We'll see what others say, but I'd be reluctant to go the bankruptcy route - because 36k probably doesn't merit bankruptcy, and it's a challenge to get student loans cleared.
It may help to look into what it would take to reduce your student loan payments, and there's a chance that you could get a personal loan - or even a home equity loan at an interest rate that's significant lower than what your credit cards are cost you. (noting that you'd be more likely to lose your home if you take out another loan against it - so you have to be capable of NOT increasing your credit card balances when they're partially paid off.)
Another thing to think about is your parent's situation. What would rent cost them if they didn't live with you? (and how much rent would a roommate pay - if that was an option for you?). They really should be contributing more to your household expenses, to the point where not paying rent is putting their situation at risk.
Bankruptcy should always be the last resort... like last last resort.
Are your parents not able to contribute to the bills? If they are on a fixed income but you are paying for everything and they live with you? what are they doing with their money?
Honestly, before screwing up your credit and everything else for the next 7 years (I think that is how long a bankruptcy is on your record) II would look into getting a part time job to help supplement some income. It is going to suck but that extra money can help you pay down some debt faster. Even if it's 2-3 evenings a week and 1 weekend day.
My parents are paying the mortgage on the home they have but currently don’t live in. They pay the cable, cellphone, food, and any emergency unforeseen bills like my recent water leak $1.4k.
Why aren’t they renting out that house then? Or they could sell it and help their daughter which I do understand isn’t their responsibility but it could help all of you out. Also it sounds like you might have a credit card problem I would try to minimize those after payoff.
Their home is currently not rentable due to it being a hoarded home. After I pay off the $36k credit card debt I don’t want to touch another credit card in life.
It needs to get cleaned out and rented or sold. I understand how hard this is and had a similar dilemma. But it needs to get done. I suspect would fix most of your problems.
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some. But they have not made any progress towards clearing it out. I definitely can’t clear it out all by myself. I’d need at least 2-3 people to help.
You could slowly keep putting items from their hoardings in the other house for sale on free platforms. That amount should be used for paying off your credit cards.
Slowly and consistently keep doing it. The house will be empty in no time at all.
Having dealt with a hoard, sometimes a lot is of low value. The perceived value is higher to the owners. We had to resort to a dumpster for a good 70% of it. That was after thrifts store drops. It can feel insurmountable, but you have to tackle it.
I agree that the amount of items of value vs what’s left is low. The items of value are breakables and a few pieces of furniture. There was an attempted clean out with 3 people prior to Covid. We got 1 room nearly clear. It took a week of 10 hour days.
I'm not saying you should do this, just food for thought.
Consider just selling the home as is. Yes, you'll take a hit, but realistically it's costing money that's going nowhere at the moment and causing you stress. It's going to take not only time, but a significant amount of money (which you don't have) to get it in tip top shape. All that money, time, stress would eat you alive. If it were sold tomorrow for even 50% of ideal market value, you'd probably be a lot better off.
I wish that would be an absolute dream. There would be few items worth saving and I’d be willing to sell those as well. My sister does some Realestate work. I’ve warned her that I don’t want the home. She did assist with a partial clean out about 5 years ago. Other than that she’s proved to be of very little in any way.
5 years! It's been sitting empty for 5 years!? What have your hoarder parents done to your house in that time? Can they move back to their house if cleaned up, or is it gonna be sell it and let them live with you?
Yes, it’s been sitting there since December 2017. In that time they’ve definitely added more clutter and items than I’d like. I bought my house to live alone and get away from a hoarding environment. If there home was cleaned up they’d still have difficulty moving back because it’s not wheelchair friendly. They want to eventually move back to their home once my father is able to regain his mobility.
I would try to get that house cleared out even it’s by you for the cheapest price possible. Then sell that house since it sounds like there are tons of damages and you don’t have money to put into it. And maybe come to an agreement with your parents whether it’s them picking up more bills or paying off some of your debt since they do live with you.
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some once . But they have not made any progress towards clearing it out. It’s not a job I can do on my own. I’d need at least 2-3 more people.
Well I would come out to your brothers and sisters/ sister and ask them for help. And this might be a bit harsh but you gotta work something out with your parents because I guarantee most of your expenses would be less with your parents living in their own home. But i would tell them how much you are struggling with them living with you. Because it sounds like you have extra rooms you could rent out for market rent In that area and have those Roomate’s pay for utilities aswell. Which could be something that could help you.
Another option too could be to put it on the market and see if you get any cash investor options. You're not going to make as much on the home but it will at least clear up funds
I would definitely declare bankruptcy. Since you don't want anymore cards.... you can start fresh. Of course, the student loans won't get wiped out. I bought the book "bankruptcy for dummies" years ago. Then I declared BK. That was over 15 years ago. Credit now stellar. No issues with any financing if needed. Yes it took 7 years to build back up. But it's doable and you are a slave to your payments right now. The first sentence in the book is "bk is for a fresh start for people who screwed up"...like you and me! Go read the book at B&N and get started. Best to you!
- I need a complete breakdown of your monthly expenses
- What are the interest rates for your debt?
- I assume the $1.8k is *after* taxes?
- You may have a higher chance of keeping your home since your current on your mortgage with a Chapter 13 bankruptcy (don't want to go down this avenue yet, this is the last resort)
I hate to say it, but this is not a debt problem -- It's an income problem. Have you job shopped at all? Could you make more somewhere else? Unfortunately, in modern America, that fastest way to a raise is to change employers. Consider it. Maybe get one that will cover insurance for you as well.
Absent that, get a second job. You may need that anyway until the debts are knocked out. But as mentioned, bankruptcy won't save you from the student loans. And the only way out of the mortgage is to sell the house.
This is good advice. One additional source of income would be rent from her parents who apparently are holding on to some home that (my guess) her siblings are living in.
If you got a new job making even $85k or $90k and your parents paid your mortgage, your debt could be eliminated quite quickly.
Bankruptcy isn't going to wipe out student loans. You will have to pay back a good portion of the credit card. Bankruptcy does not just wipe out your debt they require you to pay back on a court approved schedule.
1. You are going to have to get a second job or a third part-time job that does not interfere with your primary job. Or seek a higher paying job.
Growing up, I had 3 different part-time jobs at the same time and worked almost every day 365 days a year for 10 years, so it can be done.
2. [Consolidate your loans.](https://www.nerdwallet.com/m/loans/personal-loans/credit-card-consolidation-loans)
3. Ask your parents about selling items from their house. One of your jobs would be slowly clearing out your parents' home. Pick one small space at a time. Even if you just spent one hour every other day, in a two week period you worked 7 hrs.
4. Seek government assistance in student loans. If you have already done, seek again.
5. Look at your budget again and cut out any unnecessary expenses like coffee, fast food, or going out for lunch.
6. Remember to do something fun that doesn't require a lot of cash, walking club, hobby, or just socialize w/ friends.
7. Recognize this is not a quick fix. Most certainly 5 years or more.
8. Finally, avoid Bankruptcy, it's more than 7 years affecting your credit score and life.
Good luck
"selling items on Mercari and Poshmark."
You shouldn't have things to sell, unless it explains how you are still overspending. Have you looked for a second job? A better job? Both? Can you do some freelance? Go do sports announcer, for instance, or at a fair event. Auctions.
Have you shopped for ACA health? It seem like you would qualify for a premium subsidy. Are you claiming your parents in your taxes?
School loan debt can be private, government, both?
The items I’m selling on Mercari and Poshmark are from my bad past spending habits. I’m currently looking for another full time job ideally a wfh position. However I’m open to anything that pays more.
I have Blue Cross and Blue shield. I pay $250 a month. I’m currently not claiming my parents on my taxes.
Yes, I cut up all of my credit cards except for the 3 I keep for emergencies. I deleted all shopping apps, unsubscribed to shopping emails, and catalogs. When I do shop for anything I pay in cash to decrease my chances of going over budget. I currently see a psychiatrist and I’m on medication. I’d been in therapy for 4 years. I stopped therapy last year due to the cost. My insurance doesn’t cover it and even with some financial assistance it still was pricey. There are times where I still struggle. I grew up in an hoarded home. I’m willing to continue getting any treatment and counsel for my spending issues.
I agree. No way selling your house makes sense.
Your parents house sounds like a freakin albatross at this point though. If that stuff has been sitting in their home untouched for 5 years, just through it all away and sell or rent it. Don't go through it. Except for family photos, just put it in a dumpster. Freeing up that house quickly is way more valuable monetarily and for your sanity than anything that could possibly be recovered. (I have a light hoarder streak myself and my wife has shown me that I was way overvaluing my stuff compared to the freedom of decluttering.)
I wouldn’t sell the house. You have many options and that’s the last thing I think I’d do. You could take some equity out of the house. Before doing this I’d try to get a personal from a local trusted credit union and get a lower apr on those.
Which is less than $67k....are you bringing in income in another way? Outside of the $1k Mercaei stuff?
$25.32 x 40 hours = $10128 x 52 weeks = $52665.60
Before taxes etc of course. Can you clarify? Easier to help if we know what we're working with.
