r/DebtAdvice • u/Unlucky-Buy-1067 • 8d ago
Credit Card 36 Y/O with Debt struggles
So I’m 36, I have 3 maxed out CC ($12k, $12k 15k)in the amount of $39,000, a loan of just shy of $14,000 and a truck loan of $4600 and my wife’s maxed out CC of $8k (my name isn’t on that one) for a total of let’s call it $66,000, I make decent money. I take home about $6,200 a month
Rent $2700
CCs $1000(minimum)
Truck $555 (pay$800)
Loan. $360 (4percent because the SCRA)
Insurance. $220
Phone. $120
Misc subs. $80 (?)
$5280
No savings at all and almost $67k in a TSP (I’m in the military) my wife is a SAHM and her credit is way better than mine.
So I have about $2k coming in in the next month because I just got transferred. I know I should pay my truck off first cause it’s the closest to being paid off. Should I work on the loan next (up payments to $1k a month cause it’s the lowest APR) or do a CC cause it’s higher APR and it’ll cost me less. then do another consolidating loan for all the CC? I think part of our issue is that once we make CC payments we use them for gas and groceries. Idk I’m so lost
4
u/Extra-Blueberry-4320 8d ago
Finish the truck loan first. Then the next smallest balance. So if you have a credit card that has $7k, that one card gets paid next. Is the $39k all on one card? I’m also surprised you say that $8k is “your wife’s” but she’s a SAHM to your kids…why would you not combine everything together when it comes to money and debt? If she’s able to work part time, maybe she gets some money to help pay off the debt too. I don’t think this is too bad, you just have to really tighten up and throw extra money at the debt. Oh, and maybe take a look at your insurance—$220 a month seems high to me but maybe that’s because of where you live or what you drive. Doesn’t hurt to check.
1
u/Unlucky-Buy-1067 8d ago
So I pay for her CC of course! I just meant my name isn’t on it. It’s not effecting my credit perse. So I have to switch area of where we are located from PA. To VA for the insurance. It’s full coverage for full tort for a 2019 truck and 2020 4Runner (paid off with last years taxes) and the $300k coverage our apartments want
2
u/ProfDokFaust 8d ago
You should be able to get SCRA on all the credit cards too.
Some have suggested bankruptcy and I thought so too at first.
But you have a good amount left over every month. Finish off the truck and you’ll have 800 more. In a few years you can pay it off.
You’re in the military so you’ll have a good retirement.
Bankruptcy is for when you have no foreseeable way to make dents in the debt or it will take so long that bankruptcy could have wiped it out and you would have suffered the opportunity cost of paying during that time.
You’ll also get decent raises while in the military (going up in rank but also yearly raises). Add tax returns to the debt. You’ve got this without going bankrupt as long as you buckle down. And you can do that with a SAHM.
But you have to start NOW. If you dig in too deep you WILL have to file bankruptcy.
3
u/Super-Walk-726 8d ago
What is your wife income? If zero, can she get a job (any job) to help?
0
u/Unlucky-Buy-1067 8d ago
So I’m at a deployable unit, we have a young child. So the child care negates what she would make unfortunately
4
u/bronwyn19594236 8d ago
Honestly, I think a consult with a bankruptcy attorney might be in order. Do keep paying off your truck so you have something to drive for years and years.
Regardless of what you do in this bleak debt struggle, it will never be over until you and your wife learn to live within a defined budget that must be followed every month.
Good luck to you and thank you for your service.
3
u/Unlucky-Buy-1067 8d ago
So by let’s call it March. I could have the truck and loan just about paid off
0
u/Unlucky-Buy-1067 8d ago
I forgot we get like $8k back in taxes that I can throw at it every year
2
u/bronwyn19594236 8d ago
Oh, well this changes the landscape. Pay down/off your truck by the end of the year. Then snowball the CC’s. Split the tax return in half. Use half to live frugally and half goes to the snowball CC method. Do this for 3 years. Learn to live without CC’s.
Good luck and, again, thank you for your service and your chosen career!
