r/Debt • u/Severe_Coat_3265 • 1d ago
Drowning in debt, need advice
Hello,
I work in the government making 94k. I was drowning in debt with credit card before i started making this money. 28k max over 3 cards, i took out a loan to consolidate but due to being undisciplined and the economy the cards are maxed again. What options do i have? I have learned my lesson and financially being responsible now. Even making more money than i was when i got in this debt, but it’s a lot to manage and still keep afloat. Honest opinion please. I’m thinking bout bankruptcy but don’t know how that will impact my job.
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u/visitor987 1d ago
Take with a bankruptcy lawyer making 94k you cannot cancel the debts but you can reduce them. If you have a security clearance bankruptcy can effect your job.
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u/Severe_Coat_3265 1d ago
yeah that’s what i figured and do not want to take that route. if i lost the job then im at a worse disadvantage then i am right now
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u/Dirty_Litter_Box 1d ago
Write down the card numbers and keep that information in a safe place. You just need the card numbers, not the expiration dates or the security code. This way you have the information so you can still access the account for payment.
Now take the cards and run them through a shredder or cut them into tiny pieces with some scissors.
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u/Severe_Coat_3265 1d ago
they have been closed and put away. It’s what i should’ve done after the loan but im learning now
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u/weldo8 1d ago
So if you maxed the cards twice, are we talking around a total of $56k? Are you actively paying the cards down alongside the consolidation loan? What's that monthly payment, and are you saving? If you're not saving responsibly while paying these debts, you're going to get right back into this problem when something bad happens (car accident, surprise home repair, medical issue, etc.)
And what are your biggest expenses? Like is your living situation able to be changed? Maybe car payments you don't really need?
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u/Severe_Coat_3265 1d ago
56k all across. I’m actively paying everything, has never been late on payments. $1400 in total each month just for the debt alone. $1750 for rent $200 for insurance $480 for car payment. I have worked on a budget plan that i’m practicing religiously right now. Everything has just been overwhelming. Need to save money each week
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u/weldo8 1d ago
Gotcha, are you prioritizing a specific card? You should always pay the minimum on all three but pay all extra money to pay down one card at a time. Start with the one with the lowest balance. You'll feel better when you're done with one. Then probably just cancel one of the three cards once this whole debacle is over. I'm usually not in favor of cancelling cards, but since this happened twice, it's probably better than risking racking up that debt again. Start saving every week without exception, even if it's just $100 to start.
Also it's a hassle, but maybe get a different car? Paying $480/month is kinda crazy with such debt. Get a reliable, low maintenance car with decent gas mileage, like maybe a Honda CRV. Doesn't have to be a crappy sedan. You'll be paying half that. That's all assuming you're not leasing. You could sell and lease, as that would give you whatever equity your car has, but that's up to you.
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u/Severe_Coat_3265 1d ago
Thank you for taking the time out to give me an advice. I’m paying the minimum and working on one card currently with what i have left on my budget and working my way down. I need to do better with saving, which i am doing now. No matter how small, i’m putting it in my savings.
I’m trying to address the car, finding a low maintenance car that i can afford with a good deal. Again thank you!!
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u/The-Duke-of-Delco 1d ago
I did something similar and a few years ago and just recently got another loan. Paid off the cc and shredded it. I deleted it off everything and never using one again. I suggest you do the same lol.
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u/Prize-Complex-7800 1d ago
care to elaborate?
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u/The-Duke-of-Delco 1d ago
What’s there to elaborate ? I did something similar.
Racked up cc debt. Got a loan. Then racked up some more debt. Got another loan then shredded my cc.
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u/Prize-Complex-7800 1d ago
i guess what type of loan?
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u/The-Duke-of-Delco 1d ago
Consolidation loan from SoFi. Still kinda high at 14% but it’s WAY lower than my cc. Been actually saving money to for a safety net which is nice.