I agree with others that one sure thing you need to look into, is finding another job. Look into HR positions, if that’s your chosen field, with manufacturing companies - corporate or in the manufacturing plant sites. Across a variety of industries. Just one suggestion. Alabama seems to have a good deal of it. Companies are always lookin g for more women for their supply chain operations. Have you always been in HR?
I know it’s not easy. I feel so mean for saying it. But this is an income problem. You have to increase your income. Not $1,000 a year selling random things. Like two full time jobs increase your income. And I know it’s hard. I’ve been applying to jobs for months and barely hear back. But that’s the only way you’re going to be able to dig yourself out of this.
Student loans would still be there after bankruptcy.
This situation isn’t that bad. Imagine if you really could double your income. You could pay off those credit cards in a year.
Can you tell us more about your home loan? How long is left on the loan? What’s the interest rate?
Perhaps getting those credit card balances into a personal loan at a lower interest rate would be beneficial.
I'm going to have to make this into multiple comments, I apologize. I've run some numbers and there are ways to financial freedom without bankruptcy, but it's going to hurt.
Here's what I've got:
Total monthly income after taxes: \~$**3600**
Credit Card Debt
|Credit Card|Total Amount Owed|
|:-|:-|
|Chase|10,454|
|Discover|8,808|
|Citi Card|6,650|
|Hancock Whitney|6,400|
|American Express|2,297|
|Kohl's|226|
|SYNCB/TJX|4,076|
|SYNCB/Belk Dual Card|3,004|
|SYNC/JCPenny|1,561|
Total Credit Card Debt: **$43,476**
Monthly Bills
|Bill Name|Bill Amount|
|:-|:-|
|Health Insurance|265|
|Cable & Internet|260|
|Water|86|
|Electric|185|
|Home Security|120|
Total Monthly Bill Amount: **$916**
**$3,600 - $916 = $2,684** left over
Credit Card Min. Payment
|Credit Card|Min. Payment Amt|
|:-|:-|
|Chase|332|
|Discover|217|
|Citi Card|211|
|Hancock Whitney|235|
|American Express|???|
|Kohl's|29|
|SYNCB/TJX|165|
|SYNCB/Belk Dual Card|130|
|SYNCB/JCPenny|74|
Total known credit card min. payment: **$1,393**
**$2684 - $1,393 = $1,291** left over for groceries, gas, cell phone bill, car insurance (these were things left out of your breakdown). Every cent of this should be going directly to principles of your debt. No eating out, no movies at the cinema, no extra groceries, no fun. You have to be serious about getting yourself out of this hole you're in...
First, I highly recommend consolidating your credit card debt so you're not paying 9 different entities with varying interest rates. You can use a company like PDS Debt to help consolidate CC debt into a singular monthly payment, if you qualify - and it doesn't hurt to try and see if you do.
Next, I would remove the Cable & Internet, Home Security, and Health Insurance bills - at least in the short term. That money is better spent going towards the principle on your credit card debt. You need to focus on paying directly to principle on your CC debt while you continue making your income driven student loan payments. Once your CC debt is taken care of, use any and all of the money you were spending on your CC debt and pay directly to your student loan principle after making your initial monthly payments.
One of your major hindrances here is your gross income. It's simply not enough to pay off your debt in any meaningful amount of time. You can/should look into getting another part time/full time job and use that income SOLELY on paying on your debt. The ONLY other option, and one I recommend as a veteran myself, is giving a look at joining the Armed Forces. Seriously. Either Air Force or Navy. Both branches have high paying jobs, pensions (for your retirement), and since you have degrees - you'll be starting out as an officer, which is higher in the pay scale. They also provide you health/dental/vision at no cost to you. Both branches have higher age cut offs (in the early 40s), so as long as you're able to pass the initial physical/mental exams - you can join either branch for a better paying job, benefits, and the beginnings of some sort of retirement.
Thank you for your feedback!
I apologize if the breakdown I posted was confusing. My health insurance is $250 a month. I added it into my monthly bills.
Unfortunately I’m pretty sure I don’t qualify to join the military. I had a spinal fusion for scoliosis over 20 years ago. I will check again to see if there’s any chance I could get a waiver. My father is a military veteran as well.
You need to create a strict budget, and stick to it. You need to lower your internet/cable by $200, no reason at all on this earth to be paying $260! Then you need a second job, at the very least uber eats or something. If you’re able to throw an extra $1000 a month towards debts you can get yourself out of this mess in 3-5 years. Then you’d have a significantly better life.
I highly recommend looking up Caleb Hammer on YouTube. He sits down with people that are in similar situations as yours, points out how it’s usually a spending problem, then creates a strict budget and plan for them. Can be motivating.
If I’m doing my math right, your bills are $2800 a month. Add $400 for groceries, and maybe $50 a month on gas, your expenses are about $3300 per month, and you take home $3600 per month? What is your mortgage payment, you said your parents are paying that? Yeah your current income basically only allows for a few extra bucks each month, if you can find a way to take home an extra $250 weekly, you can pay off that 36k of credit card debt in 3 years. After you do that, your monthly expenses will drop by $1800 I think- which will give you a lot more breathing room, and ability to pay off your student loans sooner than later.
How about your parents kick in to have the home they own but don’t live in, professionally cleaned out so it be can be sold or rented - something done with it?! That seems like a legitimate emergency expense to be covered! They’re right now paying a mortgage on essentially a storage unit! I don’t think bankruptcy is going to solve your problem. But a bankruptcy attorney, multiple of them consulted, will give you a clearer picture and they don’t charge for the consult.
I’m looking into estimates for a cleaning company. Before Covid a company quoted me $10k but they’d have everything done in 2-3 days and dispose of any garbage.
Perfect. It sounds like doing it yourself is going to take years, and frankly you need to be working on your second job instead of that.
That service is worth 10 grand imo (and if they died, you'd have to do it tomorrow, or sell the house as an as-is sale).
Your parents can borrow that money and pay it off with the sale of the house. That will greatly mitigate their problem of being on a fixed income. You dad can have all the cable channels he wants at that point!
Other than that, I would cancel the security service unless it is recovering 1440 in stolen packages a year. If your parents are getting the main benefit and can't live without it, they should be paying for it. If they can't afford it, tough. You can't afford it either.
Good for you for keeping on digging yourself out of the credit card hole. I agree that a bankruptcy consultation is worth a look if you're having trouble increasing your income with a second job. Even at a 1k cash surplus a month, that's still a long time to get back to zero.
My other concern is that with your finances intertwined, if your parents passed away or have a financial crisis, you're hosed, because they are meeting some of your your basic expenses. I am concerned that the long term plan of getting out of debt is gonna be too long term.
Lastly, not to be that forum guy, but at some point in your life, you are gonna need to start saving for retirement. Waiting 4 or 5+ years in cc debt limbo ain't socking away money for the future. Starting at age 43 isn't the worst thing I have ever heard, but if you could declare bankruptcy this year (even if you end up on a payment plan) and assemble an emergency fund and get to saving, that's better.
Good luck and keep us updated!
Rent-if your parents weren’t living with you they’d have to pay rent-are they living with you for free? Even if they paid half the market rate you’d have some extra money.more people = more wear & tear on house,more electricity,more water,etc. do they qualify for low income housing or a subsidy?
My parents pay my car insurance, cellphone, cable/ internet, food, and any unforeseen emergency bills. I don’t know if they qualify for a subsidy they are still paying on their own mortgage. They currently do not live in their home due to it not being handicap compliant and needing a lot of work. It’s a hoarded home.
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some. But they have not made any progress towards clearing it out.
I filed for bankruptcy 20 or so years ago. Got to keep the house. One of the best decisions I ever made. If I hadn’t done it I would still be paying off that debt today.
I don’t remember much about the actual process itself because it was done by my POA while I was serving overseas. My credit was abysmal for a while. I got credit card offers within a few months, but they were really small limits, like 3-500 dollars. It was on my credit report for years but as far as the score, I wouldn’t know. My credit was shot by then anyway. I bought my current house about 10 years at the best interest rate that was available at the time. I have about $35k in available credit now and my score is around 740
I got divorced, and filed bankruptcy about a year later. I owned my car, and had a mortgage. No student loans. I did not have as much CC debt as you, but I couldn’t afford it (no alimony and I was taking college courses paid for by my employer).
I owned my car, so I didn’t need to worry about a car loan for a while. I already had a mortgage. I had a zero balance CC that I kept open but didn’t use.
The industry I worked in checked credit, so I had to write a letter of explanation for my filing. It wasn’t due to anything egregious (just having a crappy ex), so it wasn’t an issue with my employer.
If you’re now spending within your means an don’t anticipate making any job or financial changes, filing could be the way to get a fresh start. I was a debt collector for several years, and recommended filing to some of our customers. You can work yourself to death to pay things off, or you can file and live within your means. Not everyone who files is a deadbeat.
