In debt $17k... HELP! Can't BT

Discussion in 'Credit Talk' started by MDesigner, Jun 7, 2004.

  1. MDesigner

    MDesigner New Member

    I'm neck-deep in debt. How it happened: foolish early days when I first got a job. Also, I was laid off and unemployed for a year, and that really screwed me up..using credit was almost a requirement. Please, no lectures, I know I messed up, I don't use the cards anymore, unless I am 100% sure I can pay off what I purchased when the next statement comes in. OK, here's my damage (get ready for this):

    discover #1: $5598.14 ($6000 limit) [min $112] APR 15.99%
    discover #2: $4366.29 ($5000 limit) [min $88] BT APR 0% until Nov 04 then BT 19.99%
    AMEX: $7992 ($7500 limit) ($29/mo over-limit fee being incurred) [min $194] APR 23.99% (default due to over-limit, will return to 12.99% once I go back down to $7500)

    Wow.. sucks to see it all totalled up like that. $17k?! It feels like an impossibility for me to get out of this. OK, other relevent info: I'm 29 yrs old, have a fairly decent salary (between $50k/yr and $60k/yr). No crazy expenses really.. rent is $900/mo, but I live w/ my gf so we split that & utilities. My cell phone bill is $70 or so per month, but it's my only phone and I use it a lot. My car payment was $375/mo, but I was able to refinance it and extend the term a bit, now it's $265/mo.. that got me a bit of breathing room. I have a side job, doing web sites.. that income varies depending on how much work I do per month. Last month I raked in $380, which went to my ING 2% savings account which is solely for my girlfriend's engagement ring. I think it's got $1400 in there right now ($200-$400 more and I can probably buy the just the setting). I have a Bank One checking account, no savings account, and a 401(k) which I only started recently, which has about $1200 in it. Yeah I know, shame on me for starting so late... *sigh*

    Now here's the catch: I'm screwed. I can't open any new accounts, my credit is too flawed. So there goes using 0% BT rates! I've already been doing that in the past. Now the best I can do is like a $2000 credit limit.. IF I'm lucky. I need some serious help. Like..majorly serious help. I'm THIS close to declaring bankruptcy. Why not? My credit is already crappy as it is. And I'll only have to wait 7 years for it to clear up, right? My girlfriend insists that I NOT declare bankruptcy, but I'm totally desperate. People always wonder why I'm so cheap w/ my money.. some people have an idea of what I make so they think I should be able to afford certain things, but they don't understand that I have bills out the a**. $394/mo in credit card payments, $265/mo for my car, $450/rent, that right there is a crapload... I've not even mentioned groceries, gasoline (around $2.10/gal around here), and other stuff. I hate to cut back my leisure.. I mean, a person has to LIVE. I'm definitely not out buying DVDs left and right, or anything like that. We go to the movies sometimes, I try to rent DVDs from the library ($1) as opposed to Blockbuster ($4).. we don't eat out too often.

    I've been paying the minimums on my cards for months now, I know that's bad. Any savings or leftover money goes to my ING. I'd like to somehow balance that out.. and put some money towards my debt, but also some money towards my ING, so my gf doesn't get screwed over (we've been dating a loong time..so time is kinda of the essence here--further delay and this relationship will be put at risk).

    Anyway.. HEEEEELP. My debt is my #1 stress point, and it's driving me nuts.. and now that I gathered up my balances & APRs, I'm feeling depressed and anxious. I'd appreciate any help/advice anyone here has to offer.
     
  2. drumik

    drumik Member

    Welcome to the club

    I had the same problem over 2 years ago:
    35g, 6 credit cards; 1 student loan;1 installement loan
    average interest was 20%
    I decided to go with Consolidation program and that what killed my credit history.
    You gotta decide what do you want to do
    Keep paying arround 300$ per mount for 5 years or declare the bankrupcy

    You can try to consolidate your cards by your self
    Simple call them and explain them your situation
    They will close you account and you will join payment program

    Good Luck

    Now 10g 7% apr
    I was stupid I better off to go with bankrupcy
     
  3. Hedwig

    Hedwig Well-Known Member

    First of all, you need to quit putting the money into the account for the ring for a while. In fact, take enough out to get that Amex down to under the limit. That will save you not only the $29 overlimit fee, but will cut the interest as well, so you'll pay it down faster.

    I know you might think that you need to save for a ring. But let me tell you this--I've been there. If she doesn't understand, then she may well not be the right girl for you. Settle for a smaller ring to start. You can buy her a nicer one later, for an anniversary, when you're both in better shape because your debts are under control.

    I wouldn't declare BK if I were you. Instead, take EVERY extra penny you make and put it on your debts, not toward the ring. You'll get your credit under control and then you may be able to get a decent loan to buy the ring. Pay the highest interest rate first, with every extra penny you can squeeze. Then take the amount you were paying on that card, when it's paid, and add it to the extra and put that whole amount on the next highest interest card.

    Make yourself a spreadsheet and track how much your balance drops each month.

    I paid off $77K of debt after a divorce without declaring BK, and at the time I didn't make any more than you are. If you search for my posts, you'll find several times that I've told my story.
     
