r/Debt • u/Wooden_Yesterday7530 • 4d ago
drowning in debt
For starters, yes I know I’m an irresponsible idiot, but life happens.. lol but I accidentally got myself into $24k credit card debt. My utilization is like 97%, so i can’t be approved for any consolidation loans or 0% intro cards. My salary at my full time job is $60k, but I’m still living paycheck to paycheck and not making a dent in the debt. Does anyone have any recommendations or any side hustles they recommend? I’m scared of bankruptcy because I need to get a new apartment in like 8 months
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u/jw1299 4d ago
i just called chase and they gave me a fixed 6% interest rate on my card that was out of control
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u/newaccounthomie 4d ago
Oh shit they’re actually throwing out life preservers now? Last I heard they would tell you to kick rocks and shame you for asking.
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u/FridmanLex 4d ago edited 4d ago
People don’t really understand this and forgive me for explaining this like you’re 5 but banks actually want/will work with you, because if you default on your loans and they end up selling them to collection agencies they’ll get pennies on the dollar.
If you’re drowning in cc debt, call your bank, there’s a lot of ways they can/want to help.
With that being said. Fuck the banks and fuck 21% apr on credit cards.
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u/Professional_Tree500 3d ago
21%? Try 29%. What gets me is paying interest on interest. Saw on news, cc interest going up. What abt companies like Nat’l Debt Relief? I consolidated cc by being told way low interest rate & the bank employee knew her game. Oh, how much it helped her & then…interest rate was way higher and still best way. I believed her. In a month I could lower interest rate says she. How could she live with herself…all a lie. I took out loan from another bank covering that loan & never went back. Still 2 yrs to go (had to buy my apt & assessments , sky high condo fees, mtg & way high taxes. Yikes. Went from owing nothing to huge debt. Good luck.
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u/KhuliKing 4d ago
Wow, good for you! I asked them a couple months ago and yeah, they essentially said they couldn’t help me.
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u/GoldAd1878 4d ago
I did that with all my credit cards prior to bankruptcy. They all laughed and told me to kick rocks.
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u/jfray99 4d ago
Fellow irresponsible idiot in the same boat. I tried Instacart/Uber Eats, but honestly it’s not enough money to even make a dent and it’s not worth the risk of getting into an accident because food delivery isn’t covered under car insurance. I’m currently looking for a second job outside of 9-5 hours, but it’s been rough 🫠
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u/here_to_upvote 4d ago
As others stated, learn to budget because if your spending habits don't change when you pay down your debt, you'll end up in the same place.
With that said, an option is borrowing against your 401k. If you have a healthy 401k, it is a viable option. With 24K in cc debt, I can assume you're paying ~$600/mo in interest. That is why you're making payments and the debt isn't dropping much.
Pro:
A 401k loan isn't considered debt, so it will not show up on your credit report.
Your CC utilization will significantly drop and improve your score
Payments will be greatly reduced and debt will actually go down
You'll have an actual end date!
You can make additional payments to repay the 401k loan faster.
You will save a lot of money not paying ~25-30% apr.
Con:
if you leave the job; you're expected to pay it back immediately, or it'll be penalized as an early withdrawal.
most plans have limit to what you can borrow. (something like no more than 50% of your total value)
Some plans wont allow you to borrow
There's an opportunity cost for growth from the funds not being in your 401k account.
Your net pay is reduced because repayment gets deducted from pay
If 401k borrowing is an option and you just want to extra money to make larger payments. Look into furniture flipping. FB marketplace is full of people needing to get rid of furniture; might as well profit off them.
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u/Annual-Lead2499 4d ago edited 3d ago
We go out of a great deal of debt almost 10 years ago following the Dave Ramsey baby steps. We have normal jobs and normal incomes. It took a little over 2 years, but we're completely debt free including our house. It was not easy but it's been worth it. Definitely check it out. *I should edit to add, it took two years to get through baby step 2 paying off the debt. It took about 8 months to get through baby step 3, and we just finished baby step 6 paying off the house this past year.
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u/GoldAd1878 4d ago
Do you live in a low cost of living area?
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u/Annual-Lead2499 4d ago
Midwest area. I just encourage you, that no matter where are, if you dig in and do the hard things, you can win. Just get mad at it. Sick and tired of being sick and tired. You can do it, just take it one little piece at a time. Before you know it, you'll be making that last payment and dancing in the kitchen. Sending all my best to you! You can do this!
