Credit Card Debt/Problems paying bills
 

Has anyone dealt with this? How? Any advice you can give me? I am usually great about these things, but it seems like this last year, I just keep falling behind. In jobs, money, I was even late on a credit card payment!! Now, instead of the 20 minimum payment, I am at 300 minimum payment. I am not sure what to do here. I am focusing on my credit cards because they are not the same every month and can eventually go away

I have three cards right now, Sears, Amex, MC. I was thinking of putting the sears balance on the Amex because that is the lowest interest of all the cards. I only pay about 30 bucks a month on the sears, though. Not sure if it is worth it.

Any advice, pointers would be faboo. Thanks. :(

You could try a credit card counseling company, but do research to make sure they are on the up and up. They can't always help, but if they can you can roll it into one monthly payment with lowered interest; the company works out a deal with your creditors. The creditors would rather have some of your money than none of your money, which is why they will work with the credit counselors as a preventative measure against bankruptcy.

Anything to reduce the interest is worth it. What you need to be doing is aiming for more than the minimum payment and stop spending. Obviously. (sorry) It's hard to give specific, non-trite advice without knowing the specifics. And I have to admit to never having been in that position. 300 minimum is a heck of a lot, though. If you're honest with yourself, can you recover from this situation with careful planning, or is continuing to pay the minimum just putting off the inevitable? Can you sit down with your banker, arrange a lower-interest loan to consolidate all these debts and work out a plan where you can actually pay it off and pay your current living costs without running up new debts? Or will this just trash what remaining credit record you have?

Shawnee - I looked into that today and got some info from the FTC about it. There is a company that seems legit, but I was hoping to be able to do it on my own because my luck, I would get a shady company.

I know I need to stop spending, but when you are left with .71 cents in the bank account and need to go to work, but have no gas, what to do?

Maybe I can contact the credit card I am in good standing with and see if they can lower the monthly payment. I know if I ask the other card, it won't happen because i was late just a couple months ago.

I was also thinking of getting the equity on my car to help. It will only make a small dent, but it should lower the monthly payments of the big interest card and also re-finance the car loan to a lower monthly payment. I am waiting to get information from them on this.

Just to give an idea - here is my total debt - 31853.67 as of this second.

We did a debt management program, and though it took 5 yrs, it really felt good when the last payment was made. We mananged to buy a car during this time, so apparently it doesn't trash your credit THAT badly. Just make sure that you can get interest rate reductions. One of our creditors wouldn't reduce interest. 5 yrs was certainly better than the 30-40 yrs they say you would pay for when paying only minimum payments!

What does this include? I guessing not a mortgage? How much is car, how much credit cards?

I think you really need to find a program to help you consolidate, negotiate with your creditors and work out a manageable plan.

binky - 5 years, I can take. Do you remember the company you used?
Thanks

Actually, that is just the credit card total amounts. No other bills are included

So not the total debt. You're already winning on the first step -being honest with yourself about the depth of the problem, and the second -seeking help. Keep up this momentum and you'll be fine. But do find a program, contact your creditors and seek to reduce your debt/interest to a level you can realistically pay off. And stop spending.

Good Luck.

Thanks monster.

I was thinking of using these people to find someone
http://www.nfcc.org/

1) You can try a credit counseling service. The best is a non-profit one, like the ones the YMCA (YWCA?) has. They will counsel you for free, and then if you sign up with them, they take a small percentage.

2) alternatively, you can do it yourself, using a financial plan found in books. One to try is Dave Ramsey. His scheme is kind of the opposite of most people's, in terms of which credit card to pay off, but I like the entire plan he has. One caveat--he's very "Christian" -- but I manage to ignore that. If you don't want to go with him, go pick out a book by another financial guru. Just pick one plan and stick with it.

www.profina.org. And if times get tight you can shift a payment date or even skip one if you call the creditors yourself

Thanks, binky. I have actually done that with a couple of bills this month. They were really nice because I am only going to be only 2 days late for either payment

1) Get rid of the cards. If a $300 min is rough, a $400 one will be impossible. Don't just promise yourself not to use them, cut them up and throw them away.

2) Make a budget. Be honest and realistic about what you spend your money on. How much goes for lunches out, magazines, impulse buys, drinks with friends, luxury items like fancy shampoo's, high end hosiery, Starbucks coffee, etc? What can you do without? Give yourself an allowance and stick to it. Figure out how much you can manage to pay towards the credit cards - over the min - per month.