Thank you for your feedback! I know I owe a lot in student loans but the credit card debt is what really stresses me out. Idk if that the right mindset but it seems like everyone has student loans. I’ve also applied for loan forgiveness. It may not look like it but I’ve really tried to pay stuff off and changed my spending habits. I feel like I’m only now just now making a dent. I don’t want another 4-5 years to pass and I’m still working an extra job to pay on the debt. I know I didn’t get into this mess overnight. I’m looking for a higher paying full time job and a part time job. The full time job would possibly be a government job but not for certain. I know that people I currently work with have filed bankruptcy and I haven’t heard anything about it.
Any equity in your home? Have you tried calling your credit card companies to see if they have options? Check to see if your parents are getting all the benefits they deserve also. It’s possible to bounce back.
Yes, I need to check my equity again but it’s $103k. I haven’t recently tried calling my credit card companies. I’m working to make sure my parents are getting all the benefits they can. My father is an Army Veteran. We are working on getting my dad 100% disability benefits as apposed to his current 50%. The VA helps with some things but it’s been a battle for the last 7 years to get things for his care. It took 3 years to get a wheelchair and we even had a staff member steal my father’s cell phone. I live in Alabama and our local VA has only recently gotten a bit better.
Get your day to buy or refi the house into a va loan. I would get as much liquidity as possible. The cc companies will more than likely work with you. Good luck!
My suggestion is to get the credit card debt down as quickly as possible. Since you bought your home in 2017, I am assuming the mortgage rate is low. If you are able to get a home equity line of credit against your home, you can use that to pay down your credit card debt. The HELOC rates should be about 8% (but definitely double check the APR etc.). If the HELOC interest rate is lower than your credit card APR (which should be the case), that may be a strategy.
The credit card debt is my biggest concern. I applied for a HELOC line of credit 2 years ago and was denied. I will try again. I’d think the HELOC rate would be lower since some of my credit card interest rates are at 20% +.
You need to create a budget and track your spending. 36k credit card is pretty bad but still doable on a 67k income. You need to figure what are your essential spendings (like home, health, food, transportation) and then throw the rest at the credit card debt. Take a look at Dave Ramsey. His baby step is basically for you. Follow it and get out of debt. The most important thing is to get out of the credit card debt ASAP.
Chase : should be able to put you on a fixed payment plan . Interest could be around 12 percent which is way better than 29 or so . Only caveat is they would close the account and it will hit the credit score .
Amex : may put you on a payment plan without closing the account but with temporary hold on transactions. You may want to keep it for emergencies and not enroll in hardship plan .
Discover : someone mentioned about .99 hardship plan . You may want to check with them
n Whitney : You may want to check if there are any “financial hardships plans “ .
Once the interest rates are lower you would be able to free up some money which you could use to pay off the lower amount cards ( debt snow fall method )
You definitely don't need to file for bankruptcy. Not even close. You need to get a part time job waiting tables or sell some shit and pay off these credit cards one at a time smallest to largest and cut them in half until you just have 1 left for emergencies. Once you're not paying 30% interest on 36k in credit debt you'll be fine. The student loans aren't going away with bankruptcy anyway. File for a hardship or income based repayment plan on the student loans and don't even think about canceling your health insurance.
You should talk to an attorney to at least find out what they tell you because not all bankruptcy. Just discharge your debt like they used to.
Your student loans, of course, are still gonna be owe
And then you can talk to those people that consolidate your debts and look for a nonprofit that they usually reduce the interest and your accounts are closed, and it will hurt your credit, but you may be able to get them paid off quickly as well
It wouldn’t hurt to talk with a bankruptcy attorney, and it wouldn’t hurt to talk with one of those debt consolidation places, cause those really are your best options in regardless of what you’re doing your credits not gonna improve for a while
Wow!!! You have a masters and only make 50k? Your student loans are gonna kill you, did your employer help with paying for any of your education? ( hope that biden gives more loan relief?)
Is your health insurance included?
36k in cc debt? I understand the student loans, but you gotta hide those cards, maybe get a 2nd job? And work on a promotion where ya gonna make more.
Your parents, good for you helping them, but maybe they can contribute more? Help w utilities?
I make $67k. I’m most concerned with the credit card debt. No, my employer didn’t help with paying my education. I’ve applied for student loan forgiveness. My health insurance is $260 a month. I cut up all my cards but the 3 emergency cards. I’m looking for a higher paying job and a part time job. I’ve talked with them about paying more I’m hoping they can contribute $400 a month that would be at least half my mortgage.
You have options. None are going to be easy. You can work on reducing your expenses ( sounds like you have already started that) or make more money. Finding a new job is not easy. 2 things that I know work. DoorDash and Air Force national guard.
Make a budget and look into ways to increase income. Focus on the credit cards first. This could be done without bankruptcy, also bankruptcy would not get rid of the student debt
Things look bleak when money is tight for extended periods of time, it gets exhausting and feels hopeless, like you’re robbing Peter to pay Paul and there’s no end. I get it but bankruptcy will seriously limit your options in the future and is a last resort. A few options that might be worth exploring before bankruptcy, you may just have a cash flow problem. In which case you need to increase cash flow coming in (new job, extra job, new position w/ raise) and/or decrease cash going out (refinance, pause payments due to hardship).
Can you put your student loans into deferment for a year, get a part time job and knock out the credit card debt? Not an ideal situation but interest rates on credit cards are undoubtedly higher than the student loan.
Or how much equity do you have in the house? Is there an option to take a $36k HELOC to pay credit card debt? Again, interest rates are high right now but still lower than your CC.
Yes, it’s been about 4 years since I decided to focus on paying my debt and making major lifestyle changes. I’m completely ashamed at what I’ve done. I definitely feel hopeless and like my family might be better off without me since I have good life insurance policy.
I’m looking for a new job. I live in Alabama. I can put my loans in deferment I’ve never tried that. I have about $104k in equity. It could be more. I applied for a HELOC loan about 2 years ago and was denied. I can try again.
My main focus is my credit card debt.
Thank you for your advice.
Sounds like there’s a lot going on between the cash flow issues and potentially some family dynamics.
Does your employer offer an Employee Assistance Program? Your comment about your family being better off without you is a bit concerning and it helps to talk through those thoughts.
I can check and see if they do. I see a psychiatrist and take medication. I was seeing a therapist but even with financial assistance it got too expensive.
Thank you for your feedback.
Bankruptcy seems to screw you over more than necessary. But you can’t budget your way out of this. (Budgeting and optimising loan rates etc. will help though). And please stop selling stuff as a side hustle. It’s not worth your time.
a) Talk to your parents about contributing more. I am sure they can contribute something towards maintaining their living situation (a small rent for example)
b) you need more income. Either through a better paying primary job or a side gig (or both). Doordashing and such are options, but since you have a comm degree, I’d assume you can write or film or edit… these are gigs you can take freelance relatively easily and given the right circumstances they can pay decently. The acquisition of new gigs will be a bit more complicated, but the reward might be worth it.
c) you still need to optimise your spending/outgoing payments. This will be time-consuming, but you have to do it.
d) I just said no selling stuff. However. Do you have a bigger ticket item that you don’t need? That you can get you a few hundred dollars for? I am thinking family heirlooms, that no one cares about… something like that. One of these could get you a small emergency fund. No touching unless it’s an emergency with the house or the car.
(Edit: format)
Yes, I do have quite a few family heirlooms that might make me a couple hundred dollars. However they technically are not mine yet. I’d inherit them. I know this is going to sound bad but I’ve thought of gradually sneaking pieces out and selling them. It’s mostly breakables like European dishes, crystal, and figurines. They are stored away and not being used or even seen. I’m thinking maybe an antique shop would be interested.
Don’t steal stuff. Under no circumstances sell stuff that you do not own. That’s theft. Everything has to be above board. Even more so, because you’re dealing with family. Trust me don’t do it!
It’s just a thing I have noticed. People our age usually have already accumulated some stuff that they don’t need or even want. The watch you bought but don’t wear, some great aunts old jewellery… stuff like that. If you don’t, then you don’t. And it’s not really worth selling the smaller stuff.
I just want to put this into perspective. $36000, paying $50 per month, at 29% interest becomes $123,281 in 5 years. In 10, $435,075. In 20, $5.5 million. In 25, $19.75 million. Any of us would kill for 29% interest, and you're giving it away.
The first thing you need to do is cut up your credit cards and never use them again. You cannot handle these.
Frankly, go find Dave Ramsay and join his cult. When you've eliminated your debt, then come back to this sub and ask what to do now. Don't buy anything from Dave except his book, and don't get into bed with one of his financial planners, but the man's great for someone who is addicted to credit cards.
Consider credit consolidation first, credit reduction second, and chapter 11, then 7. Homestead your house if you have not done so. Buy a paperback book on bankruptcy in your state so you know your state and federal laws and avoid charges of fraud. Talk with your parents about getting on any programs that will help with the bills that you may qualify for as a household. Make sure each is able to cover their own food and utility costs from their pensions. When you have done all that you will have learned a lot and are well on your way to managing your budget and your debt load and your path will become clear.
How much is your house note? Utilities? Car insurance? You aren’t making bad money.