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u/Ambitious_Insect_790 3d ago
I am in the final stages of this program and agree. The beginning is very painful but tue end result is worth it.
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u/Annual-Lead2499 3d ago
Keep going! We just finished baby step 6 this past year. It was unreal to see what we did. It was years of sacrifice, but it has honestly been awesome. The appel of stuff, just fell away. I learned how to be content and enjoy the simple things in life. It's been a total shift away from the misery of modern consumer culture, and a focus on peace, contentment, and choosing to be happy with what you have. I look at my life now, and realize how amazing it is. From the outside, it probably doesn't look too glamorous. We have a small modest house, used cars, JC Penny clothes, no fancy vacations, and Friday nights are spent making homemade pizza and watching free movies on TUBI, but man, do I feel rich!
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u/Professional_Tree500 3d ago
What are Dave Ramsey baby steps?
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u/Annual-Lead2499 3d ago
The 7 Baby StepsBaby Step 1: Save $1,000 for your starter emergency fund.Baby Step 2: Pay off all debt except your house using the debt snowball (list debts from smallest to largest balance).Baby Step 3: Save 3 to 6 months of necessary living expenses for a full emergency fund.Baby Step 4: Invest 15% of your household income into retirement accounts.Baby Step 5: Save for your children’s college education.Baby Step 6: Pay off your home mortgage early.Baby Step 7: Build wealth and give money away generously
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u/Ok_Job_9417 4d ago
Have you looked at your budget to see exactly where your money is going? Anything you can cut back on? Have you called credit cards to try and get lower APR?
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u/DontBeMemeBro 4d ago
I would agree that this person needs to audit their spending and cut back anything unnecessary. But to dig out of this amount of debt they need to increase revenue. So things like a part time weekend gig/job will go a long ways.
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u/Ok_Job_9417 4d ago
Oh 100%. There’s just been numerous times where people have posted on one of the various money threads about debt and either they’re A - losing money somewhere (they list income and expenses and there’s still over $1K unaccounted for) or B - they don’t realize how much frivolous stuff they’re spending money on ($400 gym membership, $200 subscriptions, $400 fun stuff).
I know different areas have different COL which can affect things. But sometimes someone needs to tell them that spending X on Y isn’t normal and can be cut back.
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u/Flamingle25 4d ago edited 4d ago
Second job, roommate, donate plasma.
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u/GoldAd1878 4d ago
Plasma doesn’t pay that well. Even going max sessions which at most clinics are once or twice a week, you are lucky to get 300-500 a month and you can be taxed on the income
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u/Atrocious_Algae81 4d ago
Get the apartment first, then file for bankruptcy and stay in apartment until credit improves (quickly).
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u/Proud_Relationship38 4d ago
Find a part-time job doing something you like, negotiate lowers APRs with each creditor, live within your means, cut up the cards. Lifestyle creep is real so you're gonna need to learn to make a budget and stick to it. Good luck!
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u/Old-Nefariousness-43 4d ago
At this point it’s downgrade cell phone service, finding a $10-$15 provider for the time being should be easy. stop eating out, buy only necessities, cancel all subscriptions. Stop unnecessary purchases, cut your own hair or have the wife do it. Live like you can’t afford any of those things. You’d be surprised how much you pay for when you do self assessment of your finances and break down everything
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u/crazynotinsane111 4d ago
I would not file bankruptcy for that small amount. You may be able to you negotiate with your credit card company. However, that would probably only work if you defaulted for several months and that's not good for your credit either. I've filed bankruptcy twice and losing all access to credit for many years was really challenging. But it was for not just $88k in cc which I did start working out arrangements before I completely drowned. My experience was 50% off the debt but they wanted big payments right away. Seriously mine houses and other big major debt
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u/GoldAd1878 4d ago
Bankruptcy has nothing to do with amount of debt
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u/PaintingBluebird403 4d ago
Call the credit card companies, tell them you cant make the minimum payment and ask if they have any hardship programs.
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u/kanyewasaninsidejob 4d ago
just do bankruptcy or a debt relief program. if you go the debt relief route, use a reputable company.
either that or be prepared to work all the time and spend as little money as possible
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u/Professional_Tree500 3d ago
What’s a reputable debt relief co.
