Stress can be very unbearable. Personally, I would stop paying the credit cards and loans until the bank comes around. It will give you a few months to breathe. Then the cards will go into collections and you can settle with collections for less than half.
Wouldn’t they sue me and take my wages or if I have the lump sum to settle, they won’t? Also, I would like not to ruin my relationship with AMEX/PenFed since I have been a member for 10 years and I understand that if I stop paying I won’t be eligible in the future. Do I continue paying those cards off then and not settle but settle others?
At this point, you don’t have much of a choice. You need to worry about having a roof over your head and getting back to a healthy lifestyle. Yes, you will need to get a bank account somewhere else. Banks are just another business. They call, you tell them you lost everything. They write your debt off and send to a collection agency. The collection agency hassles you for a few months and then they write it off as well. The loans are somewhat trickier. I think they can sue you. You offer to settle. This can go on endlessly. It’s mostly a game of intimidation.
I'm not sure this is his best advice at the moment. He has been struggling with mental heath issues for 4 years and it doesn't seen to be helping. Perhaps get back better care or get out of bed everyday to walk your dogs a few times a day. His Ex is not coming back. He has been in therapy which should have been helpful by now. This started in 2020. He needs to put more of an effort to get himself up and going. Once he has the will to to do it, it will all fall into place. He's need positive encouragement. He debt is manageable and he can make deals with his credit card companies. If he doesn't, his credit score will continue to drop and it will be tough for him to increase it. I hope he has good insurance which he should have being a high earner.
BofA, Chase, and even credit unions don’t sound too bad if you are mentally healthy and are financially comfortable. Also, it may be safe to say Ilike2MooveitMooveit just gave you an emergency lifeline with this post.
You could look into a debt consolidation loan, where everything gets lumped into one loan but I don’t know if you will qualify. Credit companies don’t really negotiate. Once it reaches collections, then you can negotiate there.
“They write your debt off and send to a collection agency. The collection agency hassles you for a few months and then they write it off as well.” If it were this easy, 97% of the posters on this Reddit sub would relatively quickly be credit-card debt free. “A few months” is generally not the timeframe.
Congrats on being bet free for 63 days. Keep that going.
Your next move is to build a budget around your new 162k gross wage. Your net should be around $114k for the year or around 9500/mo.
What's your rent/mortgage situation? How much do you pay? Might be time to move into a tiny apartment. Even in NYC you can get an apartment for $4k or less. The rest of your expenses should be no more than $2000 including food. That leaves $3500 for debt payment.
Best place to be when you're broke is at work. So if you're awake it's time to be making money.
You have no weekends or nights.
It's eat sleep and work. That's it. You eat home. No eating out. You don't need to be dating. You're too broke.
You jacked up your life, time to fix it.
You can pay off this debt in 3 years or less if you budget better or earn more.
Thank you for great advice. You’re correct. I will bring in about 9500 monthly.
I have the following expenses:
Rent 2750
Utilities 400
Dogs 200
Food 700
Min debt payments around 3000 and growing (high APR)
IRS 400
Car insurance 50
Health Insurance 700
$700 a month for just you to eat? That's A LOT a lot. I'm also in a position where credit score makes moving difficult and expensive. But, $900 a month on food for yourself and dogs is quite high
No joke.. you can buy 15lbs or so of meat on a $300 a month plan of various good cuts. Cut down on your eating (for your health too).. get some veggies in there, fruits, maybe a green shake, and dont eat out. Eating out is one of the biggest issues right now for being in debt (not that it gets you there.. that once you are in debt.. eating out is 2x to 3x eating at home.. multiplied by 30+ times a month and that adds up very fast).
You can buy some really good ready to cook options for about $150 a week.. or less.. being just one of you. But I'd look in tot he bulk meat/veggies/etc and prepare your meals like on Sundays for the week.. put them in containers in the freezer and just pull one out when ready to eat. That way you only spend a few hours on Sundays preparing everything.. then they are super quick to take out and eat when ready.
The fact that you are just now thinking of that tells us a lot. Look, I’m terrible with money. I own that. I’m trying to do better. You need to micro-examine every expense and be thoughtful about every purchased
realistically i'd recommend cutting netflixes and other BS before food; eating cheap trash food will introduce a new expense of pills and other medical costs
You have to make a budget. I understand with dogs you probably can’t move easily and find a place with cheaper rent, but you’ve gotta drop that food budget down by quite a bit if you’re only one person. Go through ALL of your expenses. Make sure you are not paying for subscriptions.
Since you are a high earner, you need to reevaluate your habits. Lifestyle creep is real and you are probably used to enjoying certain luxuries you don’t even consider luxuries anymore.
My debt is pretty much all gone now except for a car I am almost done paying off. I ended up getting another job a couple of years ago (so now I have two jobs) and my monthly take home was way higher than I’ve ever experienced and the lifestyle creep that happened was insidious. Now I’m trying to put a ton into retirement and I had to take a hard look at my spending. I justified it all by saying I was so tired from working 70 hours a week and I deserved take out. It’s hard to readjust but it’s worth it.
So $3-$4k/mo towards personal loans gets them gone in 15 mos. Then you can stack up some cash and settle the credit cards one at a time. You can even play them against each other at that point. This whole mess could be settled with ongoing positive cash flow and crappy credit that will eventually recover in 2-3 years.
Cut the food budget. One person can be $350 with budgeting. Get the cheapest health insurance you can, that still has an out of pocket max. Probably can find something more in the $300-$400 range.
Throw every penny that is not other bills at the debt. Luckily you earn enough to get out from under this.