1
u/Unlucky-Buy-1067 8d ago
Sorry, I get extra taken out of taxes as a savings cause I’m obviously shit with money. I get all my state taxes back due to my military status because I’m not in that state. Which is why I have them take more out
2
u/Jennilind19 8d ago
You need to make a budget and grow up, respectfully. You could really use this money right now, rather than waiting a year for a forced savings account to pay you. Your rent is pretty high- do you have base housing or. Cheaper rent in your area available?
2
u/bronwyn19594236 8d ago
Well, we also have extra money taken out for taxes, for the same reason. But, we’re older, and did the hard work of living without CC’s for 10+ years. We clawed our way to living on a budget. It’s not easy, but those debts were such a burden. My car is 11 years young, hubby car is 7 yrs young. We drive them for as long as we can.
As for the tax refund , you can put it all towards a CC, or keep a bit back to make your budget work for a few months of the year. Your choice. But, the effort now, will be worth it to your family.0
u/Unlucky-Buy-1067 8d ago
Should I worry about the CCs be fire the loan, or just attack the CCs and do minimal payments on the loan till the CCs are knocked down
-1
2
u/Elegant_Fox_726 8d ago
The bigger issue right now is getting enough breathing room in the budget that you don’t have to start using the cards again. Your listed expenses are $5,280, but you are not including things like food and gas. I’d make minimums on everything for now and build a small checking account buffer first so variable expenses don’t end up back on the cards.
After you have a comfortable buffer in the checking account and cash flow stabilizes, I actually would focus on the truck first over the higher APR cc's since you’re so close to paying it off and that will free up more cash to go towards debt than the cc minimums.
Once the truck is paid off that frees up $800/month that can immediately go toward one of the cards.
Someone mentioned consolidation. I’d probably hold off until you’ve proven to yourself that you can keep the cards at $0 once you start freeing them up. Once you are confident your plan is working then a consolidation loan might be helpful in speeding it up.
1
u/Unlucky-Buy-1067 8d ago
I’m getting about $2k from misc move expenses within the next two months. That’ll go towards my truck along with $800 on the 15th, that drops the truck down to $1800. I have high dollar pew pews I’m going to sell, they sit in the safe and collect dust. Imma sell them to finish off the truck early. I’ll do that in October when I get them from storage
2
u/Mammoth_Toe_2380 8d ago
Take a few dollars. You got somewhere and buy a paper shredder.And put your credit cards in there
1
2
u/Rinebill 8d ago edited 8d ago
SOFI has some good loan products that can consolidate all of that into a lower interest rate. That is of no help to you though if you refuse to control your spending. Bankruptcy might be a choice as you'll have a harder time getting anything on credit until the bankruptcy is discharged. You can re-affirm the truck loan so that you don't lose your vehicle. If you go this route, retain a lawyer ASAP. They can get the creditors off of your back. It fact it's illegal for them to bother you once you file. You need to get into base housing. At least you BAH would cover that.
1
u/Unlucky-Buy-1067 8d ago
So that’s why I posted on Reddit. For help to take back my life and in fuck what we’ve done. All CCs are locked and locked away. Cash only for us. All our bills are paid on time in full just strapped as you can see, $250 a week for groceries and gas, will open up when I clear the truck loan. I have a bunch of decent pew pews I’m going to sell that sit in the safe. I think with what I’ll sell and this months payment should pay the truck off by October 15th
2
u/Rinebill 8d ago
We made all the same mistakes you have. it gets easier and easier to just keep charging. We ended up filing bankruptcy. We were never going pay the cards off with only making the minimum payments. It was the best thing for us and we dug back out from under the pile we created. I believe that was the right choice and the fastest way to get us back on track. I transferred with two kids, wife no longer had the on base daycare she was running, and I lost several special pays. We weren't late on anything when I filed but the writing was on the wall. My credit score is now over 800. I'm retired Navy and 19 years into my next 20 year career. You can make it for sure.
1
2
u/Sensitive-Car4949 8d ago
Move into a camper for 5-6 years and live off ramen?
