Bad times

[Anonymous]

Hi everyone!

 It's been almost a year since I've been here, and I wish it was on better terms for my return. 

long story short- I was let go from my job for enlisting in the Army (I know, very illegal and I chose not to pursue any legal matters). Because of this I've racked up quite the debt. I was in able to go into the Army for some medical issues that arose. 

Current day- I work as a 1099 contractor for a few companies and the money is inconsistent. I've been applying for new jobs but the market is crazy right now and very competitive (for a wage that I am comfortable with). 

Until I secure a new position, what suggestions are there for me? I've not been using the cards but unfortunately I'm only able to pay minimums due. I do have a few cards I will be able to pay off soon and will use those payments towards other cards to help pay them down, but what else is there for me to do?

FICO scores are hovering around the 675 range, unfortunately. BK is not an option I'm willing to consider at the moment as I am looking at positions in other states (I've interviewed and I'm waiting to hear back), and a BK will cause me issues finding a house. 

Thanks everyone!

[Anonymous]

Maybe you can do door dash or something for a little supplemental income to pay your cards down?

Are you asking what you should do to pay your cards down, or do you have other negatives besides high balances on your report?

[kb2ehj]

Like stated in the above post, you take a second or third part time job and pay them off.

Amazon is always hiring, it's not the greatest but it's money.

[Horseshoez]

@Anonymous, have you considered construction?  I ask because I am close with a family which owns their own construction and building management firm and they are literally desperate to find folks who are at least handy enough with tools to pound a nail into a board with a hammer.  I am fortunate in that I work in a new and exploding industry niche and am unlikely to be out of work any time soon, but if it comes to that, I'd be happy to take a job pounding in nails and sawing lumber. 

[Anonymous]

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@Anonymous wrote:

Maybe you can do door dash or something for a little supplemental income to pay your cards down?

Are you asking what you should do to pay your cards down, or do you have other negatives besides high balances on your report?

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I currently do doordash, Shipt (similar to instacart), and Uber eats. 

Nothing negative on my reports, just the high balances. 

[Anonymous]

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@Horseshoez wrote:

@Anonymous, have you considered construction?  I ask because I am close with a family which owns their own construction and building management firm and they are literally desperate to find folks who are at least handy enough with tools to pound a nail into a board with a hammer.  I am fortunate in that I work in a new and exploding industry niche and am unlikely to be out of work any time soon, but if it comes to that, I'd be happy to take a job pounding in nails and sawing lumber. 

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I have, but around here they don't pay that great (I'd make more doing what I'm doing now). 

[Horseshoez]

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@Anonymous wrote:

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@Horseshoez wrote:

@Anonymous, have you considered construction?  I ask because I am close with a family which owns their own construction and building management firm and they are literally desperate to find folks who are at least handy enough with tools to pound a nail into a board with a hammer.  I am fortunate in that I work in a new and exploding industry niche and am unlikely to be out of work any time soon, but if it comes to that, I'd be happy to take a job pounding in nails and sawing lumber. 

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I have, but around here they don't pay that great (I'd make more doing what I'm doing now). 

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Wow, either you make a lot or they don't pay diddly for construction work in your neck of the woods; around here they pay $25 and up per hour.

[mja1970]

Honestly, if things are that tight and you're trying to get your card balances down and you're teetering on BK, now is definitely not the time to be overly picky about pay.  I would take just about any job you can within reason to help keep you above water until something better comes along so as to not exacerbate the situation and get you in even deeper water with your card balances and finances in general.  This sort of thing can spiral out of control VERY quickly if you're not careful.  If your contractor work is inconsistent, replace it with something that is consistent.  Where we live, almost every business is hiring due to the huge shortage of workers.  As I'm sure you know, high credit utilization can seriously tank your credit scores, sometimes even more so than collection accounts can.  It can also put your DTI straight through the roof.  That alone will be enough to make any lender very hesistant to do business with you, because it shows that you can't manage your finances and rely WAY too heavily on your cards.  You want to keep your utilization at no more than 30%, but ideally closer to 10%.  My wife and I have always had a rule that if we can't pay it off before the next billing cycle, we do not make any large purchases with our cards.   I know it's not always fun or easy, but sometimes we have to swallow our pride and do what's necessary to make ends meet until times get easier. 

Back in 2012 when I was laid off from my really good job that I had been at for nearly 10 years as a psych nurse at a state hopsital making very close to six figures with top-notch benefits, I had to take some less than ideal jobs until I found something much better in order to help keep our bills current.  Unemployment benefits were simply not going to cut it.   I didn't have time to sit around and wait for that perfect job with a great salary to come along.   We had a mortgage, a car payment, credit cards, utility bills, etc. that still needed to be paid and I wasn't about to sit there and expect my wife to do it all on her own, so I had to eat some humble pie and took the first job offer that came my way, even though it was about half the salary of my previous job, but it sure helped get us through until I found a much better job a few months later.

I have to admit that I'm also kind of surprised to hear that construction doesn't pay well where you live.  It pays REALLY well here.  I have a friend who did it for years and made great money (close to $30/hour, if I remember correctly).  Amazon was another great suggestion.   I believe they hire remote workers for customer service and the pay is fairly decent.  Also, if you have a Target where you live, they are constantly hiring and their starting pay is almost $16/hour.  Good luck!

[jmw1]

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@Anonymous wrote:

FICO scores are hovering around the 675 range, unfortunately. BK is not an option I'm willing to consider at the moment as I am looking at positions in other states (I've interviewed and I'm waiting to hear back), and a BK will cause me issues finding a house. 

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Always finances before FICO. Just so you know, you are IMHO about 2/3 of the way there to being broke and filing BK. Making minimum payments on most of your cards is a sign you are on the edge. Once all cards are on minimums, it's BK time, you stop paying CCs, and you stop caring about FICO. If you have to tap your 401k/IRA/TSP to deal with the credit card issue and have no further employment prospects, you're a bit late in filing bankruptcy because almost all creditors in most states cannot touch your retirement funds until withdrawn including during the bankruptcy. Never pay 1 cent from retirement to pay down credit cards.  Only pay the IRS, alimony, and child support from retirement because they won't go away in BK for the most part.

I would not be picky about the 1st job's salary. Take the job, tell them you'll stay forever with fingers crossed behind your back, and start looking for a better paying job immediately. Nobody offers a non-at-will employment contract anymore so you shouldn't be tied down to stop looking when you hold a job with crap pay. You will be more attractive to employers while you have a career job in hand vs. side gigs. 

If you end up filing bankruptcy someday, you can get a manually underwritten FHA loan 2 years after a 7. Chapter 13 you can buy a house 1 year into the repayment but you will need gifted funds for a down payment because the trustee will take your non-retirement down payment piggy bank. Pretty tough to buy a house in a 13 for the 3-5 year repayment plus the time needed to save a down payment. 

If you can find some good paying side gigs and do the debt snowball, that would help a lot. 

Good luck.

[Horseshoez]

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@jmw1 wrote:

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Chapter 13 you can buy a house 1 year into the repayment but you will need gifted funds for a down payment because the trustee will take your non-retirement down payment piggy bank. Pretty tough to buy a house in a 13 for the 3-5 year repayment plus the time needed to save a down payment. 

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You said a mouthful, at the time of my Chapter 13 was discharge in March 2020 I had basically $1,000 in cash on hand; since then my wife and I have been living as if I'm still in the 5-year payment plan (meaning we've been living in austerity mode for basically the last 8 years).  Instead of paying the Trustee I've been paying my savings accounts and have already stacked up enough for 10% down on a nice house, and should easily hit the 20% mark prior to this time next year.