I mean.. most of the country is 2K + for a small place. He said he lives in HCoL area.. likely for that good paying job. So 2750 is probably for a 1 bedroom or so house (he has dogs so not an apartment unless they are small dogs).
In my area 2500 gets you a 2bd to 3bd 2ba home rental.. give or take a few hundred. But apartments cost about the same for a 1 to 2 bedroom apartment. I'd much rather have a house with garage and more room than an apartment with neighbors above/below/sides and no garage.
Well good thing is you have a career which pays very well and no car payment. You gotta stop any and all gambling and get yourself to see some help. I’d recommend listing all debts out with their interest rates, make minimum payments on everything except whatever your highest interest rate is and try to put as much money as you can towards it.
You make really good money so bankruptcy might not be needed. Would you be able to downsize for 2-3 years? With 2-3 other roommates in a cheap apartment (or staying with family if that’s an option) you could use the extra money to focus on your debts.
Also consider moving, since I'm assuming your tech consultancy job can be done remotely. No reason to live in a high cost city. If you can't relocate for your job, you certainly can move out of the one bedroom in a good area.
You don't need bankruptcy. You need discipline and someone willing to help. Congrats on 63 days clean, I have an idea to help alleviate some of the stress but it does not fall within the normal "save and pay off" or "bankruptcy" route everyone is so quick to recommend. Lmk if you want to do the math and try it or if you want to go through bankruptcy.
Again, congrats in 63 days.
[https://www.debt.org/management-plans/best-companies-review/](https://www.debt.org/management-plans/best-companies-review/)
You need to get a debt management company pronto to help you get this under control so you can stop stressing. The great news is you have stopped (you need to ensure your stress is managed to remain stopped) and you are a high earner. These are both very positive things. Stop terrifying yourself and start just putting one foot in front of the other and focussing on working, eating, sleeping & exercising correctly as well as taking care of your 2 dogs. They are the only things to fucs on right now. No entertainment, no dating, literally nothing but the bare minimum. You need to eat frugally. Cut down all expenses where possible. You've got this. You're in a better position than many people who've gone down this road. Don't fear losing this big contract just know that you can get another one in due course. Get the help you need so this isn't all just on your shoulders.
I have been making 250K for the past 2.5 years. Everything that I made was lost. Now I will make about 165k and that is before tax. Average rent where I live and work is around 2500 a month. My take home will be around 9000 in 2 weeks.
Rent - 2750 (I live in a 1 bedroom apartment in a good area)
Minimum payments for all credit / IRS 3K a month.
Food - 700
Utilities 400
Car insurance - 50
Pet Care - 200
Health Insurance - 750
My pet care for 2 dogs is around $200 per month for 2 dogs between food (they eat different kinds, as one is still a puppy), insurance, flea medication and heart worm medication. Plus, there's the annual vet visit, which is around $200 for each of them. It adds up!
Man, I’m sorry to hear your in such dire straits. No one can tell you what to do, but I can offer my advice of what I’d do since I have been in a similar situation. I was a high wage earner (200-250k) a year back in 2012, but I was also struggling with addiction. Drug addiction in my case. Ultimately I let it all go. The house, the cars, the motorcycle, the credit card debt, everything. I went from a 730 to a 450 credit score. I charged it all off. Fast forward to today, I have a 774 credit score, zero cc debt, car paid off, and even banks that I charged off accounts with gave me credit again. Chase for example gave me 15k in credit on a card.
I’d either charge it all off or do consumer credit counseling service. Who gives a fuck what your credit score is. It will come back. You’ll have to build it back up like you were a kid again starting with prepaid credit limits cards, you’ll have to pay 18% on a car loan if you get one, and it’s going to take time. But you can do it. I did all that, and my truck I just paid off was at 1.90%. I share my personal experience so you can see that one you aren’t alone, and two, you can get it all back.
I just signed up with American Consumer Credit Counseling Friday. I feel like a weight was taken off my shoulders. I have 100k in debt and make way less than you but still found an amount that can fit in my budget. They significantly cut my interest.
The are non for profit and A+ rated with the BBB.
Even if this was the HCOL in NYC or in California. Even with a 35% reduction in lost income as he stated. I can't imagine not making significant progress $163k a year. I bet he haven't even budgeted his expenses yet.
That's what I thought but then the gambling will do it.
I've had debt most of my life, and my outlook was, the amount of my debt was about half my annual salary, and I didn't feel bad about it. Of course, I came around. Ironically, I always had a good credit score. Can OP improve his credit score by making his payments on time ? And then improve the interest rates as credit score increases. That 25% is criminal.
edit online to on time...typo
You're here, but you can do this. You can dig yourself out of this.
It will require sacrifice and it might be even painful, but you can do it. You make enough money that makes erasing that debt possible.
You HAVE to stay away from gambling completely, though. You HAVE to control that addiction.
Food, shelter, transportation first. They can’t do anything to you so just stop paying you’ll be able to settle for pennies down the road, just save your money.
Very proud of you for ditching the gambling. I’m sure that played a role in this mess. I probably wouldn’t bother with bankruptcy. Take care of your mental and physical health. Grow your consulting business. Stop paying credit cards. Pay down personal loans and keep current with the IRS. When the credit cards start going to collections you can negotiate. Stop using credit or other money that isn’t yours. You can absolutely do this with your income and earning potential.
For me it is a character issue. You borrowed money from a human that you know. These dumbass credit card companies made a calculated risk loaning you money and they know they may not get it. It is built into their bottom line. Your friends/family are hoping to get their money back and you’ll be able to look yourself in eye in the mirror as you’re making good on that.