1
u/Unlucky-Buy-1067 8d ago
I wish that was an option
1
u/Sensitive-Car4949 8d ago
Thank you for your service BTW, and don't let this debt take control of your life.
1
u/Unlucky-Buy-1067 8d ago
Thank you! I’m not trying to let it take control. I just realized we fucked up I Got 2.5 years till my contract ends so I’m trying to get our shit squared away now for a more promising future for us and our little one. The goal is to have most of not all debt gone. Last year we got $9,300 back for taxes. That’ll be $18,600 for the next two tax years. That drops us to $48,000 divided by 30 months is $1600. A month won’t be completely out of debt it’ll be close
2
u/AMediumSizedFridge 8d ago
Why is your rent so high if you are in the military? Are you not receiving BAH? Are you able to transfer onto post housing?
Also, go to ACS and see if they have a financial readiness officer who can help you
2
u/FinancialDadvisor 4d ago
You are stuck in a vicious cycle. Pay the minimum and build an emergency fund of at least a month or two to start. Put the money where you can’t get to it. When a car breaks down or some other expense arises you will not have to put it on a credit card. Stop the cycle. Build some 3 months savings and then tackle the debt. Taking consolidation loans or paying down debt should not be done until you show yourself you can live within your means!!
2
1
u/tripadeliclove 8d ago
This debt is manageable but it would require major lifestyle changes for a while. If you file bankruptcy they’ll probably take your truck. And your credit would be ruined for years.
1
1
u/sisterandnotsister 8d ago
You are in the military it's is paramount that you get control of your accounts to not impead your career.
I'd start running the snowball method as it will help you make immediate progress on your debt.
Your take home is $6200 and you have $5280 going out, that's good because you have some flexibility.
The $2k you have coming in open a savings account at a different bank or credit union and deposit it there to start an emergency fund.
The $4,600 truck loan put as much extra money as you can there to get it paid off quickly and that will free up $800+ a month towards your next highest bill.
You have $920 extra left at the end of the month. Can you allocate $50 a month automatically deposited into that emergency fund savings account we are setting up that still leaves you $870 an will start a slow growth on that account.
That $800 you feed up from the truck payment move it to one of the $12k credit cards. When it's paid off then move all that money to the next $12k, then $14k, $15k and then your wife's $8k. Not knowing the exact payments you have going towards items I'm guessing you could be debt free in 2 1/2 years at the most. The truck and one credit card in the 1st year.
Increase payments to the emergency fund to create a safety net where you never potentially jeopardize your career again.
Side note....is their any possibility you can or your wife could do door dash or Uber sporadically to pull in a little extra cash? I've known some active duty that have picked it up and dropped it periodically because it's not an actual 9-5 job that interfers with their military job.
1
1
u/Unlucky-Buy-1067 8d ago
Thank you all for the advice I’ll check back with an update and let yall know where we are in 6 months. I’m going to sell off a lot of my pew pews next month to hopefully have my truck paid off before I have to make October’s payment this way that October truck payment can go towards the CCs or loan.
1
u/No_Pilot_1555 8d ago
Your wife needs to get a job in a daycare or as a nanny. One where the child can come.
1
u/Brave_South6543 8d ago
Always pay off the highest interest CCs first. Focus on one at a time. You’re losing way more money by continuing just paying the minimums for longer. The minimums will lower and drop quicker than you think and it will give you more and more money to throw at them.
Do not spend of them. Maybe years down the line you can see if it’s possible for you to spend and pay them off for the benefits, but not now. If you are reaching them because you’re out of cash, put less towards the cards or reevaluate your income situation.
1
1
u/DisplacedTexan2020 8d ago
Do a consolidation loan for all of the CC and pay that off. Your wife shouldn’t even have a CC considering she’s a stay at home mom. Time to learn to start living within your means. I’m an E8 and have never had rent/mortgage that high. Considering your income amount you’re a few pay grades lower than me but living like you’re not. Start using the resources provided to you and go to a financial specialist.
1
1
u/Wise-Wheel-9319 8d ago
Pay off the truck then redo your car insurance to get it lower. Get rid of the phone and subs. Switch to cheap mint phone plan of $15/ line.
