Help me learn how to get out of debt

sammyjowedeking

I have found many differnet ways to start getting out of debt but I am not sure which ones work the best.

Short Story: Hubby and I have right under $45,000.00 in debt from credit cars, cars, medical bills, loans, and student loans. I lost my job and my husbands hours got cut to 20 a week. We cannot afford to pay everything off let alone make the minnimum payments.

SO Please!!! Help us by sharing what you have gone through or any advice you have for us.

Please do not just say stop spending money, etc. We have cut up all credit cards and we do not spend any monet on unneccesary things anymore.

We are genuinley in trouble and could use some helpful adivce!

We are young so we dont really care about messing up credit because once we are out of debt we could build it back up.

And we would like to try and save bankruptcy for a last resort because other people have cosigned a few things for us.

Thank you in advance!

Shannon023

What helped me is once one bill was paid off I'd take 1/2 that monthly payment and apply it towards another card/loan and put the other 1/2 in my savings account.

Takes awhile, but can be done. :flowerforyou:

AllTehBeers

So I would start with your most important bills. Rent, water and electric. Budget those out. Next, what I'm going to say makes most people weak with fear. Turn off your tv and internet. Steady... People actually do that. I have lived without tv at all for over a year now and its it best $100 a month I've ever saved. If its too much detox at once, switch to netflix.

Next. Part time job. There are things that hire always no matter how bad the economy get. Go to walmart, any fast food joint or get a job waiting tables at a casual dining place. None of these require much experience and its a quick way to make ANY kind of money.

If you can get a job where you can walk and you have more then one car, pull the tags and shut the insurance down. Yes, its not simple, and can incur fees later but its an instant way to save money until yo can get some better income.

If none of these are options.

Good luck! :flowerforyou:

ETA: also, credit card companies will usually work with you if you call them and tell them you are in a bad financial spot. They can knock the minimum payment down or put your account on hold. As long as you give them SOMETHING they won't close your account.

dovesgate

This is where you contact a debt relief program so they can negotiate with your creditors on your behalf.

Other than that, you just need more money coming in. Hit up the foodbanks for food, try to find jobs doing anything at all (like the previous poster said - Walmart, waiting tables, bussing tables, etc- if you have no kids, you can both work 2 jobs at least), and see which loans can be deferred until you're making a living wage.

Turn off anything unnecessary - t.v., internet, Netflix, home phone service, change your cell plan to something cheaper.

AllTehBeers

This is where you contact a debt relief program so they can negotiate with your creditors on your behalf.

Other than that, you just need more money coming in. Hit up the foodbanks for food, try to find jobs doing anything at all, and see which loans can be deferred until you're making a living wage.

Be careful with debt relief programs because some of them (not all) charge you a fee, put your name on a list and sell your info. Also, a lot of times, they just call the credit card companies for you and negotiate a lower minimum payment and you can just do that yourself.

With some effort, sacrafice and smarts, you can get through this yourself.

Go through your attic, garage and house and utilize some craigslist or do a yard sale.

dhakiyya

So I would start with your most important bills. Rent, water and electric. Budget those out. Next, what I'm going to say makes most people weak with fear. Turn off your tv and internet. Steady... People actually do that. I have lived without tv at all for over a year now and its it best $100 a month I've ever saved. If its too much detox at once, switch to netflix.

Next. Part time job. There are things that hire always no matter how bad the economy get. Go to walmart, any fast food joint or get a job waiting tables at a casual dining place. None of these require much experience and its a quick way to make ANY kind of money.

If you can get a job where you can walk and you have more then one car, pull the tags and shut the insurance down. Yes, its not simple, and can incur fees later but its an instant way to save money until yo can get some better income.

If none of these are optopns, sell drugs.

Good luck! :flowerforyou:

ETA: also, credit card companies will usually work with you if you call them and tell them you are in a bad financial spot. They can knock the minimum payment down or put your account on hold. As long as you give them SOMETHING they won't close your account.

I agree with all the above (apart from sell drugs lol) - just to add to the ETA bit, if when you do this you say something like "otherwise we'll have no choice but to go bankrupt" that usually will make them help you out as if you go bankrupt, they lose.

My husband and I were in a lot of debt 5 yrs ago, now we're not thank God. Find ways to reduce your cost of living, and increase your income, it's kind of like calories in calories out LOL except that you want more coming in than you have going out. We went to work abroad in a country where the cost of living is low and the wages, while not as high as in western countries, are high enough that with the low cost of living you can consistently put some money aside to pay off debts etc. If you do this you MUST check the exchange rate as what is a decent amount of spare cash in the local currency will not necessarily buy you very much in dollars, so go for somewhere with a strong currency. Going to work abroad was quite a drastic move, but in the UK where we were, the cost of living is ridiculously high (and a lot worse now than when we left).