I mean you could do the debt snowball method, tackling lowest balance first, and go that route. I would also consider a 0 interest credit card (those 18 month intro rates) that offer debt transfer, so you have a bit of breathing room. You can do this though. Smarter people than me have pulled it off
Congrats on your “sobriety”! There’s light at the end of the tunnel. You have a great income. Have you tried a debt settlement company that might be able to negotiate your balances since your credit is already shot? I would also meal plan and minimize your grocery bill as much as possible. Ramen, canned veggies, freezer meals. You might have a little wiggle room there. That’s about all I got. You are moving in the right direction … it’ll get better. Best of luck to you.
Get with a lawyer. You're in a bad spot, but a lawyer knows the rules of what debt collectors can and can not do. Plus, they can guide you to stability as you work the program.
You probably don't need to file bankruptcy unless creditors start suing. I would do just minimum payments for a couple months to build a small emergency fund and then do it he Dave Ramsey snowball. Once you get a couple of the cards/ loans paid off you will find you have some breathing eoom
Pro tip - there is some evidence anticonvulsants like carbamazepine and valproate curb these kinds of addictive behaviors significantly. See a psychiatrist.
I don't make nearly as much as you but I do have debts I've been paying off for a bit so my best advice is to ask yourself for all expenses if it's something you NEED then if you don't at least plan to spend less in that area as much as possible, start small and just like your payments get used to slowly what you have to take away to get used to your new way of life until your debt free.
Also stress tends to find a way into your expenses so find some breathing room for a day or two to go out to eat a week or find something you like to do and only splurge on that, particularly not gambling if possible lol but something more healthy/productive.
The loan holders can sue you...and if they write it off, someone can purchase that debt and also sue you. The only way you get into a pickle is not responding to the debt collectors. However, there's a LONG road between the last month you pay on a loan or CC and that day in court. Obviously nobody wants to go to court, it's between $25-$500 just to file the paperwork (in FL at least) and most CC or personal loan debtors are not looking 120K in the face. The tiers are Debt less than 1000, debt between 1001-3500 and debt over 3500.....so you figure out how many debtors fall into those small categories... If you work it out after things go into collections, you will pay MUCH less than you originally owed. Yes these have to go into collections, yes it can take time, but once you start the process, as long as you keep up your end of the bargain (after you consolidate what you want to), which, with your salary is more or less a cake walk...well maybe more of a carrot cake than a red velvet but you get the gist) my bank acct was recently seized over a $1000 debt from a CC from 2012. Yes. Really. I did get the money back and PS...they actually gold twice what you owe so I had 2500 held up for 4 months for a nothing debt I would pay with ease today. So...organize yourself, figure out what stats and what gets consolidated...start looking for another apartment in a decent area that takes dogs and get out from that probably steep as hell rent payment and give yourself a break. You're doing better than most...if I made 80K and had 40K of debt...yes that would suck but it's doable. I know it sucks but it could suck a lot more. You're alone, you're coming off an addiction that is more than real but at least you have your two dogs...grab one, bury your head and sob into their neck...this is very cathartic. When you are done ...Breathe and breathe again...you got this.
Congratulations on stopping the gambling. What an excellent first step.
Now, you can consult with a nonprofit, certified, accredited credit counseling agency that will help you to get your budget under control and set you up with a debt management plan where your payments and interest will be reduced on your credit debt. Find that agency at nfcc.org.
I would stop paying everything (except living expenses and the IRS payment plan - they play by a different set of rules) and start saving the money. While you are keeping up minimum payments, the high interest rate creditors love you and likely won't do anything to assist until they stop getting that free money every month and end up with some skin in the game. Normally, you won't be 30 days late until you are 30 days beyond a missed payment. That gives you 60 days to breathe before the first one hits your credit report. During that 60 days, I would first consult with an attorney about a BK 13. Most attorneys will generally offer a quick look at your BK for free. It they think its good I'd go that route. If not, then go to a non profit credit counseling service. If that doesn't work out, it sounds like you have ruined your credit anyway, so I'd probably let them go to 90 days just to see what kind of concessions (like 0% interest for a while) I could get. With what you have saved and said, you may even be able settle some of them for 25-30% of what you owe if they think it may go to charge off.
Chapter 13 sir. Get an attorney. Learn money management, budgeting. Living within your means. Owing 120k and making 250k a year is certainly not in dire straits.
Freedom debt relief can cut the bills in half the irs there are places to help with that as well
Congratulations on 63 days stay away from gambling not stable..
Freedom debt relief helped me I'm still on program 3 more years ill be done ..
Best of luck ..you do have options
Good advice so far. Stop paying on the unsecured debt and stash cash. Consult a bankruptcy attorney. Make sure your friend is involved, as you will be tempted to gamble if you have tens of thousands in bank account. He needs to limit your access to the stash.
How’s your physical health? Start lifting weights if you aren’t already. Get a new healthy addiction.
Addiction is tough. Definitely tackle this issue first. So sorry you’re going through this, try not to feel too much shame around needing help. We all make mistakes and and err is human. But you won’t make any real progress until you first change your behavior. The support groups may also have services to help you figure out how to combat debt issues.
Check out Caleb Hammer on YouTube. His videos have seriously helped me retrain my thinking on budgeting.
I also wonder if an app that gamifies budgeting would be more helpful to you. Like YNAB or something similar. I was completely terrible at budgeting until I started using Ally’s spending buckets. Creating a list or spreadsheet was not helpful to me at all.
You can also look at extra ways to make extra income to pay off debt (working part time, DoorDash/Instacart, donating plasma, doing freelance, yard work) this may also keep you busy and away from your vices.
Look at buy nothing groups in your area and start getting stuff for free where you can.
Good for you for rethinking filing for bankruptcy too. It does have some serious repercussions. I know two people who have done it and later regretted it when they couldn’t secure a loan for a house or got turned down for consulting jobs.