3) Start a tiny savings account. Even $10 a paycheck adds up in the long run. $10 could by your weekly lunch with co-workers...but add it up and you have $40 a month or $480 a year...which is your cushion instead of the credit cards.

4) Find a credit counselor who can help you consolidate the bills and get a payment plan worked out. But this won't help if you don't make lifestyle changes to prevent it from happening again.

Good luck...!

These are all great suggestions, thank you. But as I noted above, I have NO money left in my account after I pay my bills. This month it is .71 cents and I had to move 2 bills to my next paycheck. So at this time, I can't just stop using the cards. I have no other way to pay for anything. NONE. I have 3 dollars in my savings account. This is my biggest problem. There is no spending money so everything has to go on the cards.

This is why I asked for opinions on refinancing my car loan and getting the equity from that to start living without credit cards.

Total debt = $31853.67. At $300 a month without any interest accruing would take you almost 9 years to pay off and thats at $300 a month. You have been either living way above your means or ??? You gotta not only look at how to pay this off, but also how you got here. Be honest and learn from it. I did it - you can too.
The "credit company" that I used was really bad so I won't advise you to that end, but you can talk directly with the credit card companies to reduce/forgo or eliminate penalties and/or fees. You may want to conider a buyout on them as well. This will negatively affect your credit though. I wish you well.

Thanks classicman. I know exactly how I got here.

1. living above my means
2. having to pay for my own insurance at about 400/month
3. being late for a payment, thus quadrupling my monthly payment.

I have been in debt close to this before, but fixed it by putting my cards in the freezer and using only cash or my debit card. Paid one credit card off and started focusing on my other one. Then, an unauthorized purchase was made with my debit card and I got scared and things whirled out of control. As soon as I get his under control. my cards are staying in my freezer!! For big purchases ONLY!

And the 300 is for one credit card, the total I pay a month for credit cards is about 650.

then you need to increase your income and/or reduce expenses. It's a pretty simple equation, really, but hard to implement.

:eek: :headshake

thats almost my mortgage payment

it's like going on a diet ---

this means things like; selling all your junk; getting a new job, better paying, or a second job; start a shoestring business to make extra cash; stopping your phone service and getting a cheap pre-paid card; doing without paid entertainment for a while; switch from fast internet to slow dialup; reducing your food budget for a while, etc.

Sucks, I know, but these can be all temporary measures.

Cloud is right - ya gotta just bite the bullet on everything and anything you can or HE can till its done. Didn't you say that "he" had credit issues too?

he is no longer here. this is just me dealing with this. I am writing an email to my consulting company right now to tell them that I am looking for a new job since they misled me about the benefits that they offer. I also saw one or two night jobs that I could take up.

I don't have cable, don't have internet, have the cell phone to save money on long-distance to PA both on my side and the family's side, have the landline because I have run into situations where people WILL NOT accept a cell phone. I haven't bought groceries in about a week (only spent about 60-70 bucks) and probably won't need to for another week or so except for milk and veggies. I barely use my heat in my apartment. I don't eat out, I don't go out anymore. I didn't even go out for NYE!

If that damn insurance payment would get lower or I hadn't forgotten to mail that check, I wouldn't be in this mess. I would still have the debt, but I wouldn't be struggling to make all the payments like I am!

I will take all the suggestions and let you know how it goes. Thanks everyone for the help.

Lose the car

Can't get to work without it. Public Transportation here SUCKS

bugger

I don't want to sound harsh, but any chance you can walk or bike to work? Biking up to 5 miles or so is much easier than you might expect. You can get decent old 10 speeds on craig's list for $100 bucks.

Yea, when I first got the car, I actually put less than 3000 miles on it in the first year or so because I rode the buses all the time.

glatt - I would consider it, but I actually work over 30 miles from home......mostly highway driving, too. These people don't like bikers....or walkers for that matter!

bbro - like I said - been there done that. It is a very hard lesson to learn. Consider the possibility of the buyout option - you may be better off. Take a look with a real professional fiinancial advisor, not a two-bit operation. Good Luck

Can you move nearer work?

Resigned the lease two months ago. And I heard they spank you if you leave early.

I will figure it out. I have to.....what other choice do I have, right? :neutral:

How about you change the car? if the"equity" is enough to make a refi worth while, it's surely enough to buy a runaround for which you won't need to make payments. this will likely reduce your motor insurance premiums too.