Do you get your nails done? But coffee every morning? Go out t eat all the time? This should be fixable.
My parents pay my car insurance. I don’t get my nails or hair done, I limit going out to eat to once every 3 months, I bring all my drinks and meals from home.
Yikes. You’re cutting corners. Don’t know how you do it on one income, though! Are you willing to put up with a spouse? I couldn’t make it without mine.
Are you able to cut your cable and only use internet in a lower price? 260 sounds a lot ( I pay 160 for internet crying because it’s the only cable internet in my area) .
I don’t think you’d get out of your student loans with bankruptcy. It’s nice your parents are buying food, but you may need to ask them to pay something on the house note.
I declared bankruptcy once. I started a business, got in trouble, couldn’t run the business, couldn’t sell the building, boom. Ten years of bad credit. Plus it was humiliating. I don’t recommend it.
You may be able to consolidate those loans and get a lower note. I would stay off them. You’re making 70K and need to start getting that 401 K match money if you can.
I would consolidate credit cards, ask parents to pay some rent, and find extra work if you can.
Your parents own a home but aren’t living there? They need to sell it if they can’t rent it so it’s cash flow positive. And then they can pay you rent and a lot of these issues go away.
You don’t need cable and internet should be available for much less than $260 a month.
Is the $120 a month on Home Security like an alarm system? Ditch that shit.
My parents down own their home. They have a mortgage. They cannot rent it due to it being a hoarded home and they don’t want to sell it.
I agree about the cable. I’d like to cancel it. They pay that $260. My neighborhood only has AT&T and WOW Internet/Cable.
Yes, the $120 is for ADT/Ring. Unfortunately I’ve had someone steal packages from my doorstep and neighbors have had their home broken into. The 911 feature is also helpful due to my dad’s medical condition.
Want has nothing to do with it. People don’t get to cry that they’re “on a fixed income” while paying for a house that’s not being used.
Unless you’re getting $1440 a year in stolen packages then it’s not needed.
I would cut out cable and internet ($260) and home security ($120) straightaway. No eating out if you are doing it. That should save you at least $400-500 every month that you can start paying towards your credit card debts. Start buying clothes from goodwill if you absolutely have to.
Can you rent out a room in your house?
Find a second job - server on the weekends, or Publix or Kroger or target, Uber, DoorDash etc.
You can also try contacting the elder community services in your area to see if they can help with getting someone to clean up the hoarded house. You can mention that it’s your parent’s house but they cannot live there and you cannot host them anymore.
No problem I didn’t mean to come off rude in my original comment. Although I didn’t need schooling I did need a good amount of certifications. But it only took me about 10 hours instead of 4-6 years of school.
If the student loans are federally backed, they will not be discharged in bankruptcy.
I have several friends that take advantage of federal loan forgiveness programs (I was a Paramedic and had my loans paid off before these programs started)
https://files.consumerfinance.gov/f/documents/cfpb_guide-for-first-responders-with-student-debt.pdf
The huuuuuuge red flag here is that you’re hemorrhaging money monthly and according to the expenses you’ve described, you make more than enough.
So bankruptcy is not going to help you even slightly, because you still don’t understand the spending problems that you have. You gotta figure out where you’re spending all your money or else you’re just going to start racking up your debt all over again.
Admit you have a problem and address it before you do anything else.
You have a masters and pull in. A gross salary of sub 80k?
Your problem isn't solved by bankruptcy, it's you don't earn enough gorn the cost ofn your degrees.
Probably going to need legal advice for this one.
I’m not sure if you can default on student loan debt. I think the big thing to know for bankruptcy is that it takes your credit - so big purchases are near impossible. (Such as a car). So you may only be wiping out your credit card debt.
Is your health insurance worth it? If it’s just for you, and you are low risk, it might be good to not have insurance and pocket the money and pay for medical visits out of pocket. (Assuming you are low-risk)
I could file deferments on my student loans. I’ve also applied for student loan forgiveness. My main focus is wiping the credit card debt. My health insurance is $260 a month. I currently don’t have any major health problems but I do have a family history of multiple cancers and heart disease.
We'll see what others say, but I'd be reluctant to go the bankruptcy route - because 36k probably doesn't merit bankruptcy, and it's a challenge to get student loans cleared. It may help to look into what it would take to reduce your student loan payments, and there's a chance that you could get a personal loan - or even a home equity loan at an interest rate that's significant lower than what your credit cards are cost you. (noting that you'd be more likely to lose your home if you take out another loan against it - so you have to be capable of NOT increasing your credit card balances when they're partially paid off.) Another thing to think about is your parent's situation. What would rent cost them if they didn't live with you? (and how much rent would a roommate pay - if that was an option for you?). They really should be contributing more to your household expenses, to the point where not paying rent is putting their situation at risk.
Bankruptcy should always be the last resort... like last last resort. Are your parents not able to contribute to the bills? If they are on a fixed income but you are paying for everything and they live with you? what are they doing with their money? Honestly, before screwing up your credit and everything else for the next 7 years (I think that is how long a bankruptcy is on your record) II would look into getting a part time job to help supplement some income. It is going to suck but that extra money can help you pay down some debt faster. Even if it's 2-3 evenings a week and 1 weekend day.
Bankrupt can affect you for much longer than 7 years…
My parents are paying the mortgage on the home they have but currently don’t live in. They pay the cable, cellphone, food, and any emergency unforeseen bills like my recent water leak $1.4k.
Why are they paying on a home they don’t live in?
Why aren’t they renting out that house then? Or they could sell it and help their daughter which I do understand isn’t their responsibility but it could help all of you out. Also it sounds like you might have a credit card problem I would try to minimize those after payoff.
Their home is currently not rentable due to it being a hoarded home. After I pay off the $36k credit card debt I don’t want to touch another credit card in life.
It needs to get cleaned out and rented or sold. I understand how hard this is and had a similar dilemma. But it needs to get done. I suspect would fix most of your problems.
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some. But they have not made any progress towards clearing it out. I definitely can’t clear it out all by myself. I’d need at least 2-3 people to help.
You could slowly keep putting items from their hoardings in the other house for sale on free platforms. That amount should be used for paying off your credit cards. Slowly and consistently keep doing it. The house will be empty in no time at all.
Having dealt with a hoard, sometimes a lot is of low value. The perceived value is higher to the owners. We had to resort to a dumpster for a good 70% of it. That was after thrifts store drops. It can feel insurmountable, but you have to tackle it.
I agree that the amount of items of value vs what’s left is low. The items of value are breakables and a few pieces of furniture. There was an attempted clean out with 3 people prior to Covid. We got 1 room nearly clear. It took a week of 10 hour days.
I'm not saying you should do this, just food for thought. Consider just selling the home as is. Yes, you'll take a hit, but realistically it's costing money that's going nowhere at the moment and causing you stress. It's going to take not only time, but a significant amount of money (which you don't have) to get it in tip top shape. All that money, time, stress would eat you alive. If it were sold tomorrow for even 50% of ideal market value, you'd probably be a lot better off.
An estate sale or selling items to an antique shop would be ideal I think.
Take the key from your parents. Go to their house. Throw EVERYTHING in a dumpster. Bring them over for a surprise witha realtor and wahlah.
I wish that would be an absolute dream. There would be few items worth saving and I’d be willing to sell those as well. My sister does some Realestate work. I’ve warned her that I don’t want the home. She did assist with a partial clean out about 5 years ago. Other than that she’s proved to be of very little in any way.
5 years! It's been sitting empty for 5 years!? What have your hoarder parents done to your house in that time? Can they move back to their house if cleaned up, or is it gonna be sell it and let them live with you?
Yes, it’s been sitting there since December 2017. In that time they’ve definitely added more clutter and items than I’d like. I bought my house to live alone and get away from a hoarding environment. If there home was cleaned up they’d still have difficulty moving back because it’s not wheelchair friendly. They want to eventually move back to their home once my father is able to regain his mobility.
Do you think it could get sold without being cleared out? Depending on their mortgage amount of course.
I would try to get that house cleared out even it’s by you for the cheapest price possible. Then sell that house since it sounds like there are tons of damages and you don’t have money to put into it. And maybe come to an agreement with your parents whether it’s them picking up more bills or paying off some of your debt since they do live with you.
That house is basically just paying for an expensive filthy storage unit and it’s not worth it
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some once . But they have not made any progress towards clearing it out. It’s not a job I can do on my own. I’d need at least 2-3 more people.
Well I would come out to your brothers and sisters/ sister and ask them for help. And this might be a bit harsh but you gotta work something out with your parents because I guarantee most of your expenses would be less with your parents living in their own home. But i would tell them how much you are struggling with them living with you. Because it sounds like you have extra rooms you could rent out for market rent In that area and have those Roomate’s pay for utilities aswell. Which could be something that could help you.
Another option too could be to put it on the market and see if you get any cash investor options. You're not going to make as much on the home but it will at least clear up funds
Thank you for the feedback. I hadn’t considered that.