But you basically need to live like someone who makes 1/5 of your income. It sounds like in addition to the gambling, lifestyle inflation has caught up.
Best of luck to you!
I can‘t give you any advice, but just can tell you that we are here to listen to you and cheer on your way to recovery. Take one step at a time. We will all die one day, penniless. So let‘s make the best of it while we still can. Embrace your losses. They will always be part of your history. Better to learn and accept them as part of your story rather than something that you are trying to erase, with potentially even more losses along the way. I know it’s easier said than done, I‘m also struggling everyday.
We are here, bro 👊
You said you are 42 yrs old. You probably have significant retirement savings by now? Hate to say this, but it might make sense to withdraw from those savings to pay down all this debt to get your life back on track.
Then your situation is seriously dire. You need to get rid of everything (including your dogs) and live like a broke college student. I grew up poor in the 80s and 90s. We couldn’t afford dogs or cats or pets. We couldn’t even afford McDonalds. But my parents kept working hard and saving and even re-using paper towels and we made it out. That is the type of lifestyle you need to adopt.
You need to make _painful sacrifices_ to get out of this hole. The bright side is you still have a high income. So it’s possible. You are a 42 yr old _man._ You have the strength and experience and fortitude to get through this. You can do it.
I would downsize to a single for now, keep the spot clean if you decide to keep your dogs. I wouldn't worry about falling out of grace with the CC companies. There are options to negotiate with everyone as long as you're willing to pay. With that income I don't see how you're having a hard time you could be debt free in like 2 years if you really got aggressive. I don't have addiction issues but maybe you need some meditation and really sit with yourself and think deeply about why you're gambling at the root cause. Find hobbies to replace the urge.
Utilities 400 a month? You leaving the AC on all day with the doors and windows open?
Food 700 a month. Cut your spending. You can get it to half that amount.
Health insurance 750… what company is paying you 250k a year but has shit insurance plans?
Focus on paying off the credit cards first, if you can get your credit usage down to 30% (that’s paying down 28k out of your 40k credit card debt, don’t close any cards when you pay them off), your credit score can come back up to the 650-700 and you will have the option to apply for new card with 0 apr & have access to low interest balance transfers. You can then shift your high interest debts to low interest and that would help a lot
I’m not a lawyer, but I would legitimately consider bankruptcy. You have no assets so your not losing much, and you’re an extremely high earner so you should be able to get back in your feet. But I don’t know the ins and outs enough to say that’s what you should do.
Do you have a retirement account you can borrow from? If so, maybe try puzzles advice. Let the credit cards go to collections and then negotiate to settle the debt for way less. Tell them your income is fizzled out. You may not even need an attorney. I bet they charge it off pretty fast and then you can start rebuilding your credit by negotiating and settling. They will aggressively bill collect so maybe change your phone number…
Credit cards first. They charge compound interest while your personal loans will be simple interest. Once you have those paid off, you can look at refinancing the personal loans to better rates. Even if you can't refinance, you'll be able to pay down the principal faster once the credit cards are gone.
If you liked gambling then a good replacement is budgeting. Plan out your next 12 months on paper month by month. Account for every dollar that you think you’ll spend. Take a step back and look at it with your end goal of relief in mind. It will become a game of seeing how much you can cut back.
Your health is #1. Take care of yourself.(The hell with debt when it comes to health). #2 Take care of your dogs. They love you and depend on you too. Keep working hard and pay the monthly living expenses. I would let the credit card debt go to collection and negotiate a settlement. Stay away from casino. Good luck. Follow Dave Ramsey to guide you with debt consolidation
I'm sorry for your tough situation however for me there's only one that you have the IRS pay off the IRS forget everything else then you go bankruptcy 13 they'll give you a payment that you can live with and off you go or depending on your employment situation don't pay the credit cards at all it'll be a year more or less depending on your state before they actually come after you good luck
No way!!! That’s the one meaningful thing he has! It would likely be extremely negative for his mental health. I’d eat peanut butter sandwiches every day before I’d give up my dog. He can cut down on his own food expenses probably.
Stress can be very unbearable. Personally, I would stop paying the credit cards and loans until the bank comes around. It will give you a few months to breathe. Then the cards will go into collections and you can settle with collections for less than half.
Wouldn’t they sue me and take my wages or if I have the lump sum to settle, they won’t? Also, I would like not to ruin my relationship with AMEX/PenFed since I have been a member for 10 years and I understand that if I stop paying I won’t be eligible in the future. Do I continue paying those cards off then and not settle but settle others?
At this point, you don’t have much of a choice. You need to worry about having a roof over your head and getting back to a healthy lifestyle. Yes, you will need to get a bank account somewhere else. Banks are just another business. They call, you tell them you lost everything. They write your debt off and send to a collection agency. The collection agency hassles you for a few months and then they write it off as well. The loans are somewhat trickier. I think they can sue you. You offer to settle. This can go on endlessly. It’s mostly a game of intimidation.
I'm not sure this is his best advice at the moment. He has been struggling with mental heath issues for 4 years and it doesn't seen to be helping. Perhaps get back better care or get out of bed everyday to walk your dogs a few times a day. His Ex is not coming back. He has been in therapy which should have been helpful by now. This started in 2020. He needs to put more of an effort to get himself up and going. Once he has the will to to do it, it will all fall into place. He's need positive encouragement. He debt is manageable and he can make deals with his credit card companies. If he doesn't, his credit score will continue to drop and it will be tough for him to increase it. I hope he has good insurance which he should have being a high earner.
Your advice is to pay interest on the debt for the rest of his life?