  4. Hedwig

    Hedwig Well-Known Member

    By the way, I have a modest sapphire ring with two small diamonds on the side instead of a diamond engagement ring. And when I look at it, I can feel good because I know that the man who is now my husband knew that it was better to give me a little help in paying my bills than to buy a huge ring. He keeps promising that he'll get me a bigger ring, and I keep telling him that we have much better things to do with our money.
     
  5. Mirage

    Mirage Well-Known Member

    Have you pull reports and scores lately?

    I suggest you pull from MyFico.com and see how bad it is. (Use discount codes)

    If there is a clean report among the three, there are some cc issuers that will issue decent limits and APRs.

    I agree the ring fund has got to be put on hold. If you can get the Amex account under control that will save a few bucks.

    Can you borrow from a friend or family member? A short term loan might help with the Discover card that will hit the 20% range soon.

    Worse comes to worse, you may have to sell you auto. I know it's going to be rough but the bk thing is not all it's cracked up to be.

    A bk will hurt your chances of a decent mortgage depsite the fact that it will only remain on your report either 7 or 10 years. The bk will always be listed as a public record somewhere.

    Also a furture job may require a credit pull and a bk may lessen your chances.

    No further use of cc, start to pay cash or a debit card.

    Also, see if Bank One will do a signature loan. I doubt it as Bank One is tight but worth it if you find a good understanding loan officer. Or even a loan with your local credit union.

    But all this does not matter if you cannot increase your cash flow. You have to expand your income base. Second job? Extra work? A raise?

    I vote for a second job. Do whatever it takes, think outside your industry. Swallow your pride, for it's well worth it when the debts are paid off. If it means delivering take-out, so be it. With cash tips, it can make a huge difference.

    By all means remember this is not the end of the world. It's money and credit. If you have your health and are able to work your situation can be overcome.

    You have a full life ahead of you with what appears to be with someone who cares about you.

    Best regards,
    Mirage
     
  6. fxs158

    fxs158 Well-Known Member

    Mdesigner,

    I do not think that I can be much help but I am triying to understand your situation. You have shown us roughly 1109.00 in bills per month. NOt counting essentials like auto insurance, gorceries and little spending money.

    But anyway, if you make 50k per year that amounts to $4166.00 per month, taking the goverment 30 percent that leaves you with $2917.00 I am not a rocket scientist but it looks to me like your problem is not the credit card debt but rather managing your cash.

    If you know how much I pay out every month and how little is left over from my wife and my income you would crap your pants.

    Not triying to put you down but just going by what you told us, you shold have left over every month close to $1500 after groceries there should not be a reason to be at the verge of bankrupcy.
     
  7. LD

    LD Well-Known Member

    I agree with Hedwig...that your GF might not be the one if she doesn't understand that you have to get your debts under control before you can buy her a ring. Life partnerships (marriage or otherwise) is about what's best for you as a couple. At this juncture, its about getting a handle on your finances so that one day the two of you can buy a house, take a nice vacation once in a while and have a comfortable retirement. The big picture is what is important.

    Being in debt and trying to get a handle on it is alot like trying to lose weight - it didn't happen overnight and it's not going to go away overnight either. Discipline and consistency are the key.

    Good luck to you!

    Lisa
     
  8. tr1252

    tr1252 Well-Known Member

    This is a great thread with a lesson for many of us. MDesigner, read up on all of the newbie stuff here, but especially read up on the pros and cons of filing bk. I think that you wouldn't qualify for anything but a 5-year ch13, given your situation. It simply isn't worth it for all of the damage you would do to the rest of your credit picture.

    With a 50k income and 17k in cc debt, your situation is really not all that bad. While 17k in cc debt is a little high, I've heard REAL horror stories (like 100k in cc debt!). True, it's not going to work itself out overnight, but it WILL work out with some buckling down.

    The ring thing is a given - don't even THINK about it right now. And it's really nothing more than a head trip on either YOUR part or your GF's part. Don't be suckered in by those ads from the diamond companies saying that an engagement ring should equal two month's salary (a really big WTF here!!!). How about going into your new marriage DEBT-FREE??? It CAN be done!

    Also, you might want to look at your 401k plan, maybe put in a little less while you pay down your debt, then increase your contributions in another year or two. Good luck!
     
  9. Hedwig

    Hedwig Well-Known Member

    What about your girlfriend? As others have said, this is about your future as a couple. It would benefit her to help you pay debts. If she doesn't have extra income, maybe she could get a second job as well. AND--EVERY extra dollar goes to debt. Or, does she have good credit? Have her get accounts to BT or a credit union loan to pay the credit cards off or down. You could make the payments, they'd be less than you're paying now.

    If you're talking marriage seriously, this is one of the things that needs to be addressed. My husband helped me out with a few hundred a month before we got married, and he was able to help me get the subprime mortgage I got forced into. But he was there with me, every step of the way, and now we can enjoy life together.
     
  10. clc

    clc Well-Known Member

    I have to agree with some of the above posters. It seems to me that you and your future fiancee need to be a team. fsx pointed out quite articulately your cash flow net-net given what you said your annual salary is seems to indicate there is something you're not telling us. Plus you did not mention your significant other's income and what she contributes besides half the rent. With two incomes and no big responsibilities like children and ex-spouses then 15K worth of debt should be manageable.