Qarol

When I first graduated college, I didn't have a job for many months. I was single and on my own. I put rent on my credit card with those checks you get in the mail. I racked up a lot of debt very fast. I had no life. No cable. I watched the few VHS movies I owned. I ate a lot of cheap ramen and soup and saffron rice. I had that free dial up internet. When I finally got a job, I continued this behavior. I worked on paying off the bill with the smallest balance. Some recommendations say to pay off the balance with the highest interest. For me, seeing an entire bill gone was good motivation. And so on. It took a few years to get out of debt, but I did it. And frankly, I never want to be in debt again. I'm perfectly capable of living well below my means, if that's what it takes. It's not fun. But it can be done.

This may or may not help your situation. But it's what I went through.

becsnz1

Firstly, good on you to taking control of the situation and being responsible and wanting to sort it.

Do you have budgeting service in your area? Here in New Zealand we have budgeting services that are free for anyone to go to and they can help you sort a plan to get better control of your finances. The other option some banks offer here is debt consolidation loans so that all your debts are consolidated into one loan, you pay a lower interest rate than what you would on a credit card but you then only have the one loan to think about. Sometimes that can help rather than having to worry about all sorts of debts to pay.

Pay every time you get paid so that it is done regularly and consistently and you keep a good history.

Hope this helps a little and all the best to you.

AllTehBeers

Considering consolidation, if you can get all of your credit card debt on a single card (preferably the one with the lowest interest) this would give you only a single payment for that debt a month.

Ready2Rock206

This is where you contact a debt relief program so they can negotiate with your creditors on your behalf.

Other than that, you just need more money coming in. Hit up the foodbanks for food, try to find jobs doing anything at all (like the previous poster said - Walmart, waiting tables, bussing tables, etc- if you have no kids, you can both work 2 jobs at least), and see which loans can be deferred until you're making a living wage.

Turn off anything unnecessary - t.v., internet, Netflix, home phone service, change your cell plan to something cheaper.

Went to one of those places once - HUGE SCAM - they advertised they were free but really they charge you an extra fee to pay your bills for you. Ummmm if I could afford an extra fee I could pay all my bills too... Plus they destroy your credit anyway. Don't fall for it!

Pay the most important bills first - like rent. If you have any money left over pay the credit cards with the highest interest first.

sammyjowedeking

Than you for all the responses!

I wanted to add that we do not have rent or utility bills or cell phone bills ( his mom lets us stay at her house that she has paid off for no rent because she is living with her boyfriend at his house)

so when it comes down to it:

c.c:$500.00 $40.00/month
c.c:$1000.00 $20.00/month
c.c:$800.00 $40.00/month
c.c:$500.00 $25.00/month
Hospital bills: $10,000.00 ( 3 different hospitals and different visits so we havent set up monthly payments yet)
Car 1:$8,000.00 $185.00/month
Car 2:$14,200.00 $310.00/month
Loan 1: $3,500.00 $98.00/month
Loan 2:$2,000.00 $73.00/month
Business: $130.00
Student loans: $3,500.00 ( no monthly payment for 6 more months)

PLUS gas and car insurance a month



C.C means credit card. I did not put who I owe just because this is the internet but I do not mind shoing what I owe if it helps me get a plan going lol.

I was wondering if it would be a good idea to not pay on one of the cars so it gets reposessed? Would that make the payment go away? Because then we wouldnt owe acar payment on it plus we can change our car insurance so it may go lower

Also me and hubby do not watch t.v unless its netflix but that is 8.00 a month so i guess that can go to!

I am putting in job applications everywhere! My husband wrks from 4 a.m to 11 or 1 p.m M,W, and F. I am going to go with him tomorrow (to save gas) and apply for jobs when places start opening.

If at all possible I really do not want to go through a consolodation place or anything like that. I dont mind calling the card companies but I dont want a third party agency involved.

lelstar

I agree with Rachel for the most part. You have to be strict with yourselves. Shove your pride and get any job you can. Use a budget and a cashflow (i can email you an excel doc that got me out of the **** if you like). Consolidate all your credit cards and loans. If you are straight up with them they are much more willing to help you out. Also while its tough if you don't need to go somewhere stay at home, social life can come back when you can afford it.

freezerburn2012

Can you sell one of the cars?