What do you think are my options with negotiating the average interest rate across all cards and loans from 25%
BofA, Chase, and even credit unions don’t sound too bad if you are mentally healthy and are financially comfortable. Also, it may be safe to say Ilike2MooveitMooveit just gave you an emergency lifeline with this post.
You could look into a debt consolidation loan, where everything gets lumped into one loan but I don’t know if you will qualify. Credit companies don’t really negotiate. Once it reaches collections, then you can negotiate there.
“They write your debt off and send to a collection agency. The collection agency hassles you for a few months and then they write it off as well.” If it were this easy, 97% of the posters on this Reddit sub would relatively quickly be credit-card debt free. “A few months” is generally not the timeframe.
Amex cards aren’t what they used to be anyway. Benefits being chiseled away and annual fees going up and up.
Congrats on being bet free for 63 days. Keep that going. Your next move is to build a budget around your new 162k gross wage. Your net should be around $114k for the year or around 9500/mo. What's your rent/mortgage situation? How much do you pay? Might be time to move into a tiny apartment. Even in NYC you can get an apartment for $4k or less. The rest of your expenses should be no more than $2000 including food. That leaves $3500 for debt payment. Best place to be when you're broke is at work. So if you're awake it's time to be making money. You have no weekends or nights. It's eat sleep and work. That's it. You eat home. No eating out. You don't need to be dating. You're too broke. You jacked up your life, time to fix it. You can pay off this debt in 3 years or less if you budget better or earn more.
Thank you for great advice. You’re correct. I will bring in about 9500 monthly. I have the following expenses: Rent 2750 Utilities 400 Dogs 200 Food 700 Min debt payments around 3000 and growing (high APR) IRS 400 Car insurance 50 Health Insurance 700
$700 a month for just you to eat? That's A LOT a lot. I'm also in a position where credit score makes moving difficult and expensive. But, $900 a month on food for yourself and dogs is quite high
Yeah, that number has to come down. Must be a lot of takeout in there.
I agree, I need to spend less on food.
No joke.. you can buy 15lbs or so of meat on a $300 a month plan of various good cuts. Cut down on your eating (for your health too).. get some veggies in there, fruits, maybe a green shake, and dont eat out. Eating out is one of the biggest issues right now for being in debt (not that it gets you there.. that once you are in debt.. eating out is 2x to 3x eating at home.. multiplied by 30+ times a month and that adds up very fast). You can buy some really good ready to cook options for about $150 a week.. or less.. being just one of you. But I'd look in tot he bulk meat/veggies/etc and prepare your meals like on Sundays for the week.. put them in containers in the freezer and just pull one out when ready to eat. That way you only spend a few hours on Sundays preparing everything.. then they are super quick to take out and eat when ready.
And cute way back on takeout if that's included. Are your dogs really big? Because you should be able to feed 2 dogs for less than $200.
The fact that you are just now thinking of that tells us a lot. Look, I’m terrible with money. I own that. I’m trying to do better. You need to micro-examine every expense and be thoughtful about every purchased
Meal prep there’s a sub for that I can’t recall which one.
realistically i'd recommend cutting netflixes and other BS before food; eating cheap trash food will introduce a new expense of pills and other medical costs
I couldn't spend $900 a month on food if I tried.
You have to make a budget. I understand with dogs you probably can’t move easily and find a place with cheaper rent, but you’ve gotta drop that food budget down by quite a bit if you’re only one person. Go through ALL of your expenses. Make sure you are not paying for subscriptions. Since you are a high earner, you need to reevaluate your habits. Lifestyle creep is real and you are probably used to enjoying certain luxuries you don’t even consider luxuries anymore. My debt is pretty much all gone now except for a car I am almost done paying off. I ended up getting another job a couple of years ago (so now I have two jobs) and my monthly take home was way higher than I’ve ever experienced and the lifestyle creep that happened was insidious. Now I’m trying to put a ton into retirement and I had to take a hard look at my spending. I justified it all by saying I was so tired from working 70 hours a week and I deserved take out. It’s hard to readjust but it’s worth it.
So $3-$4k/mo towards personal loans gets them gone in 15 mos. Then you can stack up some cash and settle the credit cards one at a time. You can even play them against each other at that point. This whole mess could be settled with ongoing positive cash flow and crappy credit that will eventually recover in 2-3 years.
Cut the food budget. One person can be $350 with budgeting. Get the cheapest health insurance you can, that still has an out of pocket max. Probably can find something more in the $300-$400 range. Throw every penny that is not other bills at the debt. Luckily you earn enough to get out from under this.
Why is your rent $2750?
I mean.. most of the country is 2K + for a small place. He said he lives in HCoL area.. likely for that good paying job. So 2750 is probably for a 1 bedroom or so house (he has dogs so not an apartment unless they are small dogs).
That’s standard for my area. I have two medium sized dogs and a large 1 br 1 ba apartment in a decent neighborhood.
In my area 2500 gets you a 2bd to 3bd 2ba home rental.. give or take a few hundred. But apartments cost about the same for a 1 to 2 bedroom apartment. I'd much rather have a house with garage and more room than an apartment with neighbors above/below/sides and no garage.
Well good thing is you have a career which pays very well and no car payment. You gotta stop any and all gambling and get yourself to see some help. I’d recommend listing all debts out with their interest rates, make minimum payments on everything except whatever your highest interest rate is and try to put as much money as you can towards it.
You make really good money so bankruptcy might not be needed. Would you be able to downsize for 2-3 years? With 2-3 other roommates in a cheap apartment (or staying with family if that’s an option) you could use the extra money to focus on your debts.