    As for the engagement ring...the #1 reason for divorce in this country is major disagreements over marital finances. It certainly would be a somewhat telling indicator if you're in over your head financially yet you are saving to buy a "rock" for your GF.

    I am considered a "pro-bk" poster by others on this thread but in your case I doubt if I could advocate it. Your balance sheet seems to indicate you have cash flow to pay more than the minimums. It is none of my business but if you want help you would really need to articulate exactly where your cash flow is going besides what you have already explained.

    There are many experienced and informed consumers on this board. We have all had to deal with debt and consumer credit reports so you have come to the right place. BUT it can be a double-edged sword as we can also spot discrepancies fairly quickly and accurately. So welcome to the board. If there are details we have overlooked please inform us so we might be able to help you. Please do not think we are a judgmental group....just a group with "inquiring minds."

    clc
     
  11. jenz

    jenz Well-Known Member

    ok - can't help but jump in. forget the ring, cell phone and living in general. live on ramen noodles and water if need be.

    on the other hand, you do kind of make me feel better...my husband (who i am seperated with) cleaned me out of my savings of $35k and behind in bills by about $1200. i will be caught up in a few months (made payment arrangements on everything). the only thing i splurge on right now is my internet and cable which will be changing...after i pay bills and childcare i bring in $500 per month and i have two kids. if i can live on next to nothing, you certainly can.

    seriously look over your budget and see what you can cut - what is more important to you, extras or paying off deb?
     
  12. sam

    sam Well-Known Member

    tis simple mate, make more money or quite living that lifestyle.

    truth hurts, but it is the only solution.

    If you must spend so much on your gf to keep her happy she is not the one. She should love you being broke eating ramen, and watching TV over the bunny ears.

    if she can't do that, bro lose the ho ;) (j/k).

    Seriously, divert all money to credit cards and suck up, hussle on ebay sell off all the junk you dont need, do more web work, work 24/7 if you got to.

    Bro, that girl is not thinking bout now, she's thinking about wedding, honeymoon, (diamong ring?), house, kids.

    What are your long term plans? How is all of that going to fit in. You may not be thinking bout it, but theres gonna be a day when the above objects fall into place, and let me tell you, they fall fast into place.

    Whats your GF kicking in for rent? 50%?

    perhaps you got space for a roomate who has a job and pays the bills? That might be an option for a year or so to get your credit more in line.

    Throw every cent at the payments bro, and don't charge any more, cut the cards up.

    Thats a good salary, you sound like a good person, but the same trap alot of people get into and i guarantee you it will haunt you forever if you can't get control of it now.
     
  13. Mongrol

    Mongrol Well-Known Member

    My 2 cents

    I was in your situation about 8 months ago... cept I owe about 80 grand (mostly school loans)

    This is what you need to do...

    Get excel or borrow it.

    Type in your NET salary in the top
    Type in All your bills below including movie money, eating out, cigs ect...

    Make columns with the days of the month and put your payment in the date due...

    make sure that you put in the same column at the top when you get paid...

    arrange your bill payment days to optimize left over money (if its due on the 25 and you get paid on the 30th, pay it the previous pay period.)

    ALL extra money should be applied to high interest debt... You did it to yourself, now you don't get the pleasure of any extras. This mean NO LIFE, No cable, No take out, No dinners out, No driving around for fun ect...
    Cancel ALL extra's.

    In about 6 months which is how long it took me, you should be back on your feet. I now have cash in the bank... everything is on time ect... It is a WORLD of relief to not have to live paycheck to paycheck...

    Good luck...

    Here is my debt (three CRA's from PG)


    Real Estate Accounts:
    Count: 0 0 0
    Balance ($): $0 $0 $0
    Current: 0 0 0
    Delinquent: 0 0 0
    Other: 0 0 0

    Revolving Accounts:
    Count: 8 7 7
    Balance ($): $1,963 $1,963 $1,919
    Current: 8 7 7
    Delinquent: 0 0 0
    Other: 0 0 0

    Installment Accounts:
    Count: 19 19 23
    Balance ($): $80,370 $80,426 $80,370
    Current: 19 19 7
    Delinquent: 0 0 0
    Other: 0 0 16

    Other Accounts:
    Count: 5 0 0
    Balance ($): $1,635 $0 $0
    Current: 4 0 0
    Delinquent: 0 0 0
    Other: 1 0 0

    Collection Accounts:
    Count: 0 0 1
    Balance ($): $0 $0 $1,677
    Current: 0 0 0
    Delinquent: 0 0 1
    Other: 0 0 0

    Total Accounts:
    Count: 32 26 31
    Balance ($): $83,968 $82,389 $83,966
    Current: 31 26 14
    Delinquent: 0 0 1
    Other: 1 0 16

    Accounts Summary:
    Open Accounts: 17 12 12
    Closed Accounts: 15 14 19
    Public Records: 0 0 0
    Inquiries (Prev 6 Months): 7 21 5
     

Share This Page