Start with the smallest debt/CC/loan/whatever and pay it off first (while making minimum payments on the rest). Then, move to the next and then the next. Get rid of them one by one. I know from personal experience that it feels good to get them off of that debt list.

How often do you go out to eat? (and be honest - count all the trips to the convenience store too) You will need to make some sacrifices to climb out of the hole that you're in.

Good news: spending less money on eating out and cooking at home will often translate to losing weight as you're likely to consume less calories when you eat food that you've prepared yourself.

sammyjowedeking

would love that spread sheet!

dollipop

Firstly, do you need both cars? Is public transport reliable where you live?
Second, roll all the CCs into 1, see if anyone is offering a balance transfer or similar onto a low interest card. Maybe you could do the 2 loans on this too?
Menu plan for meals. Know what you're eating and when, this will help with the weight loss as already mentioned.

I wouldn't go for repossession on the cars personally, but don't know how it works in the States. But here, they'd take the car, sell it for as much as they can, which isn't always much, and add on all sorts of other fees etc, and you still owe whatever's left...

AllTehBeers

YI wouldn't advise letting your car get repossesed. Your debt doesn't look too bad that you need to suffer too much.

So, as I said before, your credit card debt is not that much. If you could put it all on one card, that would give you one single payment of maybe 100, instead of four payments of whatever.

Second, if you can stand being without a car (a bike would help with your burns too!) Park one, turn in the tags and cancel your insurance. Keep up payments though to pay down that debt and you will eventually be able to reinstate it.

your medical bills and student loans would be my last concern. These will always be there forever and you can pick them up after you get a bit more financially secure.

KaleidoscopeEyes1056

If having both cars would benefit more than it would help (ie, helping you get another job) then I would say to keep them both. If not, if you can use public transportation or car pool, or even get rides from another person for a while, do that. Since your student loans are still in deferment, they're not the most crucial debts to get rid of. Maybe start with the credit cards. But just because you don't have to pay the student loans yet doesn't mean to forget about them completely. And, you can also get the deferment extended in some cases.

As somebody else said, call the credit card companies and see if they can help you out any. Another thing you might look into is going to your bank and seeing if they have a financial adviser who might be able to sit down with you and figure out what you should pay off first and how to do it efficiently.

Best of luck to you.

hooperkay

I would make a buget. List all bills elec, water, car, insurance, gas, grocery, all bills. Leave out like a small amount for each of you for misc. stuff. (this can be saved up to go out to eat one night a month) Pay minimum on all bills. Number bills from smallest to largest. After all bills are paid take what is left and pay to smallest bill. Bills go first, savings second. By paying smallest bills first you will see biggest improvement. If two bills are same amount then pick one with largest interest rate.

To make extra money. Have a garage sale. Offer to clean neighbors house for fee. Babysit for neighbors. Explain your situation. $40 here and there add up really quick.

sammyjowedeking

Quick question

I am looking at the transfer thing for 2 of the credit cards ( other 2 are for stores) and one card is in my name and one is in my husbands. how can i get both of them on the transfe card?

KaleidoscopeEyes1056

To make extra money. Have a garage sale. Offer to clean neighbors house for fee. Babysit for neighbors. Explain your situation. $40 here and there add up really quick.

This is great advice! While you're still looking for a job, you can do these things. I would pay you to clean my house.

hooperkay

Quick question

I am looking at the transfer thing for 2 of the credit cards ( other 2 are for stores) and one card is in my name and one is in my husbands. how can i get both of them on the transfe card?

Be careful with transfers and write off's. They effect your credit score really bad. You don't want to damage your credit any worse than it already is. Best bet call companies tell them your plan and pay off slowly.

dollipop

Quick question

I am looking at the transfer thing for 2 of the credit cards ( other 2 are for stores) and one card is in my name and one is in my husbands. how can i get both of them on the transfe card?

Apply for a joint facility.
Edited to add: I work in banking/finance, but I have absolutely no idea how it works in the US...

sammyjowedeking

thanks! set up a care.com account and we are pulling things from the attic and storage to sell this next weekend!

Drenched_N_Motivation

I have found many differnet ways to start getting out of debt but I am not sure which ones work the best.

Short Story: Hubby and I have right under $45,000.00 in debt from credit cars, cars, medical bills, loans, and student loans. I lost my job and my husbands hours got cut to 20 a week. We cannot afford to pay everything off let alone make the minnimum payments.

SO Please!!! Help us by sharing what you have gone through or any advice you have for us.