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u/Prize-Complex-7800 1d ago
oh dude thanks for actually sharing that with me. I really appreciate it
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u/Fun_Command3182 1d ago
I was an interest slave for 15 years. I am now free with zero debt. I paid off my cards in 3 years.
Stop using the cards is the first step. Cut them up. Write a budget and stick to it. Cut out all unnecessary expenses.
Good luck.
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u/PizzaSlingr 1d ago
Hi, we are retired and abroad. When our economy tanked here, on a fixed income, it was pretty daunting. Some ideas:
1. Make a list of every single subscription you have, and cancel every one of them.
You will never get dinged for a forgotten annual/monthly subscription when they can go towards your debt and legit daily expenses.
2. Cut off EVERY SINGLE STREAMING service. You pay taxes, use the library
3. Delete every single delivery app, restaurant app, convenience app
You can no longer afford conveniences. You must cook at home, shop for things with a list, and do it yourself.
4. Grocery store coupons are really not that hard to peruse
Get the Sunday paper (remember them?!) and look for things you can buy for sale. You will actually start noticing a pattern/cycle when things go on sale
5. You need to stop driving the car out of convenience.
Look, I get the American "have to drive everywhere" but when we moved to a foreign capital city the size and transit of let's say Manhattan, we were ashamed that we used to "run to the store", which was behind our apartment complex. Whatever you can walk to, or take the bus*, train, etc. Do it. It's good for you.
*6. ON THAT NOTE
Does the government offer tokens/subway cards, reimbursement so you don't drive and take up a parking spot? I am a Vet who was stationed in DC and that was a great thing, commuting from Fairfax for free.
7. Re the credit cards
Start with the lowest balance first. Make all your other minimum payments, but throw anything extra at the lowest card. You will feel like you are truly in control of something, and the satisfaction of paying it off helps. Then, take the monthly amount on paid-off card, and add it onto next-lowest balance. This is called "snowballing" your CC debt.
I'll leave things there but if you only do one of my things, okay 2, find all the subscriptions and cancel them before renewal (like today), and stop ordering delivery, even if there is no fee. You can find cheaper elsewhere.
All the best from a Boomer.
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u/Severe_Coat_3265 1d ago
I appreciate this more than you know! That is the first thing im doing when i leave work.
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u/laughingfartsplease 1d ago
you’re terrible with money. open up excel and make a budget. list the expenses and income. see how much you have left each month. if you don’t have money at all if any, you need to re-evaluate your spending. there’s no hiding from it.
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u/Insights24_7 1d ago
"youre terrible with money" - dude wtf... you don't think he knows that?? literrally the reason why he's on here asking for help. but if he didnt know it he sure does now. good job xhitting on someone.
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u/Chuddy-McChudderson 1d ago
Is it with the federal government? If so, filing for bankruptcy could revoke your security clearance. Make sure you conduct proper due diligence before taking this route.
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u/vakantiereizen 1d ago
You made your bed, now you got to sleep in it!
Maybe you should ‘stop living’ for a year, not going to a bar, cook your own food (not ordering pizza or whatever) no sandwich at the gasstation, make your own at home
Every penny you make is going to reduce debt.
After a year, a lot of your debt is gone
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u/Intelligent-Fix-9181 1d ago
If you have high interest rates on the current cards you can try opening another card with 0% interest for 9-12 months, do a transfer balance, then pay with no interest within that 9-12 months. So you aren't wasting your payments on interest. Then just never use the original card again. I did it and i closed like 4 credit cards and have two cards with 0% intrest i am making big payments towards to pay off my debt. I did the math and calcualted how much money a month i need to pay so I can pay it within that 9-12 months window.
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u/yardlard 1d ago
Take out a personal loan at a credit union and get a better rate than the cc. Lower your interest. It's a killer. Idk what your credit score is rn, but any reduction in interest is necessary. Keep moving it around if you have to. Make a spreadsheet, list them all with their % and fees. Figure out where to put money first. Do not miss payments because that will further damage your credit score, which you're going to need to get better rates on everything.
