Deep credit card debt

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Dave Ramsey. I pulled out of 80k in credit card debt in a year. It took massive austerity measures. I now have 40k in an emergency fund, index funds, 401k, IRAs, and 529. We completely turned our financial lives around and did a 180.

This is impressive. What type of austerity measures did you take? Did you have to sell your house and downsize? What about cars? Did you sell them? What kind of decisions did you have to make on a daily basis to keep going?

Not helpful. The poster had to make a lot more than 80k in a year to pay down that much in debt. Most folks in debt don’t have that luxury.

It is all relative to scale. 80k is a crap ton of credit card debt, especially if someone had to take austerity measures to get out of it.

[Anonymous]

OP you will get a lot of info on here, some conflicting, because different things work for different people. It's why there's 1001 diets out there (probably more lol).

You have job - that is awesome! You're bringing in $$! First thing you need to take a look at your expenses. Trim them right now as much as you can. You need to be into save mode for a bit here.

Extra money should go two places - savings (emergency fund) and start paying down the credit cards. If it's spread on multiple cards list them out with how much is on them, as well as the interest. In general you want to pay off the highest interest rates first.

You can do this OP! You will feel so much better when you even just make a plan. Get it all down in writing and stick to it!

[Anonymous]

I went through a debt consolidation program a few yrs ago. I did a lot of research because I was scared of being scammed. I found this nonprofit in MD and it's the best thing that happened to me. I paid off $25k in cc debt in 3 yrs on a $50k salary. Below is part of the info I dug out from a very old email. I left off the counselor's name and email bc I don't know if that person still works there. I had a great experience. You will have to close all of your credit cards except for one though. And they put you on a strict budget but it's so worth it. Good luck!
Certified Consumer Credit Counselor
15847 Crabbs Branch Way
Rockville Md 20855
Office 888-845-5669x
MoneyManagement.Org

[Anonymous]

I also recommend Dave. You don’t need to pay for his stuff, his podcasts are free. The outline is simple.
1k in emergency fund
Debt snowball
Etc etc.
I will have paid off 30k by the end of the year.

Also I don’t recommend Mint. I recommend YNAB or some other budgeting tool. If you don’t have the money do it on paper. Write your exact take home pay on the top and allocate every last penny to a task. You need to allocate EVERY dollar you make. This is will likely let you know where you can cut back, how much to the penny you can dedicate to debt per month etc.

Listening to his podcasts will motivate you. You will here from people who make very little who manage to pay off a lot of debt. How do they do it? Take 2nd jobs, side gigs, etc. they eat “beans and rice” and slash any expenses that aren’t critical. Really you can turn this around in a few years and be debt free.

[Anonymous]

File bankruptcy and start over. If your credit is already bad, you are just extending the time it will take to recover. Swallow your pride and do what is necessary to move forward.

[Anonymous]

Anonymous wrote:File bankruptcy and start over. If your credit is already bad, you are just extending the time it will take to recover. Swallow your pride and do what is necessary to move forward.

This is terrible advice.

[Anonymous]

Anonymous wrote:Op do you have a job now? That is critical.

Agree that you have to stop spending on the cards to make this work.

Then follow the Dave method. You can be debt free in 2-3 years or less if you follow those steps. Probably don’t need to spend fir financial peace university.

Get a job and even a second job, and then it’s “beans and rice, rice and beans” as he says, as you tighten your belt.

No one can do this for you op. Except you.

Rice and beans? Is a poor person not allowed a healthy good tasting meal?

[Anonymous]

Anonymous wrote:

Anonymous wrote:File bankruptcy and start over. If your credit is already bad, you are just extending the time it will take to recover. Swallow your pride and do what is necessary to move forward.

This is terrible advice.

It's literally what Dave Ramsey did! Now he tells everyone to bootstrap! I've always suspected this snake-oil salesman is only popular because he's secretly astroturfed by finance industry who don't want everyone declaring bankruptcy and wiping out their predatory debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op do you have a job now? That is critical.

Agree that you have to stop spending on the cards to make this work.

Then follow the Dave method. You can be debt free in 2-3 years or less if you follow those steps. Probably don’t need to spend fir financial peace university.

Get a job and even a second job, and then it’s “beans and rice, rice and beans” as he says, as you tighten your belt.

No one can do this for you op. Except you.

Rice and beans? Is a poor person not allowed a healthy good tasting meal?

Nope, gotta bootstrap for years to pay off the bankers who laugh at rubes for paying them a 10-30% vig and not just declaring bankruptcy.

[Anonymous]

I don't think "declaring bankruptcy" erases your debt the way people think it will, anymore.

You can't ever discharge your student loans.

If you have a decent job, you can't get a Chapter 7 bankruptcy. YOU will need a Chapter 13 bankruptcy, which means a plan to pay your debts. Chapter 13 bankruptcy might help you get some lower rates on your loans but I don't think it really wipes them out like people think it will.

[Anonymous]

What do you suggest for someone who isn’t working?

I get a fixed income that only covers all my minimum payments. Earliest I can return to work is next fall. I’m trying to come up with a budget. I’m paying some cards down but I don’t have enough to strictly use cash.

I’ve started to try and sell old clothes and things until I can get back to work.

[TwistdMike]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:File bankruptcy and start over. If your credit is already bad, you are just extending the time it will take to recover. Swallow your pride and do what is necessary to move forward.

This is terrible advice.

It's literally what Dave Ramsey did! Now he tells everyone to bootstrap! I've always suspected this snake-oil salesman is only popular because he's secretly astroturfed by finance industry who don't want everyone declaring bankruptcy and wiping out their predatory debt.

I don’t think you are truly capturing his message... very much against loans and pushes for debt free, cash only.

OP,
Because your credit score is in the dumps already... food, shelter, utilities, transportation, in that order. You are in survival mode.

To heck with the cc’s, let them send nasty letters. It’s unsecured debt. Wait them out and then settle on nickels to dollars. Same with the collections.

Take care of your primary needs and sock away some cash for future settlements with cc’s and collectors, but 1st get you an emergency fund established.

If you’re paying a huge car debt, get rid of it and get a “beater” till you’re back on you’re feet.

Start listening to Uncle Dave’s podcasts.

Good luck! You can do it!

[Anonymous]

Dave's fortunes changed when HE personally wiped the slate clean with bankruptcy. Now he advices everyone to avoid bankruptcy because it's biblical to square your debts? Sounds like a snake oil salesman to me, who is likely backed by financiers who profit handsomely from everyone paying off their predatory vig.

Also, if you ignore credit card companies they'll sue you. Or they'll sell your account to an agency that will sue you. Ignore their letters and they'll auto win the judgment and then come garnishments, etc.

[Anonymous]

Anonymous wrote:Dave's fortunes changed when HE personally wiped the slate clean with bankruptcy. Now he advices everyone to avoid bankruptcy because it's biblical to square your debts? Sounds like a snake oil salesman to me, who is likely backed by financiers who profit handsomely from everyone paying off their predatory vig.

Also, if you ignore credit card companies they'll sue you. Or they'll sell your account to an agency that will sue you. Ignore their letters and they'll auto win the judgment and then come garnishments, etc.

He declared bankruptcy years ago... over 25 for sure, well before bankruptcy laws changed in 2005 to make it much harder for people to avoid paying back debt.

And he was in debt a lot more than $30,000.