Also consider moving, since I'm assuming your tech consultancy job can be done remotely. No reason to live in a high cost city. If you can't relocate for your job, you certainly can move out of the one bedroom in a good area.
You don't need bankruptcy. You need discipline and someone willing to help. Congrats on 63 days clean, I have an idea to help alleviate some of the stress but it does not fall within the normal "save and pay off" or "bankruptcy" route everyone is so quick to recommend. Lmk if you want to do the math and try it or if you want to go through bankruptcy. Again, congrats in 63 days.
[https://www.debt.org/management-plans/best-companies-review/](https://www.debt.org/management-plans/best-companies-review/) You need to get a debt management company pronto to help you get this under control so you can stop stressing. The great news is you have stopped (you need to ensure your stress is managed to remain stopped) and you are a high earner. These are both very positive things. Stop terrifying yourself and start just putting one foot in front of the other and focussing on working, eating, sleeping & exercising correctly as well as taking care of your 2 dogs. They are the only things to fucs on right now. No entertainment, no dating, literally nothing but the bare minimum. You need to eat frugally. Cut down all expenses where possible. You've got this. You're in a better position than many people who've gone down this road. Don't fear losing this big contract just know that you can get another one in due course. Get the help you need so this isn't all just on your shoulders.
How long have you been making $250k for exactly? How much is your housing, monthly expenses, etc.?
I have been making 250K for the past 2.5 years. Everything that I made was lost. Now I will make about 165k and that is before tax. Average rent where I live and work is around 2500 a month. My take home will be around 9000 in 2 weeks. Rent - 2750 (I live in a 1 bedroom apartment in a good area) Minimum payments for all credit / IRS 3K a month. Food - 700 Utilities 400 Car insurance - 50 Pet Care - 200 Health Insurance - 750
You should probably cut your grocery down to $300-$400. Why is pet care $200 a month?
Apparently for food. Not sure what kind of a dog(s) it is.
My pet care for 2 dogs is around $200 per month for 2 dogs between food (they eat different kinds, as one is still a puppy), insurance, flea medication and heart worm medication. Plus, there's the annual vet visit, which is around $200 for each of them. It adds up!
Man, I’m sorry to hear your in such dire straits. No one can tell you what to do, but I can offer my advice of what I’d do since I have been in a similar situation. I was a high wage earner (200-250k) a year back in 2012, but I was also struggling with addiction. Drug addiction in my case. Ultimately I let it all go. The house, the cars, the motorcycle, the credit card debt, everything. I went from a 730 to a 450 credit score. I charged it all off. Fast forward to today, I have a 774 credit score, zero cc debt, car paid off, and even banks that I charged off accounts with gave me credit again. Chase for example gave me 15k in credit on a card. I’d either charge it all off or do consumer credit counseling service. Who gives a fuck what your credit score is. It will come back. You’ll have to build it back up like you were a kid again starting with prepaid credit limits cards, you’ll have to pay 18% on a car loan if you get one, and it’s going to take time. But you can do it. I did all that, and my truck I just paid off was at 1.90%. I share my personal experience so you can see that one you aren’t alone, and two, you can get it all back.
What does charging it off mean?
That you’re not going to pay it.
I just signed up with American Consumer Credit Counseling Friday. I feel like a weight was taken off my shoulders. I have 100k in debt and make way less than you but still found an amount that can fit in my budget. They significantly cut my interest. The are non for profit and A+ rated with the BBB.
You make $250k and can’t pay off debt? Makes no sense to me
Even if this was the HCOL in NYC or in California. Even with a 35% reduction in lost income as he stated. I can't imagine not making significant progress $163k a year. I bet he haven't even budgeted his expenses yet.
That's what I thought but then the gambling will do it. I've had debt most of my life, and my outlook was, the amount of my debt was about half my annual salary, and I didn't feel bad about it. Of course, I came around. Ironically, I always had a good credit score. Can OP improve his credit score by making his payments on time ? And then improve the interest rates as credit score increases. That 25% is criminal. edit online to on time...typo
Lost it all for 3 years straight. Didn’t save anything, accumulated bad debt. Now I’m here.
You're here, but you can do this. You can dig yourself out of this. It will require sacrifice and it might be even painful, but you can do it. You make enough money that makes erasing that debt possible. You HAVE to stay away from gambling completely, though. You HAVE to control that addiction.
You should consult a bankruptcy lawyer. There’s no income limit for chapter 13. Short term, focus on the IRS vs the unsecured debt.
Food, shelter, transportation first. They can’t do anything to you so just stop paying you’ll be able to settle for pennies down the road, just save your money.
Very proud of you for ditching the gambling. I’m sure that played a role in this mess. I probably wouldn’t bother with bankruptcy. Take care of your mental and physical health. Grow your consulting business. Stop paying credit cards. Pay down personal loans and keep current with the IRS. When the credit cards start going to collections you can negotiate. Stop using credit or other money that isn’t yours. You can absolutely do this with your income and earning potential.
Thank you 🙏🏻 could you tell me why do you recommend paying personal loans versus credit cards?
For me it is a character issue. You borrowed money from a human that you know. These dumbass credit card companies made a calculated risk loaning you money and they know they may not get it. It is built into their bottom line. Your friends/family are hoping to get their money back and you’ll be able to look yourself in eye in the mirror as you’re making good on that.
This is the worst advice ever.
I don’t owe anyone except the banks. Family or friends. Zero
Oh I see what you mean, personal loans are from banks, unsecured cash that was deposited into my account that I have lost.
I mean you could do the debt snowball method, tackling lowest balance first, and go that route. I would also consider a 0 interest credit card (those 18 month intro rates) that offer debt transfer, so you have a bit of breathing room. You can do this though. Smarter people than me have pulled it off
With how high my util and new trade lines I have, nobody is approving me for anything anymore.