I'm with monster. Sell the car and use whatever is left over to buy a cheap little car or maybe even a scooter? And put the rest on your debts. Then as they say, you just have to bite the bullet. Live lean for a while. 2 minute noodles are nice and cheap. ;)

To answer one of your first questions, I've been where you are, although not $30k worth. I had about $20k CC debt which I paid off over a period of about 4 years. You can do it if you really try hard, and in the long run it'll be better for you if you don't have to go down any of those paths which will affect your credit rating.

I don't know if it's the same here as it is over there, but often time if you can't pay your debts, you can come to an arrangement with the CC company to pay out a certain percentage of the debt. If you're a good negotiator you might get it as low as 30% of the total once it's been sold to the collection agency, which happens after you tell the bank you can't pay. That will still give you a mark on your credit rating, but not a bad one.

You're only in your 20's aren't you bbro? You'll be able to recover from this.

Thats pretty much what I was thinkin too, Ali. I still say talk to a real pro and see what they can do for you. Maybe even a bankruptcy attorney!?

Lots of good advice here. The other benefit of getting a second job is that you'll have little time to spend money. Work out a bare bones budget that is doable and buckle down. Good luck!

bbro: you haven't mentioned how much you make annually.

When I had debt problems (almost done with them now), I got a new job. Now I'm a trucker. Perhaps you should go for a better-paying job, focus on paying off your revolving debt (bad interest there) and living more within your means.

My company is always hiring...

How you deal with debt is going to depend on what you're willing to do and sacrifice to get there. The suggestion to sell the car and buy cheaper, but adequate transportation is a very good one. I wasn't willing to make this particular concession, and lived with a $300 car payment for a couple of years. I just finished paying off the car.

I would absolutely suggest that you get Dave Ramsey's book, The Total Money Makeover. I have been using his program for the last couple years, and have only 1/3 of my original debt level remaining. I haven't been as aggressive about the Debt Snowball as I should be, but IT WORKS. You pay as much as you can to the card with the lowest amount owing, and minimum to everything else. When that card is paid off, you add the amount you were paying to the minimum of the next higher card.

I shifted some of my debt around to lower rate cards as well. I did NOT open any new accounts, I just used balance transfer deals on cards I already had, and I did the math to make sure the balance transfer fees didn't exceed the amount of money I expected to save because of the lower percentage rates.

You also need to stop buying stuff on cards. Completely. (this is one of the places that I'm not so good at, but I have taken the tactic of using one of the paid-off cards and paying the full outstanding balance every month. Not perfect, but it's at least workable for me.

You need to keep a spreadsheet showing your progress, and keep it posted somewhere that you can see it every day. Know what you're working for and how much progress you're making. It starts slowly, but like the Snowball it's named after, it moves faster and faster.

The first step seems really hard ... it's save $1,000. You'll end up scrimping and crying and being annoyed with yourself, but it's easier than you think at this point.

The system is about changing habits.

Thanks for all the info wolf. I am making some progress. I have taken the first steps to getting more money in my pocket so that I can start doing those things. I like the idea of a progress sheet, too. I could put it on my freezer where my cards are going, so every time I go for it, I know why I can't.

I have applied for a couple of part-time jobs, talked to my consulting company about getting more money a month. They told me to figure out what I need to stay with this job. Now, I just have to figure out how to do that with all the taxes and stuff.

I'll keep you updated.

sounds great!

Well, some maybe good news. The increase in pay is most likely. Let me see if I can get this right. The guy (M.C)that I contact at the consulting company said that the woman (S.C) that contacts the company I work for (E.C) had already talked to my boss about an increase, but didn't give a figure. M.C said that S.C said that E.C is open to the idea of paying me more. When I told M.C the figure I need, he said that it shouldn't be a problem at all.

I also called my credit union to see about a personal loan. That way, I figure I can at least pay off one credit card and pay them back over a longer time with a lower interest rate (fingers crossed) and smaller monthly payment.

With both of these things, if they work out how I hope, I will have enough money to pay bills, hide my cards, and still be able to live.

I even have an option of carpooling with someone at work. We would drive alternate weeks to save money.

Keep your fingers crossed!:fingerx:

My sister was in the same boat a few months ago. She is slowly making her way out - but one reason is because she got a raise at work.
Try refinancing the car to a lower rate.
Also try to consolidate to one card and/or one consumer loan. One 'trick' (that is not highly recommended and can backfire) is to hop from one low interest/no interest card to the next. Many offer no interest for a year on transfers. Not having interest will lower the monthly payment, allowing more money for the 'today' expenses. But many cards that entice you with a "no interest balance transfer" will have a high interest on new purchases, after a very short period. One method is to get 2 new cards - one w/ a 0% interest rate on transfers. Only use that for the balance transfers. Then get a second card with a low interest on new purchases, so if you need it, you use that one. *** If you do this repetitively, it will lower your credit score. This is not a long term solution **** Also read the fine print... some cards offering the balance transfer at 0% will slide in that if you don't have the transfer paid off in xx time, an exorbinate interest rate will be prorated back to day 1. Ouch. Or it will be if you are late on one payment, an exorbinate interest rate kicks in...