I would definitely declare bankruptcy. Since you don't want anymore cards.... you can start fresh. Of course, the student loans won't get wiped out. I bought the book "bankruptcy for dummies" years ago. Then I declared BK. That was over 15 years ago. Credit now stellar. No issues with any financing if needed. Yes it took 7 years to build back up. But it's doable and you are a slave to your payments right now. The first sentence in the book is "bk is for a fresh start for people who screwed up"...like you and me! Go read the book at B&N and get started. Best to you!
- I need a complete breakdown of your monthly expenses - What are the interest rates for your debt? - I assume the $1.8k is *after* taxes? - You may have a higher chance of keeping your home since your current on your mortgage with a Chapter 13 bankruptcy (don't want to go down this avenue yet, this is the last resort)
I currently make $25.32 an hour. I work in Human Resources as a Personnel Specialist II. In 2023 my gross income was $67,785.72. Miscellaneous bills: Health insurance $265 Cable & Internet $260 Water $86 Electric $ 185 Home Security $120 Total Debts $34, 861- Credit Card Debt $60,857- Student loan Debt $114, 767 Home Mortgage Loan 0 Personal Loans 0 Auto Loans No late payments on any cards or loans. Mortgage Home purchased in November 2017 $114,767 Amount Owed $132,478 Loan Amount 13% Paid off $837 Minimum Payment $103,000 Estimated home equity Credit Cards Chase- $10,454 Credit limit $10k Percentage Utilized 104% Minimum Payment $332 Card opened 05/29/17 Discover-$8,808 Credit Limit-$13, 800 Percentage Utilized-63% Minimum Payment- $217 Card opened 03/21/19 Citi Card-$6,650 Credit limit $18,000 Percentage Utilized-36% Minimum Payment $211 Card opened-03/19/19 Hancock Whitney-6,400 Credit limit $6,400 Percentage Utilized-100% Minimum Payment $235 Card opened-04/13/17 American Express-$2,297 Credit limit -No limit Percentage Utilized- Minimum Payment-Depends on amount spent per month Card opened-06/24/23 Kohl’s-$226 Credit limit $700 Percentage Utilized-32% Minimum Payment $29 Card opened-10/08/12 Closed Credit Cards as of 09/13/21 SYNCB/TJX (TJMAX)- $4,076 Credit limit-$10,500 Percentage Utilized-38% Minimum Payment $165 SYNCB/Belk Dual Card -$3,004 Credit limit-$7,500 Percentage Utilized-40% Minimum Payment $130 SYNCB/JCPenny -$1,561 Credit limit-$6,000 Percentage Utilized-26% Minimum Payment $74 Student Loans I make income driven payments of $273.45 Dept of ED/Nelnet Owed Original Loan Amount paid off $22,292 $20,500 9% $15,787 $15,375 3% $6,421 $10,250 37% $5,252 $7,500 29% $4,737 $7,154 33% $3,853 $5,500 29% $1,456 $2,352 38% $848 $1,148 26% $211 $346 39%
I hate to say it, but this is not a debt problem -- It's an income problem. Have you job shopped at all? Could you make more somewhere else? Unfortunately, in modern America, that fastest way to a raise is to change employers. Consider it. Maybe get one that will cover insurance for you as well. Absent that, get a second job. You may need that anyway until the debts are knocked out. But as mentioned, bankruptcy won't save you from the student loans. And the only way out of the mortgage is to sell the house.
This is good advice. One additional source of income would be rent from her parents who apparently are holding on to some home that (my guess) her siblings are living in. If you got a new job making even $85k or $90k and your parents paid your mortgage, your debt could be eliminated quite quickly.
Bankruptcy isn't going to wipe out student loans. You will have to pay back a good portion of the credit card. Bankruptcy does not just wipe out your debt they require you to pay back on a court approved schedule.
Mine wiped out everything except student loan debt.
Did you not have to make payments for the 3 years. Yes it wipes.oit some but you still pay during the time you are in.
Did you not have to make payments for the 3 years. Yes it wipes.oit some but you still pay during the time you are in.
I didn’t have to pay a thing. Student loans weren’t discharged but I did have them deferred.
Ch 7 is unusual you must have had next to no income. Typically 13 will be required and you would have to pay
I’m trying to get the $36k in credit cards wiped out.
1. You are going to have to get a second job or a third part-time job that does not interfere with your primary job. Or seek a higher paying job. Growing up, I had 3 different part-time jobs at the same time and worked almost every day 365 days a year for 10 years, so it can be done. 2. [Consolidate your loans.](https://www.nerdwallet.com/m/loans/personal-loans/credit-card-consolidation-loans) 3. Ask your parents about selling items from their house. One of your jobs would be slowly clearing out your parents' home. Pick one small space at a time. Even if you just spent one hour every other day, in a two week period you worked 7 hrs. 4. Seek government assistance in student loans. If you have already done, seek again. 5. Look at your budget again and cut out any unnecessary expenses like coffee, fast food, or going out for lunch. 6. Remember to do something fun that doesn't require a lot of cash, walking club, hobby, or just socialize w/ friends. 7. Recognize this is not a quick fix. Most certainly 5 years or more. 8. Finally, avoid Bankruptcy, it's more than 7 years affecting your credit score and life. Good luck
That's not going to fully happen. You can afford to pay them back so they will require you do so at least partially
"selling items on Mercari and Poshmark." You shouldn't have things to sell, unless it explains how you are still overspending. Have you looked for a second job? A better job? Both? Can you do some freelance? Go do sports announcer, for instance, or at a fair event. Auctions. Have you shopped for ACA health? It seem like you would qualify for a premium subsidy. Are you claiming your parents in your taxes? School loan debt can be private, government, both?
The items I’m selling on Mercari and Poshmark are from my bad past spending habits. I’m currently looking for another full time job ideally a wfh position. However I’m open to anything that pays more. I have Blue Cross and Blue shield. I pay $250 a month. I’m currently not claiming my parents on my taxes.
Are you receiving help for your spending habit?
Yes, I cut up all of my credit cards except for the 3 I keep for emergencies. I deleted all shopping apps, unsubscribed to shopping emails, and catalogs. When I do shop for anything I pay in cash to decrease my chances of going over budget. I currently see a psychiatrist and I’m on medication. I’d been in therapy for 4 years. I stopped therapy last year due to the cost. My insurance doesn’t cover it and even with some financial assistance it still was pricey. There are times where I still struggle. I grew up in an hoarded home. I’m willing to continue getting any treatment and counsel for my spending issues.
This seems pretty easy. Sell the house and pay off the debt. And get a higher paying job.
Apartment and home rental prices cost more than my current mortgage.
I agree. No way selling your house makes sense. Your parents house sounds like a freakin albatross at this point though. If that stuff has been sitting in their home untouched for 5 years, just through it all away and sell or rent it. Don't go through it. Except for family photos, just put it in a dumpster. Freeing up that house quickly is way more valuable monetarily and for your sanity than anything that could possibly be recovered. (I have a light hoarder streak myself and my wife has shown me that I was way overvaluing my stuff compared to the freedom of decluttering.)
Yes, I agree. I’d like for my parents to just sell the home. Even if cleaned up it doesn’t fit their needs.
You need a higher paying job, you’re almost making minimum wage with 2 college degrees
$67,000 is minimum wage? Unfortunately in Alabama minimum wage is under $8 an hour.
I wouldn’t sell the house. You have many options and that’s the last thing I think I’d do. You could take some equity out of the house. Before doing this I’d try to get a personal from a local trusted credit union and get a lower apr on those.
Did you change jobs this year? Or do you work over time? I am confused on your hourly wage if you made $67K last year...
I got a little raise. I’m making $25.32 a hour.
Which is less than $67k....are you bringing in income in another way? Outside of the $1k Mercaei stuff? $25.32 x 40 hours = $10128 x 52 weeks = $52665.60 Before taxes etc of course. Can you clarify? Easier to help if we know what we're working with.
I had less taxes withheld. I ended up owing the IRS.
I agree with others that one sure thing you need to look into, is finding another job. Look into HR positions, if that’s your chosen field, with manufacturing companies - corporate or in the manufacturing plant sites. Across a variety of industries. Just one suggestion. Alabama seems to have a good deal of it. Companies are always lookin g for more women for their supply chain operations. Have you always been in HR?
No, I’ve worked in libraries before.
Mcdonalds pays $20 / hour in some places at least
I know it’s not easy. I feel so mean for saying it. But this is an income problem. You have to increase your income. Not $1,000 a year selling random things. Like two full time jobs increase your income. And I know it’s hard. I’ve been applying to jobs for months and barely hear back. But that’s the only way you’re going to be able to dig yourself out of this. Student loans would still be there after bankruptcy. This situation isn’t that bad. Imagine if you really could double your income. You could pay off those credit cards in a year. Can you tell us more about your home loan? How long is left on the loan? What’s the interest rate? Perhaps getting those credit card balances into a personal loan at a lower interest rate would be beneficial.