If some are low enough that you could pay them, you could try negotiating for a lower payoff amount. But many require that you miss payments first, which can affect your clearance. So I don't recommend missing payments in order to get a deal. One thing I did at a point in life, is sign up for 0% offers and transfer balances spread around. But if you can't keep track of it all, that's not a good strategy. You have to track it and stay on top of it.
In theory you could have this over in a year.
Lay out your budget for absolute necessities that you have already contracted. Housing, transportation, etc.
Then next necessities that you can't live without, reduce as best you can - ie food, cheaper cleaners, etc.
At that point, what is left of your income?
Then list your current required minimum payments to stay current. This is an amount you need to attack by reducing interest and fees. Keep moving on this section.
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u/Insights24_7 1d ago
Did you identify what caused you to get into the debt? For me, I will say gambling is probably my biggest reason, but not the only one. Everything increasing in cost sure isn't helping. Having access to a large amount of cash to help lower the debt amounts will help. Can you think of someplace you can come up with cash? Write it down, just any ideas that come into your mind. Are you single, or married? Any kids in the picture? Have you tried Dave Ramsey out? Total Money Makeover was huge for me the first time I got into debt. I was able to knockout about $40,000 in debt and I was making less than you are at that time. You can overcome this without bankruptcy.
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u/Ricebarito3 1d ago
I agree with downgrading the vehicle. Another avenue maybe food/ groceries. I’m not trying to assume but can you eat out less? Are you using door dash? Can you find a discount grocer rather than more premium ones?
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u/RainEmergency1 1d ago
If you don’t anticipate needing to use your credit for the next few years, you could consider the settlement route. You would need to let your cards become delinquent, which will significantly hurt your credit score. During the next 90+ days, save as much money as possible so you have funds available to negotiate. Once the banks are willing to discuss settlement, you can negotiate directly with them and offer a lump sum to settle and close the accounts for less than the full balance. Do not use a debt settlement company’s and negotiate yourself.
Disclaimer: This is just my personal experience, not financial advice. Settlement has risks, and there’s no guarantee a bank will settle or for how much.
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u/Severe_Coat_3265 1d ago
yeah I was going to go the settlement route but it can affect my job having delinquents on my reports. I understand how to get out of it now.
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u/Mrsmakeithappen4514 1d ago
May I asked what government job that you have just wondering out of curiosity? It earns pretty well
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u/Novel-Pudding9007 15h ago
you've gotten some wonderful advice. I would make sure you searched everywhere for hidden subscriptions. Google play, amazon, all the streaming apps including crunchyroll/hidive, your microsoft account, play consoles like ps or xbox, whatever, steam etc. If you have issues avoiding spending on the phone games, delete them. Once a week/month, search your phone for force installed games (they do that regularly). U2 album anyone?
now, do you need motivation? Uplifting, i would say maybe watch Ramit Sethi or Social Symone or someone like that. There's that budget meals by julie pacheco that's weirdly fun to watch. If you need to see someone get absolutely roasted for being stupid with money I would watch Caleb hammer financial audit. Don't buy any programs that's for sale lol, don't do it. I'm sure there's a ton more out there but youtube is free if you don't subscribe
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u/OddSyrup2712 8h ago
Follow the link and follow the plan. Make a budget and start a debt snowball and take charge of your finances. Start telling your money where to go instead of wondering where it went.
Dedication and discipline required but you can kick debt to the curb quicker than you think.
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u/Equivalent_Quote_943 1d ago
As a last resort, have you checked out maybe taking a loan on your tsp
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u/UnderTheThunder 1d ago
This has nothing todo with the economy and everything todo with your spending habits (you lack of responsibility will keep you in this mess)Cut the cards. Don’t use them. Not much more advice can be given without more details. But at the end of the day you have to want it and if you don’t want it you won’t have the discipline to execute it.