Good luck!

Good luck with that, keep to the plan to pay off rather than to spend with the extra.

If you can go with that option (several years ago I had approached my bank to try to consolidate and they wouldn't issue a loan for the amount I needed, just some miniscule amount that did me no good), ONLY do so if you are able to at least double the amount of the payment they are asking for. You'll do yourself a huge favor.

If you have to hide the cards, you're not learning anything. Think about this.

Only workable if your gasoline costs are very high. If you're keeping the car, you still have to insure and maintain it, even if you're not driving it as far. How old is the car, is it paid off, what are your fuel and maintenance costs?

you betcha.

OK - update. I was denied for my personal loan because of the ratio between debt and limit. BUT I got a raise effective MONDAY!! That's right, my consulting company got be a $3.25/ hour raise!! I am so happy I could shit. I also was informed that my contract is extended through the end of June!!

Oh god, I am so lucky. I am so excited. No more worries. Now, I can just sit back and pay my bills and not worry about where the money is. Good-bye credit cards, hello cash!!

Thanks for all the crossed fingers! Now I actually will have enough money to live on without using cards. Now I can actually get my credit card balances down!!

OK - sorry I am rambling, but it's like this boulder has just been lifted from my shoulders :jig: I kind of feel like this: :shocking:

Awesome!

A word of advice: don't fall into the trap of thinking you are wealthy now. You still need to squeeze every last penny until these debts are paid. It would be horrible to get even deeper into debt because you got a raise and started spending like you are Daddy Warbucks.

True dat! Breathing room is great... if not mistaken for all outdoors.
You can get out from under, forever, bbro. You go girl!

I went through his book 4 times, and I agree with him being overly Christian/Preachy, but I too can look past it because his advice is very sound, intelligent, and practical. It simply works.

I like it because he is very clear about everything. He doesn't leave you wondering. There's nothing vague. He states step-by-step exactly how to get out of debt and to become financially independent.

I've started listening to his podcasts and I enjoy them. It's a shame he's on the same station as idiots like Michael Savage or Sean Hannity.

Since this old thread was brought to the surface again, how goes the credit card project? Seeing the light of day yet?

Preface: Didn't read the thread at all.

http://www.violentacres.com/archives...astic-measures

It was going well, but then I got hit with medical bills and am barely making enough to pay everything. After this month, I should be ok again, starting back to where I left off. Definitely will not be going homeless to pay off the debt, though, Stress Puppy

Well bbro, you've got a plan and your head on straight. That's why you can survive being hit with things like medical bills, and still make it. :thumb2:

Thanks Bruce. Remind me of that when I start to panic!

I think there are credit card consolidation companies but maybe that is what people mean by credit counseling.

I am begining to read Suzie Orman myself. She's a financial expert. I am sure her advice would be the same as what you already know though. I think she has got some sound reasoning regarding finances so maybe it can help.

If you replace "expert" with "hack" you'll be a lot closer to the truth.

lookout, that was my impression.

While there are a number of the big names out there I disagree with on certain issues and still more I despise for their charlatan vibe... she is the worst. i've seen her give blatantly false information on her shows. I've seen her lie in interviews. She has made a fortune telling others how to handle their money for retirement and yet she readily admits that she doesn't understand the market well enough to put her own money in it. a few years ago she had a net worth of $25MM. Less than $1MM of that was in the market and the majority of the rest was in real estate. hmmmm.

i wouldn't give you $.02 for all the wisdom in her skull and her integrity is worth less than a homeless man's toenail clippings.

i really don't like her.

It was alot to digest but I couldn't get past your wording of 'CHARLATAN VIBE' I can't stand a cheap charlatan either. It just brought up the frustration of this new age ass wipe I gave a second chance to several months ago. I don't dispise people for their beliefs if they are sincere but when people speak this 'way' yet in reality it only serves as a vehicle for taking advantage of every person they come into contact and use this fake package or wrapping which might for a time not reveal the baser nature of gross a opportunistic heart. It is sickening when it does eventually become apparent.


So I do understand your revulsion.

I'd have never figured that out, coach.