run.

One thing I haven't seen mentioned....what does your SO make/contribute to the household expenses?