I currently make $25.32 an hour. I work in Human Resources as a Personnel Specialist II. In 2023 my gross income was $67,785.72. Miscellaneous bills: Health insurance $265 Cable & Internet $260 Water $86 Electric $ 185 Home Security $120 Total Debts $34, 861- Credit Card Debt $60,857- Student loan Debt $114, 767 Home Mortgage Loan 0 Personal Loans 0 Auto Loans No late payments on any cards or loans. Mortgage Home purchased in November 2017 $114,767 Amount Owed $132,478 Loan Amount 13% Paid off $837 Minimum Payment $103,000 Estimated home equity Credit Cards Chase- $10,454 Credit limit $10k Percentage Utilized 104% Minimum Payment $332 Card opened 05/29/17 Discover-$8,808 Credit Limit-$13, 800 Percentage Utilized-63% Minimum Payment- $217 Card opened 03/21/19 Citi Card-$6,650 Credit limit $18,000 Percentage Utilized-36% Minimum Payment $211 Card opened-03/19/19 Hancock Whitney-6,400 Credit limit $6,400 Percentage Utilized-100% Minimum Payment $235 Card opened-04/13/17 American Express-$2,297 Credit limit -No limit Percentage Utilized- Minimum Payment-Depends on amount spent per month Card opened-06/24/23 Kohl’s-$226 Credit limit $700 Percentage Utilized-32% Minimum Payment $29 Card opened-10/08/12 Closed Credit Cards as of 09/13/21 SYNCB/TJX (TJMAX)- $4,076 Credit limit-$10,500 Percentage Utilized-38% Minimum Payment $165 SYNCB/Belk Dual Card -$3,004 Credit limit-$7,500 Percentage Utilized-40% Minimum Payment $130 SYNCB/JCPenny -$1,561 Credit limit-$6,000 Percentage Utilized-26% Minimum Payment $74 Student Loans I make income driven payments of $273.45 Dept of ED/Nelnet Owed Original Loan Amount paid off $22,292 $20,500 9% $15,787 $15,375 3% $6,421 $10,250 37% $5,252 $7,500 29% $4,737 $7,154 33% $3,853 $5,500 29% $1,456 $2,352 38% $848 $1,148 26% $211 $346 39%
I'm going to have to make this into multiple comments, I apologize. I've run some numbers and there are ways to financial freedom without bankruptcy, but it's going to hurt. Here's what I've got: Total monthly income after taxes: \~$**3600** Credit Card Debt |Credit Card|Total Amount Owed| |:-|:-| |Chase|10,454| |Discover|8,808| |Citi Card|6,650| |Hancock Whitney|6,400| |American Express|2,297| |Kohl's|226| |SYNCB/TJX|4,076| |SYNCB/Belk Dual Card|3,004| |SYNC/JCPenny|1,561| Total Credit Card Debt: **$43,476** Monthly Bills |Bill Name|Bill Amount| |:-|:-| |Health Insurance|265| |Cable & Internet|260| |Water|86| |Electric|185| |Home Security|120| Total Monthly Bill Amount: **$916**
Thank you for the feedback it’s much appreciated!
**$3,600 - $916 = $2,684** left over Credit Card Min. Payment |Credit Card|Min. Payment Amt| |:-|:-| |Chase|332| |Discover|217| |Citi Card|211| |Hancock Whitney|235| |American Express|???| |Kohl's|29| |SYNCB/TJX|165| |SYNCB/Belk Dual Card|130| |SYNCB/JCPenny|74| Total known credit card min. payment: **$1,393** **$2684 - $1,393 = $1,291** left over for groceries, gas, cell phone bill, car insurance (these were things left out of your breakdown). Every cent of this should be going directly to principles of your debt. No eating out, no movies at the cinema, no extra groceries, no fun. You have to be serious about getting yourself out of this hole you're in...
Thank you for the feedback! My parents pay the cellphone bill, food, car insurance, and cable bill.
First, I highly recommend consolidating your credit card debt so you're not paying 9 different entities with varying interest rates. You can use a company like PDS Debt to help consolidate CC debt into a singular monthly payment, if you qualify - and it doesn't hurt to try and see if you do. Next, I would remove the Cable & Internet, Home Security, and Health Insurance bills - at least in the short term. That money is better spent going towards the principle on your credit card debt. You need to focus on paying directly to principle on your CC debt while you continue making your income driven student loan payments. Once your CC debt is taken care of, use any and all of the money you were spending on your CC debt and pay directly to your student loan principle after making your initial monthly payments. One of your major hindrances here is your gross income. It's simply not enough to pay off your debt in any meaningful amount of time. You can/should look into getting another part time/full time job and use that income SOLELY on paying on your debt. The ONLY other option, and one I recommend as a veteran myself, is giving a look at joining the Armed Forces. Seriously. Either Air Force or Navy. Both branches have high paying jobs, pensions (for your retirement), and since you have degrees - you'll be starting out as an officer, which is higher in the pay scale. They also provide you health/dental/vision at no cost to you. Both branches have higher age cut offs (in the early 40s), so as long as you're able to pass the initial physical/mental exams - you can join either branch for a better paying job, benefits, and the beginnings of some sort of retirement.
Thank you for your feedback! I apologize if the breakdown I posted was confusing. My health insurance is $250 a month. I added it into my monthly bills. Unfortunately I’m pretty sure I don’t qualify to join the military. I had a spinal fusion for scoliosis over 20 years ago. I will check again to see if there’s any chance I could get a waiver. My father is a military veteran as well.
Also please don’t feel mean for any advice you’ve given. I’m very appreciative of the feedback.
You need to create a strict budget, and stick to it. You need to lower your internet/cable by $200, no reason at all on this earth to be paying $260! Then you need a second job, at the very least uber eats or something. If you’re able to throw an extra $1000 a month towards debts you can get yourself out of this mess in 3-5 years. Then you’d have a significantly better life. I highly recommend looking up Caleb Hammer on YouTube. He sits down with people that are in similar situations as yours, points out how it’s usually a spending problem, then creates a strict budget and plan for them. Can be motivating.
Thank you!
If I’m doing my math right, your bills are $2800 a month. Add $400 for groceries, and maybe $50 a month on gas, your expenses are about $3300 per month, and you take home $3600 per month? What is your mortgage payment, you said your parents are paying that? Yeah your current income basically only allows for a few extra bucks each month, if you can find a way to take home an extra $250 weekly, you can pay off that 36k of credit card debt in 3 years. After you do that, your monthly expenses will drop by $1800 I think- which will give you a lot more breathing room, and ability to pay off your student loans sooner than later.
I pay my mortgage of $837. My parents pay cable/internet, cellphone, car insurance, and food.
How about your parents kick in to have the home they own but don’t live in, professionally cleaned out so it be can be sold or rented - something done with it?! That seems like a legitimate emergency expense to be covered! They’re right now paying a mortgage on essentially a storage unit! I don’t think bankruptcy is going to solve your problem. But a bankruptcy attorney, multiple of them consulted, will give you a clearer picture and they don’t charge for the consult.
I’m looking into estimates for a cleaning company. Before Covid a company quoted me $10k but they’d have everything done in 2-3 days and dispose of any garbage.
Perfect. It sounds like doing it yourself is going to take years, and frankly you need to be working on your second job instead of that. That service is worth 10 grand imo (and if they died, you'd have to do it tomorrow, or sell the house as an as-is sale). Your parents can borrow that money and pay it off with the sale of the house. That will greatly mitigate their problem of being on a fixed income. You dad can have all the cable channels he wants at that point! Other than that, I would cancel the security service unless it is recovering 1440 in stolen packages a year. If your parents are getting the main benefit and can't live without it, they should be paying for it. If they can't afford it, tough. You can't afford it either. Good for you for keeping on digging yourself out of the credit card hole. I agree that a bankruptcy consultation is worth a look if you're having trouble increasing your income with a second job. Even at a 1k cash surplus a month, that's still a long time to get back to zero. My other concern is that with your finances intertwined, if your parents passed away or have a financial crisis, you're hosed, because they are meeting some of your your basic expenses. I am concerned that the long term plan of getting out of debt is gonna be too long term. Lastly, not to be that forum guy, but at some point in your life, you are gonna need to start saving for retirement. Waiting 4 or 5+ years in cc debt limbo ain't socking away money for the future. Starting at age 43 isn't the worst thing I have ever heard, but if you could declare bankruptcy this year (even if you end up on a payment plan) and assemble an emergency fund and get to saving, that's better. Good luck and keep us updated!
It’s not everyone’s favorite answer here, but read Total Money Makeover by Dave Ramsey. You’re a perfect candidate.
Rent-if your parents weren’t living with you they’d have to pay rent-are they living with you for free? Even if they paid half the market rate you’d have some extra money.more people = more wear & tear on house,more electricity,more water,etc. do they qualify for low income housing or a subsidy?
My parents pay my car insurance, cellphone, cable/ internet, food, and any unforeseen emergency bills. I don’t know if they qualify for a subsidy they are still paying on their own mortgage. They currently do not live in their home due to it not being handicap compliant and needing a lot of work. It’s a hoarded home.
They need to sell it and pay you rent instead of paying a mortgage for nothing.