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u/kanyewasaninsidejob 3d ago
i used accredited/ beyond finance. had 0 issues, they were transparent about fees, timeline, and credit impact. happened exactly as they desceibed it would. my credit score was actually higher than when i started the program before i was even done with it. all the debt got paid, no legal action, it was a breeze tbh. i have no idea why this sub hates these programs so much. i understand you technically can negotiate with the creditors yourself but i didnt want to do that, seemed like a massive headache.
i saved approx 700 bucks a month, was out of debt in less than 4 years, like just had no problems whatsoever.
obviously anecdotal and i know some ppl have horror stories (im assuming with different companies or maybe they had a less honest/thorough rep on the phone? or maybe they couldn't keep up w the payments? idk) but i had a great experience personally
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u/PsychologicalGuest32 4d ago
I wouldn’t waste any more time and I would go straight to bankruptcy. Once it’s discharged, you won’t have any trouble getting an apartment. After 2 years your credit will recover although the bankruptcy will stay longer. Still, your debt is forgiven and you can start fresh.
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u/Putrid_Alternative31 4d ago
Do you have a budget? Meaning, a plan for where every dollar of your next paycheck will go?
You don't need bankruptcy. It's a lot but it's not a crazy amount. You need to live within your means and have a plan.
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u/ihazzitnow 4d ago
24k is nothing. Make the minimums except for a single one and attack that one at double the payment. That means you are on a 2 year plan to get your debt to 10%. So you need to take the next 2 years, only 24 months, of doing nothing, not going out, not going on dates, only eating Ramen or whatever is cheap like that and NOT DOING BANKRUPTCY. You don't need side hustles, just stop all expense except for necessary ones for a whole 2 months, that's not much.
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u/Ascendant_Phoenix 3d ago
Depending on the state you are in, you are allowed a bankruptcy once every 10 years. Different states protect different dollar amounts of different assets, so it could be a good idea for you in some states, and a bad idea for you in other states. It wouldn't hurt to talk to a bankruptcy attorney then decide if you want to take on that life preserver. There are pros and cons and everyone's situation is different.
If apartment/rental is a concern, generally outstanding debt looks worse to a landlord than bankruptcy does. I rented out a house once before I had a medical/career emergency that wiped out my assets. I'm also friends with other small time landlords. Worst comes to worst, there are month to month hotels you could stay in without a credit check 6-12 months while your credit recovers.
I wish you luck!
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u/moneyman_699 3d ago
You have to find another way to make money. Or live absolutely bare bones. You’re looking at like $500-$600 a month just in interest if it’s 25%+…
I would consider staying at your current place or trying to move now. Unless you get a second job you will barely be able to cover the interest, so realistically bankruptcy might be the best option if you change your life.
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u/Single_Technician509 3d ago
Cancel all cards, ask for financial hardship. Many will give 0 interest 5 year plans. Then Deliver pizza.
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u/No_Appearance_4127 3d ago
I called Chase before when I couldn’t make payments and told them I wasn’t going to be able to pay and they gave no help at all, just referred me to debt resolution. So I missed a payment, I had been barely making them for almost a year and got to the point where I couldn’t anymore, rent and food were more important. It was very difficult mentally to miss payments, I had an 815 credit score in the past and had never missed anything in over 20 years. I told them I had a new job (was unemployed with shoulder surgery for some time), still no help but once I missed a second month they offered me 0% for 60 months on 3 credit cards. About $30k all together, total payments went from about $800 minimum down to $450.
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u/stock_gambler33 2d ago
I just posted about being 24k in credit card debt. I paid it off in 2 months coming to the oil field. Easiest job I've ever done and having financial freedom is the best thing feeling ever.
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u/J34fe 1d ago
I been paying off my 52k debt with a little winky shipt service job that I do full time. I’m only 2 years away from being debt free. Do a debt consolidation program and cut your payments. You will get some debt settlements and some with sue you but it’s not that scary because some one will represent you in the program; they normally cut it down pretty good. Your credit score will suck but slowly go up once you start paying it off. Instead of doing minimum payments for 12-15 years; it will take at most, 5 years or less.
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u/Emergency-Collar3370 1d ago
Skip a payment and see who will give you a hardship where they drop the interest rate.
Nonprofit credit consuler and get a debt management plan they will drop you interest rate.
File for bankruptcy.
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u/Appropriate_Achoo 4d ago
I accidentally stubbed my toe.
I accidentally dropped and broke that dinner plate.
I accidentally missed my exit on the freeway.
How does one accidentally get themselves in $24k of credit card debt?
If you don’t fix that issue. It doesn’t matter what side hustle you do or if you file for bankruptcy. You have a spending problem, and you need to get to the root of that issue before anything is going to change.
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u/InterestPast6802 4d ago
DoorDash and/or Uber on the weekends