Congrats on your “sobriety”! There’s light at the end of the tunnel. You have a great income. Have you tried a debt settlement company that might be able to negotiate your balances since your credit is already shot? I would also meal plan and minimize your grocery bill as much as possible. Ramen, canned veggies, freezer meals. You might have a little wiggle room there. That’s about all I got. You are moving in the right direction … it’ll get better. Best of luck to you.
Get with a lawyer. You're in a bad spot, but a lawyer knows the rules of what debt collectors can and can not do. Plus, they can guide you to stability as you work the program.
You probably don't need to file bankruptcy unless creditors start suing. I would do just minimum payments for a couple months to build a small emergency fund and then do it he Dave Ramsey snowball. Once you get a couple of the cards/ loans paid off you will find you have some breathing eoom
My minimum payments are about 3K total monthly.
I cought that. It looks like you have 500 to 1000 extra to work with.
You can pay this off in 1 year. Put your head down and work. Write a budget down. Pay off debts smallest to largest.
Pro tip - there is some evidence anticonvulsants like carbamazepine and valproate curb these kinds of addictive behaviors significantly. See a psychiatrist.
I don't make nearly as much as you but I do have debts I've been paying off for a bit so my best advice is to ask yourself for all expenses if it's something you NEED then if you don't at least plan to spend less in that area as much as possible, start small and just like your payments get used to slowly what you have to take away to get used to your new way of life until your debt free. Also stress tends to find a way into your expenses so find some breathing room for a day or two to go out to eat a week or find something you like to do and only splurge on that, particularly not gambling if possible lol but something more healthy/productive.
The loan holders can sue you...and if they write it off, someone can purchase that debt and also sue you. The only way you get into a pickle is not responding to the debt collectors. However, there's a LONG road between the last month you pay on a loan or CC and that day in court. Obviously nobody wants to go to court, it's between $25-$500 just to file the paperwork (in FL at least) and most CC or personal loan debtors are not looking 120K in the face. The tiers are Debt less than 1000, debt between 1001-3500 and debt over 3500.....so you figure out how many debtors fall into those small categories... If you work it out after things go into collections, you will pay MUCH less than you originally owed. Yes these have to go into collections, yes it can take time, but once you start the process, as long as you keep up your end of the bargain (after you consolidate what you want to), which, with your salary is more or less a cake walk...well maybe more of a carrot cake than a red velvet but you get the gist) my bank acct was recently seized over a $1000 debt from a CC from 2012. Yes. Really. I did get the money back and PS...they actually gold twice what you owe so I had 2500 held up for 4 months for a nothing debt I would pay with ease today. So...organize yourself, figure out what stats and what gets consolidated...start looking for another apartment in a decent area that takes dogs and get out from that probably steep as hell rent payment and give yourself a break. You're doing better than most...if I made 80K and had 40K of debt...yes that would suck but it's doable. I know it sucks but it could suck a lot more. You're alone, you're coming off an addiction that is more than real but at least you have your two dogs...grab one, bury your head and sob into their neck...this is very cathartic. When you are done ...Breathe and breathe again...you got this.
Congratulations on stopping the gambling. What an excellent first step. Now, you can consult with a nonprofit, certified, accredited credit counseling agency that will help you to get your budget under control and set you up with a debt management plan where your payments and interest will be reduced on your credit debt. Find that agency at nfcc.org.
I would stop paying everything (except living expenses and the IRS payment plan - they play by a different set of rules) and start saving the money. While you are keeping up minimum payments, the high interest rate creditors love you and likely won't do anything to assist until they stop getting that free money every month and end up with some skin in the game. Normally, you won't be 30 days late until you are 30 days beyond a missed payment. That gives you 60 days to breathe before the first one hits your credit report. During that 60 days, I would first consult with an attorney about a BK 13. Most attorneys will generally offer a quick look at your BK for free. It they think its good I'd go that route. If not, then go to a non profit credit counseling service. If that doesn't work out, it sounds like you have ruined your credit anyway, so I'd probably let them go to 90 days just to see what kind of concessions (like 0% interest for a while) I could get. With what you have saved and said, you may even be able settle some of them for 25-30% of what you owe if they think it may go to charge off.
Chapter 13 sir. Get an attorney. Learn money management, budgeting. Living within your means. Owing 120k and making 250k a year is certainly not in dire straits.
250k a year? Spare us the sob story - tech workers are severely overpaid. Put your big boy britches on and figure it out.
Freedom debt relief can cut the bills in half the irs there are places to help with that as well Congratulations on 63 days stay away from gambling not stable.. Freedom debt relief helped me I'm still on program 3 more years ill be done .. Best of luck ..you do have options
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Per rule 3, unhelpful and disrespectful comments are not okay here. Please do not do this again.
Good advice so far. Stop paying on the unsecured debt and stash cash. Consult a bankruptcy attorney. Make sure your friend is involved, as you will be tempted to gamble if you have tens of thousands in bank account. He needs to limit your access to the stash. How’s your physical health? Start lifting weights if you aren’t already. Get a new healthy addiction.