I agree. I’ve been trying for years and even got some help from my sister with cleaning it up some. But they have not made any progress towards clearing it out.
Yes-this exactly-rent is expensive as well as having 2 more people wear and tear,utilities,etc.
I filed for bankruptcy 20 or so years ago. Got to keep the house. One of the best decisions I ever made. If I hadn’t done it I would still be paying off that debt today.
How long did it affect your credit? Were there any drawbacks that you encountered that you didn’t expect? Thank you for your feedback!
I don’t remember much about the actual process itself because it was done by my POA while I was serving overseas. My credit was abysmal for a while. I got credit card offers within a few months, but they were really small limits, like 3-500 dollars. It was on my credit report for years but as far as the score, I wouldn’t know. My credit was shot by then anyway. I bought my current house about 10 years at the best interest rate that was available at the time. I have about $35k in available credit now and my score is around 740
I got divorced, and filed bankruptcy about a year later. I owned my car, and had a mortgage. No student loans. I did not have as much CC debt as you, but I couldn’t afford it (no alimony and I was taking college courses paid for by my employer). I owned my car, so I didn’t need to worry about a car loan for a while. I already had a mortgage. I had a zero balance CC that I kept open but didn’t use. The industry I worked in checked credit, so I had to write a letter of explanation for my filing. It wasn’t due to anything egregious (just having a crappy ex), so it wasn’t an issue with my employer. If you’re now spending within your means an don’t anticipate making any job or financial changes, filing could be the way to get a fresh start. I was a debt collector for several years, and recommended filing to some of our customers. You can work yourself to death to pay things off, or you can file and live within your means. Not everyone who files is a deadbeat.
Thank you for your feedback! I know I owe a lot in student loans but the credit card debt is what really stresses me out. Idk if that the right mindset but it seems like everyone has student loans. I’ve also applied for loan forgiveness. It may not look like it but I’ve really tried to pay stuff off and changed my spending habits. I feel like I’m only now just now making a dent. I don’t want another 4-5 years to pass and I’m still working an extra job to pay on the debt. I know I didn’t get into this mess overnight. I’m looking for a higher paying full time job and a part time job. The full time job would possibly be a government job but not for certain. I know that people I currently work with have filed bankruptcy and I haven’t heard anything about it.
Take out a home equity loan and consolidate your debt it should be less than what you’re paying. Not ideal but that’s a solution you can live with.
Any equity in your home? Have you tried calling your credit card companies to see if they have options? Check to see if your parents are getting all the benefits they deserve also. It’s possible to bounce back.
Yes, I need to check my equity again but it’s $103k. I haven’t recently tried calling my credit card companies. I’m working to make sure my parents are getting all the benefits they can. My father is an Army Veteran. We are working on getting my dad 100% disability benefits as apposed to his current 50%. The VA helps with some things but it’s been a battle for the last 7 years to get things for his care. It took 3 years to get a wheelchair and we even had a staff member steal my father’s cell phone. I live in Alabama and our local VA has only recently gotten a bit better.
Get your day to buy or refi the house into a va loan. I would get as much liquidity as possible. The cc companies will more than likely work with you. Good luck!
My suggestion is to get the credit card debt down as quickly as possible. Since you bought your home in 2017, I am assuming the mortgage rate is low. If you are able to get a home equity line of credit against your home, you can use that to pay down your credit card debt. The HELOC rates should be about 8% (but definitely double check the APR etc.). If the HELOC interest rate is lower than your credit card APR (which should be the case), that may be a strategy.
The credit card debt is my biggest concern. I applied for a HELOC line of credit 2 years ago and was denied. I will try again. I’d think the HELOC rate would be lower since some of my credit card interest rates are at 20% +.
You need to create a budget and track your spending. 36k credit card is pretty bad but still doable on a 67k income. You need to figure what are your essential spendings (like home, health, food, transportation) and then throw the rest at the credit card debt. Take a look at Dave Ramsey. His baby step is basically for you. Follow it and get out of debt. The most important thing is to get out of the credit card debt ASAP.
Chase : should be able to put you on a fixed payment plan . Interest could be around 12 percent which is way better than 29 or so . Only caveat is they would close the account and it will hit the credit score . Amex : may put you on a payment plan without closing the account but with temporary hold on transactions. You may want to keep it for emergencies and not enroll in hardship plan . Discover : someone mentioned about .99 hardship plan . You may want to check with them n Whitney : You may want to check if there are any “financial hardships plans “ . Once the interest rates are lower you would be able to free up some money which you could use to pay off the lower amount cards ( debt snow fall method )
Thank you!
DO NOT cancel cards when you pay them off.
You definitely don't need to file for bankruptcy. Not even close. You need to get a part time job waiting tables or sell some shit and pay off these credit cards one at a time smallest to largest and cut them in half until you just have 1 left for emergencies. Once you're not paying 30% interest on 36k in credit debt you'll be fine. The student loans aren't going away with bankruptcy anyway. File for a hardship or income based repayment plan on the student loans and don't even think about canceling your health insurance.
You should talk to an attorney to at least find out what they tell you because not all bankruptcy. Just discharge your debt like they used to. Your student loans, of course, are still gonna be owe And then you can talk to those people that consolidate your debts and look for a nonprofit that they usually reduce the interest and your accounts are closed, and it will hurt your credit, but you may be able to get them paid off quickly as well It wouldn’t hurt to talk with a bankruptcy attorney, and it wouldn’t hurt to talk with one of those debt consolidation places, cause those really are your best options in regardless of what you’re doing your credits not gonna improve for a while
Wow!!! You have a masters and only make 50k? Your student loans are gonna kill you, did your employer help with paying for any of your education? ( hope that biden gives more loan relief?) Is your health insurance included? 36k in cc debt? I understand the student loans, but you gotta hide those cards, maybe get a 2nd job? And work on a promotion where ya gonna make more. Your parents, good for you helping them, but maybe they can contribute more? Help w utilities?
I make $67k. I’m most concerned with the credit card debt. No, my employer didn’t help with paying my education. I’ve applied for student loan forgiveness. My health insurance is $260 a month. I cut up all my cards but the 3 emergency cards. I’m looking for a higher paying job and a part time job. I’ve talked with them about paying more I’m hoping they can contribute $400 a month that would be at least half my mortgage.
You have options. None are going to be easy. You can work on reducing your expenses ( sounds like you have already started that) or make more money. Finding a new job is not easy. 2 things that I know work. DoorDash and Air Force national guard.
Make a budget and look into ways to increase income. Focus on the credit cards first. This could be done without bankruptcy, also bankruptcy would not get rid of the student debt
Things look bleak when money is tight for extended periods of time, it gets exhausting and feels hopeless, like you’re robbing Peter to pay Paul and there’s no end. I get it but bankruptcy will seriously limit your options in the future and is a last resort. A few options that might be worth exploring before bankruptcy, you may just have a cash flow problem. In which case you need to increase cash flow coming in (new job, extra job, new position w/ raise) and/or decrease cash going out (refinance, pause payments due to hardship). Can you put your student loans into deferment for a year, get a part time job and knock out the credit card debt? Not an ideal situation but interest rates on credit cards are undoubtedly higher than the student loan. Or how much equity do you have in the house? Is there an option to take a $36k HELOC to pay credit card debt? Again, interest rates are high right now but still lower than your CC.
Yes, it’s been about 4 years since I decided to focus on paying my debt and making major lifestyle changes. I’m completely ashamed at what I’ve done. I definitely feel hopeless and like my family might be better off without me since I have good life insurance policy. I’m looking for a new job. I live in Alabama. I can put my loans in deferment I’ve never tried that. I have about $104k in equity. It could be more. I applied for a HELOC loan about 2 years ago and was denied. I can try again. My main focus is my credit card debt. Thank you for your advice.
Sounds like there’s a lot going on between the cash flow issues and potentially some family dynamics. Does your employer offer an Employee Assistance Program? Your comment about your family being better off without you is a bit concerning and it helps to talk through those thoughts.
I can check and see if they do. I see a psychiatrist and take medication. I was seeing a therapist but even with financial assistance it got too expensive. Thank you for your feedback.
Bankruptcy seems to screw you over more than necessary. But you can’t budget your way out of this. (Budgeting and optimising loan rates etc. will help though). And please stop selling stuff as a side hustle. It’s not worth your time. a) Talk to your parents about contributing more. I am sure they can contribute something towards maintaining their living situation (a small rent for example) b) you need more income. Either through a better paying primary job or a side gig (or both). Doordashing and such are options, but since you have a comm degree, I’d assume you can write or film or edit… these are gigs you can take freelance relatively easily and given the right circumstances they can pay decently. The acquisition of new gigs will be a bit more complicated, but the reward might be worth it. c) you still need to optimise your spending/outgoing payments. This will be time-consuming, but you have to do it. d) I just said no selling stuff. However. Do you have a bigger ticket item that you don’t need? That you can get you a few hundred dollars for? I am thinking family heirlooms, that no one cares about… something like that. One of these could get you a small emergency fund. No touching unless it’s an emergency with the house or the car. (Edit: format)
Yes, I do have quite a few family heirlooms that might make me a couple hundred dollars. However they technically are not mine yet. I’d inherit them. I know this is going to sound bad but I’ve thought of gradually sneaking pieces out and selling them. It’s mostly breakables like European dishes, crystal, and figurines. They are stored away and not being used or even seen. I’m thinking maybe an antique shop would be interested.
