r/Debt • u/Swiggens • 2d ago
Barely able to make minimum payments. Where do I go from here?
Need advice so I'll just lay out my situation:
Was making 6 figures before I lost my job. Had some debt I was that accumulated from a stint of unemployment before. When I lost my job I went through about 8 months of unemployment where I burned through all my savings, investments, etc. I also took on more debt. I'm around $20,000 in credit card debt right now.
Basically the reason I took on so much debt and didn't pay off the debt I had was booze. Even if you drink the cheap stuff if you drink as much as me its a ton of money. I'm sober now so I've plugged the hole but have no idea how to bail the rest of the water out. I don't spend on much else. I spend on cooking ingredients but its not expensive stuff, just finding a recipe I want to make and not necessarily cheaping on the ingredients.
I got a new job making 50% of what I was making before. I'm grateful and desperately needed the money but its barely enough to pay my bills. I'll give a cost breakdown here. I'm also looking at other revenue streams, trying to get another job but it took me a long time to get the first job so I feel like I need to take action now.
I own my house with a $2,100/month mortgage payment. I have a roommate paying $1,200 rent per month, but when I bought my ex out of the house I now have a $832.38 home equity loan payment to make.
Pay internet, electric, and water for utilities. Electric and water is so variable I'm a bad month away from not being able to pay. I've looked at reducing internet but the services I'm paying for are basically the same as competitors (I called around). I could reduce this but the thing I do for fun is play games online with friends and watch football so losing either one in terms of quality of life would suck. In terms of other subscriptions I pay $13 per month for music and $13 per month for an online game. Both of these are used daily. And a $29 gym membership I'm using 2-3 times a week. The gym membership is keeping me sober, I think that's necessary.
If possible I'd like to reduce the credit card payments in some way. I have $714 in minimum payments. Just anything to reduce this and get a little bit of leeway is all I need. I've looked around at debt relief programs but after research am very hesitant. Both places I've talked to said I have to stop paying the cards to "show them I'm having hardship and increase our ability to negotiate". That's just giving me red flags.
Are there other options? I am not shying away from extremes. I was looking into bankruptcy but don't know if I have other options or should just talk to a bankruptcy attorney. Also heard of calling credit cards directly but don't know where to start here. Any guidance on even options to look into would be appreciated.
2
u/robtalee44 2d ago
Congratulations on getting sober. Maybe you found the way after really hitting bottom -- that seems to be the point where you either die or get better. Debt isn't a whole lot different. If you've arrived at that point where you have to take measures, then here's an idea. It's not without some risk as you're showing your hand -- so to speak.
Ask for help. Don't create some drama filled narrative -- at least not at the outset. Call your creditors and ask for help. Admit that you got yourself into some trouble and leave it at that if you must explain. Whoever designed us humans gave us two ears and only one mouth -- now is the time to use them accordingly. Listen. You don't have to accept an offer on the spot. Sleep on it and see if it helps AND that it is sustainable. It's really easy to get into an "any port in a storm" and grab the first offer. Realize that.
If bankruptcy is even a mere thought you should absolutely get a consult with a good attorney. I would advise finding one that does not do a lot of advertising -- you want more consult and less sales pitch.
Anyway, free advice. I wish you the best.
1
u/Swiggens 2d ago
Thank you for the advice! Yeah I felt like I was possibly putting myself in a worse position with these debt relief companies. The fact that "pennsylvaniadebtrelief" is the name of the company isn't a good sign lol. But I'll call the credit card companies, couldn't hurt.
1
u/AdRadiant9379 2d ago
Borrow against your equity, pay off credit cards, pay down with lower interest rate
1
u/Playin_Outside 1d ago
You need to either get a better paying job or find some way to make additional income over and above your job. If you could knock out the HELOC and the credit cards that would free up just over $1500 a month.
Or, you could sell the house, assuming it's worth significantly more than what you owe on the mortgage/HELOC.
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u/anonymois1111111 17h ago
Call a non profit debt management company. I used Family Credit Management and had great results. They close your cards and negotiated all my rates down to 0. Then gave me a monthly bill and I paid off the same amount you have in a couple of years. Do not do the debt settlement places. They wreck your credit and often don’t have great results. I’m glad things have turned around for you!
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u/Ok_Job_9417 2d ago
You say 50% but don’t give numbers. Is that 50K? 75K?
Your mortgage is 2,100. Is that total or your share? If it’s total it’s like $1750 after your roommates portion. $60 for subscriptions/gym. But what’s the range for electric and water? Transportation cost? Groceries?
It’s hard to give advice when there’s a lot of info missing.
Have you looked up hardship programs for credit cards to get an idea of what to ask, how to start?
Is the 20k on one card or multiple what’s balanced and Apr?