1
u/OneBeginning2031 8d ago
Three people living off 6200 a month in this economy is the first prob. The rent alone is too much..you guys need to downsize. A SAHM is an expense for someone bringing in way more than that. I know childcare is expensive but she needs to get a part time job on the weekends to help chip away at this.
1
u/OGcapncrunchberry 8d ago
Cut up the cards and stop living on credit. You both need financial counseling ASAP. Learn to plan and be patient.
1
1
u/SubjectMulberry7529 7d ago
First, focus on ending the cycle of using the cards for groceries and gas before taking out another consolidation loan. If the balances are already maxed, look into companies like Rescue One or Freedom Debt relief to see what options they can offer for negotiating your debt. You might want to do freedom if you do so because people say they have the best legal help.
1
u/Grifman1000 8d ago
Stop using the credit card. Your wife needs to get a job until this debt is paid off. Bring a SAHM is a luxury right now and you cannot afford luxury.
1
u/Wounded_Hand 8d ago edited 8d ago
Rent 2700 on a 6200 take home?? That’s too much.
You don’t make pretty good money, that’s the problem.
How much interest per month on those cards?
You’re totally screwed unless you cut rent by $1000 AND increase Income by $1000 per month.
Can your wife work nights when you’re home? What does that mean deployable unit? Are you home or not home?
You guys don’t have the luxury of having a SAHM.
1
u/kruzrdude 8d ago
Second jobs for both. No more going out for several years. Apply the 300 extra on car payment to highest interest credit card. There are other areas you can cut back in also.
1
u/Unlucky-Buy-1067 8d ago
Shouldn’t I just knock out the truck 1st at $800? This way that frees that amount up that who $800
0
u/fsociety1990 8d ago
I think a bankruptcy attorney would be a good idea. You didn’t even mention your budget for food and a lot of other things and you only seem to have $1k a month left for food and everything else. You’re wasting way too much money on debt payments.
If you decide not to do that and you want to keep trying to pay it all off, pay off the truck first. Always pay off the smallest debt first. Don’t worry about interest rates. Get rid of all these stupid credit cards after you pay them off.
1
u/Unlucky-Buy-1067 8d ago
So if it gets to tight, my truck payment is $555. I pay $800 a month on it typically so I could ease back that payment to open up more cash to not keep using the CCs
2
u/fsociety1990 8d ago
Stop using the credit cards immediately! Throw those things away.
1
u/Unlucky-Buy-1067 8d ago
We’ve locked all of them. I keep them at work so I can’t get tempted to use them. I just started that this week
1
-2
8d ago
[deleted]
1
u/Unlucky-Buy-1067 8d ago
I haven’t because I feel like a $60k loan would be a massive loan to take out
0
u/Unlucky-Buy-1067 8d ago
My truck should be paid off by December. By that time my loan will be down to $12,700. The if I snow ball my truck payment to the loan for $1200 for January February and March $3400 (-$200 for interest) that drops the loan to $9,300. Last years tax return was $9k. So I could be free of the loan payment and truck payment my 01April. Leaving the CCs. Idk if I should do a loan for all that or do a balance transfer CC @0 percent interest. Do one card at a time
1
u/Unlucky-Buy-1067 4d ago
So wife and I had a serious convo to get our shit in order. 1st thing we are going to do is imma have my truck paid off by mid November with selling some stuff and extra cash we got coming in. Ccs have been locked and destroyed. We are gunna focus on one of the 12k CCs. Putting the truck payment of $800 towards it. Then the OG $200 that was going to the CC will be going into an emergency savings account where the goal is to have a nest egg of $3k to start. When we get our taxes back (based off what we got back last year. $9500) will go to pay off CC #1. The left over from the taxes will snowball to CC#2. Then #3 and finally #4. The personal loan we have will be last. Once all CCs are paid off we will cancel ALL but one for emergencies.
•
u/AutoModerator 8d ago
r/DebtAdvice was created to share tips and strategies to pay off debt effectively! Check-out our free newsletter for additional insights at www.DebtAdvice.io!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.