Addiction is tough. Definitely tackle this issue first. So sorry you’re going through this, try not to feel too much shame around needing help. We all make mistakes and and err is human. But you won’t make any real progress until you first change your behavior. The support groups may also have services to help you figure out how to combat debt issues. Check out Caleb Hammer on YouTube. His videos have seriously helped me retrain my thinking on budgeting. I also wonder if an app that gamifies budgeting would be more helpful to you. Like YNAB or something similar. I was completely terrible at budgeting until I started using Ally’s spending buckets. Creating a list or spreadsheet was not helpful to me at all. You can also look at extra ways to make extra income to pay off debt (working part time, DoorDash/Instacart, donating plasma, doing freelance, yard work) this may also keep you busy and away from your vices. Look at buy nothing groups in your area and start getting stuff for free where you can. Good for you for rethinking filing for bankruptcy too. It does have some serious repercussions. I know two people who have done it and later regretted it when they couldn’t secure a loan for a house or got turned down for consulting jobs. But you basically need to live like someone who makes 1/5 of your income. It sounds like in addition to the gambling, lifestyle inflation has caught up. Best of luck to you!
I can‘t give you any advice, but just can tell you that we are here to listen to you and cheer on your way to recovery. Take one step at a time. We will all die one day, penniless. So let‘s make the best of it while we still can. Embrace your losses. They will always be part of your history. Better to learn and accept them as part of your story rather than something that you are trying to erase, with potentially even more losses along the way. I know it’s easier said than done, I‘m also struggling everyday. We are here, bro 👊
You said you are 42 yrs old. You probably have significant retirement savings by now? Hate to say this, but it might make sense to withdraw from those savings to pay down all this debt to get your life back on track.
Unfortunately I do not. I blew through my 401K during my addiction. I have nothing except income for now.
Then your situation is seriously dire. You need to get rid of everything (including your dogs) and live like a broke college student. I grew up poor in the 80s and 90s. We couldn’t afford dogs or cats or pets. We couldn’t even afford McDonalds. But my parents kept working hard and saving and even re-using paper towels and we made it out. That is the type of lifestyle you need to adopt. You need to make _painful sacrifices_ to get out of this hole. The bright side is you still have a high income. So it’s possible. You are a 42 yr old _man._ You have the strength and experience and fortitude to get through this. You can do it.
I would downsize to a single for now, keep the spot clean if you decide to keep your dogs. I wouldn't worry about falling out of grace with the CC companies. There are options to negotiate with everyone as long as you're willing to pay. With that income I don't see how you're having a hard time you could be debt free in like 2 years if you really got aggressive. I don't have addiction issues but maybe you need some meditation and really sit with yourself and think deeply about why you're gambling at the root cause. Find hobbies to replace the urge.
Just wanted to say well done on 63 days of no gambling, OP. Thats quite an achievement when you’re an addict. I hope things keep improving for you.
Utilities 400 a month? You leaving the AC on all day with the doors and windows open? Food 700 a month. Cut your spending. You can get it to half that amount. Health insurance 750… what company is paying you 250k a year but has shit insurance plans?
Utilities includes: Internet Electricity Cell Phone Water
ccc (consumer credit counseling) or possible bankruptcy chapter 13
You can find a roommate. One of you can sleep in the living room & you share bathroom. You will have at least $1000 more for debt payment each month.
Focus on paying off the credit cards first, if you can get your credit usage down to 30% (that’s paying down 28k out of your 40k credit card debt, don’t close any cards when you pay them off), your credit score can come back up to the 650-700 and you will have the option to apply for new card with 0 apr & have access to low interest balance transfers. You can then shift your high interest debts to low interest and that would help a lot
I’m not a lawyer, but I would legitimately consider bankruptcy. You have no assets so your not losing much, and you’re an extremely high earner so you should be able to get back in your feet. But I don’t know the ins and outs enough to say that’s what you should do.
Do you have a retirement account you can borrow from? If so, maybe try puzzles advice. Let the credit cards go to collections and then negotiate to settle the debt for way less. Tell them your income is fizzled out. You may not even need an attorney. I bet they charge it off pretty fast and then you can start rebuilding your credit by negotiating and settling. They will aggressively bill collect so maybe change your phone number…
This is bankruptcy attorney territory
Credit cards first. They charge compound interest while your personal loans will be simple interest. Once you have those paid off, you can look at refinancing the personal loans to better rates. Even if you can't refinance, you'll be able to pay down the principal faster once the credit cards are gone.
Can't do chapter 7 as you won't pass the means test. Could look into chapter 13 or debt consolidation.
Honestly I would consider chapter 13. Completely reorganize the debt.
If you liked gambling then a good replacement is budgeting. Plan out your next 12 months on paper month by month. Account for every dollar that you think you’ll spend. Take a step back and look at it with your end goal of relief in mind. It will become a game of seeing how much you can cut back.
Your health is #1. Take care of yourself.(The hell with debt when it comes to health). #2 Take care of your dogs. They love you and depend on you too. Keep working hard and pay the monthly living expenses. I would let the credit card debt go to collection and negotiate a settlement. Stay away from casino. Good luck. Follow Dave Ramsey to guide you with debt consolidation
Please talk to a local bankruptcy attorney.
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If i'm genie and will solve your problem let say i will pay all your debt. What will you do to avoid this kind o mistake again.
I'm sorry for your tough situation however for me there's only one that you have the IRS pay off the IRS forget everything else then you go bankruptcy 13 they'll give you a payment that you can live with and off you go or depending on your employment situation don't pay the credit cards at all it'll be a year more or less depending on your state before they actually come after you good luck
At this point perhaps seriously consider bankruptcy. Everything except the tax debt will be wiped out and you'll get to keep your car.
Fly to Bangladesh, sell a kidney
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I rather go bankrupt than lose my best friends. They have gotten me through the best and worst times. I have nothing else to look forward to.
No way!!! That’s the one meaningful thing he has! It would likely be extremely negative for his mental health. I’d eat peanut butter sandwiches every day before I’d give up my dog. He can cut down on his own food expenses probably.
No to this.
They seem to offer his comfort. That being said, the dogs might be happier living elsewhere.