Please do not just say stop spending money, etc. We have cut up all credit cards and we do not spend any monet on unneccesary things anymore.

We are genuinley in trouble and could use some helpful adivce!

We are young so we dont really care about messing up credit because once we are out of debt we could build it back up.

And we would like to try and save bankruptcy for a last resort because other people have cosigned a few things for us.

Thank you in advance!

I have an idea for you. But haters here dont like it and cry about it being "unmoral" and "wrong". Message me if you want to know how I did it.

afalls11

I was kinda in the same boat years ago. My husband and I did a couple of things.

1. We called each of the credit card companies and was able to work out lower payments, and even lower to no interest rates on the balances we owed. Each one was willing to help us with the situation.

2. My husband and I attended a Dave Ramsey Course called the Total Money Makeover. I swear by this book, and the classes we took. We keep making our payments, but started with the smalles bill and once that was paid, applied that payment to the next bill. You can look online for him. They have great spreadsheets to help you get started.

3. We traded the cars for cars that had no payments. They may not be brand new, but they run and get us to where we need to be.

4. I did pick up a part time job at a hotel. I mostly work the weekends, but it is extra cash coming in.

These are some of the things we did, and by the end of the year we will owe NO ONE except for our house payment. It's not going to be easy, but you have to be consistant in your goal.
I wish you the best of luck

AllTehBeers

Quick question

I am looking at the transfer thing for 2 of the credit cards ( other 2 are for stores) and one card is in my name and one is in my husbands. how can i get both of them on the transfe card?

I'm not 100% sure on your particular company. This you can get more details from your company. A call in the morning would be the first step.

Second. Cancel the store cards. If you can't get your clothes or jewlery with cash, you don't need it. This is more something to think about in the future. If I can't afford it with my pay, after I take care of bills, I do not need it.

KaleidoscopeEyes1056

I have found many differnet ways to start getting out of debt but I am not sure which ones work the best.

Short Story: Hubby and I have right under $45,000.00 in debt from credit cars, cars, medical bills, loans, and student loans. I lost my job and my husbands hours got cut to 20 a week. We cannot afford to pay everything off let alone make the minnimum payments.

SO Please!!! Help us by sharing what you have gone through or any advice you have for us.

Please do not just say stop spending money, etc. We have cut up all credit cards and we do not spend any monet on unneccesary things anymore.

We are genuinley in trouble and could use some helpful adivce!

We are young so we dont really care about messing up credit because once we are out of debt we could build it back up.

And we would like to try and save bankruptcy for a last resort because other people have cosigned a few things for us.

Thank you in advance!

I have an idea for you. But haters here dont like it and cry about it being "unmoral" and "wrong". Message me if you want to know how I did it.

Is it prostitution? Because I see that as being neither immoral nor wrong.

wxgurl

I know how scary debt is...we have just scratched our way out of $45,000, and it was not easy. We did the Dave Ramsey plan, which was amazing. He has the heart of a teacher, and doesn't just make you feel guilty. I saw some others say this but it is so important...House and utilities first and foremost! You have to have a place to live, and utilities are part of that. Sounds like you are starting to sell things that you can part with, and that is a great way to get started. We put our bills into a debt snowball, from smallest bill to largest...we didn't care if any were interest bearing in the beginning, we just wanted to get rid of any small ones we could, and that was a huge ego boost, which kept us going. Thanks to some medical issues, we still have a little ways to go, but we know how to handle it. If collectors call, just remember, they operate on fear, so don't let them bully you. You make sure you have food and shelter first, then bills...Good luck, and I know you can do this!!! Just take it one day at a time, one breath at a time, and one bill at a time...it gets better...

loseequalsgain

2. My husband and I attended a Dave Ramsey Course called the Total Money Makeover. I swear by this book, and the classes we took. We keep making our payments, but started with the smalles bill and once that was paid, applied that payment to the next bill. You can look online for him. They have great spreadsheets to help you get started.

I swear by Dave Ramsey. He is GREAT!

Drenched_N_Motivation

Quick question

I am looking at the transfer thing for 2 of the credit cards ( other 2 are for stores) and one card is in my name and one is in my husbands. how can i get both of them on the transfe card?

Be careful with transfers and write off's. They effect your credit score really bad. You don't want to damage your credit any worse than it already is. Best bet call companies tell them your plan and pay off slowly.

Balance transfers do not effect your credit.

AllTehBeers

3. We traded the cars for cars that had no payments. They may not be brand new, but they run and get us to where we need to be.

This is a great idea. Plus, when you own your car outright, your car insurance is so much cheaper.