$47828 in Credit card debt- looking for ideas

[skelly]

@resjudicata Chapter 7 or 13? I don't think I qualify for chapter 7. I live in FL @al8115

 

[resjudicata]

@skelly I don't think $50k is worth doing bankruptcy over given your income and options, and you likely won't qualify for Chapter 7. You'll be doing Chapter 13 and the courts will basically decide on a budget that you can figure out for yourself.

 

[garrusknight]

@resjudicata Dont buy a shit car though! Maybe dont have one! Yeah just don't have one that's cheap as shit! Either way you're gonna crush it, you got this!

 

[tvdocproducer]

@skelly If it were me, I would call up every single credit card company and as for a lower rate. I would also attempt to consolidate to the lowest interest or delayed interest as possible.

The other part of the equation is maxing out available income to pay down the debt. Can you get out of the car lease? If so, Consider driving a piece of junk.

Zero money should be spent on anything outside of basic living expenses and healthcare necessity. I’m talking eating nothing but eggs and rice type of thing.

Do whatever you can to earn extra $. Donate plasma, drive for door dash, get a part time job on weekends, etc.

You have to attack this now hard and fast before it compounds and gets to be a bigger hole.

 

[jamesapado]

@tvdocproducer The idea is to shut the account down for further purchases and reduce the rate, so they don't have to write off the debt. Try to get them to 10%. Some advocate not paying them for a few months first, but that's pretty high risk.

 

[bigoleboy]

@skelly You make $85k a year, this shouldn't result in a bankruptcy. Get out of your lease, use a bike or a beater car till you're consumer debt free. Pay the highest interest rate card first while still paying the minimum payments on the other cards, then once that card is at a balance of 0, do the same with the next highest interest rate car. Keep going till you're out of credit card debt.

You should be out of this debt within a year and a half.

 

[arishin]

@skelly I'm an outlier here, but I say keep the car lease because a car is a lifeline to a job, and a leased car is typically cheaper to maintain. When the lease is up, then consider lower cost used car for the next couple years.

Otherwise, a lot of people have good advice for approaches to cleaning it up in the next 3 years or so. Paying all this off will give you outstanding credit scores. BK will screw you for the next 8-10 years and limit your options for housing, employment, or other opportunities.

 

[kmr]

@arishin That is what I thought too. The car is an asset. Junk cars have unexpected costly repair which make it hard tl budget and you have great income.

I would recommend buying after the lease is up though. I just like owning my stuff.

 

[4ntioch]

@kmr It isn't an asset if you don't own it outright and even then it's a depreciating asset. You can buy cheap reliable cars with decent gas mileage and likely spend a lot less than $4800 in a year

 

[julioalmeda219]

@4ntioch This. Insurance on a older vehic is also less than on a new lease vehicle as well. If you can drive a 10yr old $10k car and save $400+ a month it is worth looking into in this case.

 

[dierato]

@julioalmeda219 Don’t forget taxes

 

[kmr]

@4ntioch In the financial world I guess you can't count it as an asset.

I was talking more in general using that word. Like the car is a highly beneficial and needed part of your life. You need it so you can reliably get to work. $4800 is a low price to pay depending on where he is in the lease. Are there 2 years left? Ride it out.

The car is newer, reliable, likely doesn't have maintenance issues, probably has good gas mileage and already has insurance and registration likely paid for. If he returned the car he would likely have to pay some penalty (I think? I've never leased) for breaking contract and then need to spend $3500 to $4800 in a lump sum to buy a beater and then put new registration and insurance on it. Plus he can expect break downs and costly repairs that might put him over $4800 for the year. And for what he makes, he can get out of debt faster keeping the current lower payment than trying to save 4800 to buy a new car.

85k a year leaves plenty to work with if you reduce other area in your budget like food or get a roommate. There are better ways to recoup that money he is spending on the car.

 

[resjudicata]

@skelly I would kill off those smaller balances (

 

[jdp8858]

@skelly You need Dave Ramsey imo. Read the book, change your life, get wealthy. It will be hard but you can do it. Totally plug in and you’ll make it through

 

[sbschristianmedia]

@skelly Try using either the Avalanche or the Snowball method to bring down your debt. There are YouTube videos that have extensive information on these two methods. Prep your own meals and refrain from going out to eat. Pause all investments including IRAs. Just invest enough of your salary to receive your company's matching contribution.

 

[moogie]

@sbschristianmedia All investments except 401k match*

 

[fahrrad]

@skelly Have you addressed why you've gotten into this situation with a therapist?

 

[holderlin]

@skelly Can you work OT? It'll help increase your take home pay to help.

 

[daveithai]

@skelly Can you get a room mate?

1. Can you give back the car and buy a beater until you are out of debt.
2. Can you get a roommate
3. Get a consolidation loan? If you can get one at 6% to 10% that saves a lot of money.
4. CUT UP THOSE CARDS.
5. MAKE A BUDGET. Stick to it.
6. PAY IN CASH, I know it sounds stupid, but when you are counting out the 20s it is much more real than when you swipe a card.

 

[canadiancora]

@skelly I just want to say there’s a lot of misinformation here about bankruptcy. It’s seriously not a 10 year scarlet letter like so many are suggesting. At 27yo, I had $25k of credit card debt on a $47k salary. I filed for ch 7. A year later, I financed a used car at only 2.5%. A year after that, I bought a house with an FHA loan (so 2 years after discharge). It’s been 9 years now and I have a 750 credit score, tons of unsecured credit, and I’m in an amazing financial place (6mo EF, never got back into credit card debt, etc). I would argue if it wasn’t for the bankruptcy, I wouldn’t be in the place that I am now.