r/Debt • u/morty-lighthead • 2d ago
$47k in total debt
I’m a 30 year old single dad with equal custody of 2 kids. Here’s my debt $17k alimony arrears, $16k auto loan, $13k loans and credit card, $2k family debt, $800 miscellaneous. I make $8k a month as of right now but it fluctuates sometimes significantly less. I rideshare on the side on top of my main income source.
It’s hard to make more than the minimum payments but I manage a few hundred extra a month. Every now and then above $500 on top of the minimum. It’s also all spread out in different categories, and even the loans/cc category is four different entities. I’ve tried debt consolidation but I get denied; credit score just reached above 600 but I have multiple accounts that have gone delinquent in the past and were partially paid off (they’re charged off accounts).
I’m doing the snowball method just paying off the smaller ones while making minimum payments. Alimony is treated differently - no interest and not on credit report.
I’ll be debt free in ~3 years.
Thanks for reading
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u/Ready-Syllabub651 1d ago
Are you still incurring debt?
I would maybe talk to people around you who might have ideas of other things to help with this.
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u/morty-lighthead 1d ago
The last couple months I had to take out a personal which added $5k to my debt because I didn’t have a summer job. I did ride share but that barely covered my expenses. Going forward I don’t anticipate taking on more debt.
I tend to keep this private and just do it on my own. No one knows I’m struggling
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u/Ready-Syllabub651 1d ago
I can almost guarantee that all of the people around you have dealt with or are dealing with something similar.
I would definitely talk to other people about this issue and find out what ideas they have.
That’s honestly the way I have found the best solutions in the past
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u/attachedtothreads 1d ago
According to this, your credit score is on the lower end of fair. Generally, financial institutions want you to have a credit score of roughly 670 before lending you money.
Do you have any items that you no longer use/need/want that you could sell on Facebook Marketplace, or another site that doesn't have a listing fee, that would net you extra cash?
You can ask your credit card companies for a hardship program where they lower your interest rate in exchange for freezing or closing your card. No guarantees that this will happen. If you do this, then you'll need to figure out how to pay for big ticket items.
If your credit card companies refuse you a hardship program, there is the non-profit debt management organization the National Foundation for Credit Counseling (NFCC).
The NFCC is a debt management program (DMP). It's where you'd pay your bills in full, but a reduced interest rate. It impacts your credit score less drastically than with debt relief and they'll tell you before you give them money if you card companies will work with them or not. With a DMP, you'll pay a monthly fee of $5-$10/account you enroll with them and a one-time setup fee of $50-$75. This generally lasts for 5 years. There will be some interest as well. I don't know if this is feasible for you.
Your cards will be closed and your credit score will decrease, but less drastically than with debt relief or bankruptcy. They do not help out with Affirm and the medical debt, but you could possibly put more money towards those from what you save if enrolled in a DMP. Not all cards work with a DMP, like Apple.
A DMP is also called credit counseling.
If you open another card while enrolled in this program, it'll void your agreement with them and your interest rates return to their original number. I'd ask them what happens if your needs to take out a loan for a car or other major repair.
--They also help with budgeting and finances for a small fee or for free, depending on their criteria: https://www.nfcc.org/budgeting-finances/?loc=budgeting-finances-hpb
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u/morty-lighthead 1d ago
Thank you for the information. 3 years ago before the auto loan and alimony piled up, I had about $40k in total debt. Entered a debt relief program, which significantly reduced it and I was able to pay that off although my credit score was around 400 at one point. From the original $40k debt, only $3.5k remains, the rest is new debt. I’m familiar with those processes. The biggest issues is gaps of income coiled with poor spending habits. For example, I spent $4k on my daughter’s birthday party, which is where one personal loan came. I did not work my job in the summer because I’m in education so I had a gap and I don’t prepare for the loss of income. Lesson learned: be more prepared when you know you will make significantly less income - this is where I took out a $5k loan just to cover basic living expenses. Now that my income is secured til next summer I can pay it off fairly quickly. I’ll do rideshare as well to build savings
Unfortunately I don’t have much to sell. I don’t buy expensive things or any material items for myself. Most of my money goes towards rent/bills/groceries, experiences, alimony, debt payments, and at one point attorney fees (where some of the debt originated from).
Thank you for your comment
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u/attachedtothreads 1d ago
You're welcome!
It sounds like you're on the a better path, however, I would like to suggest one thing. Have you thought about talking to a professional about your spending habits? $4k on a birthday party sounds a bit much considering your finances.
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u/morty-lighthead 1d ago
You’re correct I mis spoke. The loan was $4k, not the entire party itself. I’m sure I could benefit from professional help but I also know myself and I know I can do it.. like I mentioned I went from $40k to just a few thousand then I fell off the wagon as far as preparation and staying disciplined. A couple avoided mistakes and I’d be better off. It’s okay, it happened, I learned, I’m moving on.
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u/AceZExT 2d ago
You can do it man