Don’t steal stuff. Under no circumstances sell stuff that you do not own. That’s theft. Everything has to be above board. Even more so, because you’re dealing with family. Trust me don’t do it! It’s just a thing I have noticed. People our age usually have already accumulated some stuff that they don’t need or even want. The watch you bought but don’t wear, some great aunts old jewellery… stuff like that. If you don’t, then you don’t. And it’s not really worth selling the smaller stuff.
I just want to put this into perspective. $36000, paying $50 per month, at 29% interest becomes $123,281 in 5 years. In 10, $435,075. In 20, $5.5 million. In 25, $19.75 million. Any of us would kill for 29% interest, and you're giving it away. The first thing you need to do is cut up your credit cards and never use them again. You cannot handle these. Frankly, go find Dave Ramsay and join his cult. When you've eliminated your debt, then come back to this sub and ask what to do now. Don't buy anything from Dave except his book, and don't get into bed with one of his financial planners, but the man's great for someone who is addicted to credit cards.
Consider credit consolidation first, credit reduction second, and chapter 11, then 7. Homestead your house if you have not done so. Buy a paperback book on bankruptcy in your state so you know your state and federal laws and avoid charges of fraud. Talk with your parents about getting on any programs that will help with the bills that you may qualify for as a household. Make sure each is able to cover their own food and utility costs from their pensions. When you have done all that you will have learned a lot and are well on your way to managing your budget and your debt load and your path will become clear.
How much is your house note? Utilities? Car insurance? You aren’t making bad money. Do you get your nails done? But coffee every morning? Go out t eat all the time? This should be fixable.
My parents pay my car insurance. I don’t get my nails or hair done, I limit going out to eat to once every 3 months, I bring all my drinks and meals from home.
Yikes. You’re cutting corners. Don’t know how you do it on one income, though! Are you willing to put up with a spouse? I couldn’t make it without mine.
I’m willing to put up with a spouse but idk if I could get one given my financial situation. The dating pool isn’t good to say the least.
I currently make $25.32 an hour. I work in Human Resources as a Personnel Specialist II. In 2023 my gross income was $67,785.72. Miscellaneous bills: Health insurance $265 Cable & Internet $260 Water $86 Electric $ 185 Home Security $120 Total Debts $34, 861- Credit Card Debt $60,857- Student loan Debt $114, 767 Home Mortgage Loan 0 Personal Loans 0 Auto Loans No late payments on any cards or loans. Mortgage Home purchased in November 2017 $114,767 Amount Owed $132,478 Loan Amount 13% Paid off $837 Minimum Payment $103,000 Estimated home equity Credit Cards Chase- $10,454 Credit limit $10k Percentage Utilized 104% Minimum Payment $332 Card opened 05/29/17 Discover-$8,808 Credit Limit-$13, 800 Percentage Utilized-63% Minimum Payment- $217 Card opened 03/21/19 Citi Card-$6,650 Credit limit $18,000 Percentage Utilized-36% Minimum Payment $211 Card opened-03/19/19 Hancock Whitney-6,400 Credit limit $6,400 Percentage Utilized-100% Minimum Payment $235 Card opened-04/13/17 American Express-$2,297 Credit limit -No limit Percentage Utilized- Minimum Payment-Depends on amount spent per month Card opened-06/24/23 Kohl’s-$226 Credit limit $700 Percentage Utilized-32% Minimum Payment $29 Card opened-10/08/12 Closed Credit Cards as of 09/13/21 SYNCB/TJX (TJMAX)- $4,076 Credit limit-$10,500 Percentage Utilized-38% Minimum Payment $165 SYNCB/Belk Dual Card -$3,004 Credit limit-$7,500 Percentage Utilized-40% Minimum Payment $130 SYNCB/JCPenny -$1,561 Credit limit-$6,000 Percentage Utilized-26% Minimum Payment $74 Student Loans I make income driven payments of $273.45 Dept of ED/Nelnet Owed Original Loan Amount paid off $22,292 $20,500 9% $15,787 $15,375 3% $6,421 $10,250 37% $5,252 $7,500 29% $4,737 $7,154 33% $3,853 $5,500 29% $1,456 $2,352 38% $848 $1,148 26% $211 $346 39%
Are you able to cut your cable and only use internet in a lower price? 260 sounds a lot ( I pay 160 for internet crying because it’s the only cable internet in my area) .
I’m willing to do it. My dad is the one unwilling. He’s bed ridden and cable is really his only entertainment.
Your job title makes it sound like you have a government job. Take a pension loan and pay off the credit cards.
I’m a government contractor. I don’t have a government job. I’m trying to get one.
I don’t think you’d get out of your student loans with bankruptcy. It’s nice your parents are buying food, but you may need to ask them to pay something on the house note. I declared bankruptcy once. I started a business, got in trouble, couldn’t run the business, couldn’t sell the building, boom. Ten years of bad credit. Plus it was humiliating. I don’t recommend it. You may be able to consolidate those loans and get a lower note. I would stay off them. You’re making 70K and need to start getting that 401 K match money if you can. I would consolidate credit cards, ask parents to pay some rent, and find extra work if you can.
Your parents own a home but aren’t living there? They need to sell it if they can’t rent it so it’s cash flow positive. And then they can pay you rent and a lot of these issues go away. You don’t need cable and internet should be available for much less than $260 a month. Is the $120 a month on Home Security like an alarm system? Ditch that shit.
My parents down own their home. They have a mortgage. They cannot rent it due to it being a hoarded home and they don’t want to sell it. I agree about the cable. I’d like to cancel it. They pay that $260. My neighborhood only has AT&T and WOW Internet/Cable. Yes, the $120 is for ADT/Ring. Unfortunately I’ve had someone steal packages from my doorstep and neighbors have had their home broken into. The 911 feature is also helpful due to my dad’s medical condition.
Want has nothing to do with it. People don’t get to cry that they’re “on a fixed income” while paying for a house that’s not being used. Unless you’re getting $1440 a year in stolen packages then it’s not needed.
I would cut out cable and internet ($260) and home security ($120) straightaway. No eating out if you are doing it. That should save you at least $400-500 every month that you can start paying towards your credit card debts. Start buying clothes from goodwill if you absolutely have to. Can you rent out a room in your house? Find a second job - server on the weekends, or Publix or Kroger or target, Uber, DoorDash etc. You can also try contacting the elder community services in your area to see if they can help with getting someone to clean up the hoarded house. You can mention that it’s your parent’s house but they cannot live there and you cannot host them anymore.
My home isn’t big enough to rent a room to someone. I’m looking into getting a 2nd job. Thank you!
U have a masters and we make the same pay, while I never even sat foot in a college classroom I think u went wrong somewhere
If you don’t mind me asking what job/industry do you work in?
I literally am just a security officer for corporate business. So corporate security officer
Thank you for your reply.
No problem I didn’t mean to come off rude in my original comment. Although I didn’t need schooling I did need a good amount of certifications. But it only took me about 10 hours instead of 4-6 years of school.
If the student loans are federally backed, they will not be discharged in bankruptcy. I have several friends that take advantage of federal loan forgiveness programs (I was a Paramedic and had my loans paid off before these programs started) https://files.consumerfinance.gov/f/documents/cfpb_guide-for-first-responders-with-student-debt.pdf
the student loan would remain after bankruptcy... only thing I was left with
The huuuuuuge red flag here is that you’re hemorrhaging money monthly and according to the expenses you’ve described, you make more than enough. So bankruptcy is not going to help you even slightly, because you still don’t understand the spending problems that you have. You gotta figure out where you’re spending all your money or else you’re just going to start racking up your debt all over again. Admit you have a problem and address it before you do anything else.
no feedback other than good luck to you, and thanks for taking care of your parents.
Thank you!
You have a masters and pull in. A gross salary of sub 80k? Your problem isn't solved by bankruptcy, it's you don't earn enough gorn the cost ofn your degrees.
How my brother got out of his depts. College and all. Had family and all. Not sure if all that still works. Likely not. Worth checking on.
Probably going to need legal advice for this one. I’m not sure if you can default on student loan debt. I think the big thing to know for bankruptcy is that it takes your credit - so big purchases are near impossible. (Such as a car). So you may only be wiping out your credit card debt. Is your health insurance worth it? If it’s just for you, and you are low risk, it might be good to not have insurance and pocket the money and pay for medical visits out of pocket. (Assuming you are low-risk)
I could file deferments on my student loans. I’ve also applied for student loan forgiveness. My main focus is wiping the credit card debt. My health insurance is $260 a month. I currently don’t have any major health problems but I do have a family history of multiple cancers and heart disease.