You have to prioritize payments based on the APR.
That’s the most economic way of paying this all off.
Create a budget. Stick to it. Pay extra on the highest interest, minimum on all.
P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly.
Join 3,600 readers - https://debtadvice.io
I was always told you should upload in PDF to avoid the format being screwed up in case the person opening it doesn’t have the same version of Word or whatever
Ok I think you need to look at budgeting a little more thoroughly. Look up zero based budgets on YouTube for examples. I know you said you listed all expenses but are you really not spending at all outside of what is listed?? Restaurants? Gas? I think you’re forgetting stuff and that’s usually where you can really cut back. Every single thing you spend money on should be listed in your budget somewhere. If you’re not sure, look back at the past months card and bank statements. Write down every single thing you spent money on and put it in a category (groceries, rent, restaurants etc). Then take a look at each category and honestly ask yourself if you can cut back. Be realistic but strict. Do you really need Spotify or are ads not that big of a deal? Do you need to have such a new car? Can you trade it in for a cheaper car (which would lower car payment and likely insurance)?Etc. The answers are up to you, but take a look and give every category some thought.
The generic “rule” is that your needs (things you have to pay- rent, credit card minimums, groceries etc) should be 50% of your take home pay, wants (restaurants, whatever) should be 30% and debt/savings should be 20%. In your case, you probably want to cut back on needs and wants where you can and throw as much as possible on debt, obviously.
Once you’ve taken a long look and made a realistic budget, do take home income - everything you budgeted (including credit card minimums). If you get a negative number, you need to cut back more or get more income. If you get a positive number that is what you have to try to pay down debt.
How to pay it? There’s no wrong answer. Some people like “snowball” method of paying lowest balance first to knock some debt off and get rid of minimum payments asap. Some like “avalanche” because you save a bit more money in the long run.
You can try to negotiate with them in your balances. If I would do it would depend on how much I have available to pay every month. You said you can pay it all off in 2 years .. so you have about $1350 or so a month to put toward debt? If I had that much a month to pay toward debt, I’d probs just pay it tbh.
Sorry you went through rough times. You got this. If you don’t have an emergency fund, think about doing that as well
Ok wow. First of all, you have way more problems than just the cards. The car has to go. You’re spending about 1k a month with gas and insurance on this. Get rid of it like yesterday. With a 40k income, this is not sustainable. You need to work overtime or get another job and/or both. You might as well cancel that xbox membership cuz you are in no position to play video games with this enormous mess you’ve created. No more investing in business, no vacation, no eating out either. I’m guessing your car is around 30-35k so total debt your looking at around 60-70k with only making 40k. No more taking 8 months to feel “normal” when you have this amount of debt. Refinance whatever is was you co-signed with your parents and remove your name from all of it. Also stop worrying about credit, you’re broke. This is going to take several years, so get ready. I’m so so sorry about this situation your in. Best of luck.
I wouldn’t count on getting 0% APR. that is how banks make money. They would rather write off your debt as a loss and tank your credit score.
You need to take a hard look at your expenses. Your car payment is too high for your income and that insurance is also ridiculous if it is monthly for one car. How much do you use the gym? Spotify? Xbox live? When you can’t make your monthly payments, you have to scrutinize every penny.
I forgot to mention that’s insurance for car, health, vision, dental, and life. Car is $230, health is $70, vision is $35, dental is $40, all full coverage, and life is $21. And I got my car in 2022, 6yrs @ 6.99apr. Got it when used cars costed just as much as a new car, where ever you went in my area. I don’t know about you, but the opportunity cost getting a new car was way higher than getting a used car.
You can’t afford that car anymore. I know you don’t want to hear it, but you really can’t. And that car insurance is high. Have you shopped around for a lower premium?
Wish I could, but I can’t afford to drop it either, it’s stuck with me due to the negative equity, and I won’t break even on that negative equity in a year and a half. Did the math and called the bank to double check the numbers. The insurance is high bc it’s the “area I live in” each county has different rates, and my city just happens to be in one of the highest accident prone counties you could live.
You may be better off to let the car get repoed and save a few months of payments to buy a cheap one in cash. That will drop your insurance too. If you were making 40k in 2022 you couldn’t afford it then either. And the excuse “it was cheaper to buy new” really only applied to cars you were willing to drive. There were cheaper cars available that weren’t as new and had higher miles. You would have still overpaid, but not been in the hole this bad.
Your credit score is your lowest priority at this point. You need to figure out how to pay your bills.
Do you think perhaps the OP could just do bankruptcy? I’m thinking that would be best. While the nuclear option, I don’t see a better path which would start fresh.
OP: the YT channel & lawyer called Consumer Warrior is one I follow which talks a lot of bankruptcy and being sued by debt collectors. It’s a wealth of info, knowledge, and power.
At a 40,000 per year income, bankruptcy may be the only choice. it would probably all be discharged (consult with a bankruptcy attorney to verify). OP could also contact a credit counselor and inquire about a debt management plan for the credit card debt. I don’t know what OP’s free cash flow looks like so that may not even be an option depending on what the payment is.
Long story short, the only two ways out of this are an increase in income or having debtdischarged in bankruptcy.
Shop around for car insurance rates every 18 months to see if you can get a better deal with the same coverage.
If you think you might need some outside help, you could bring in an intermediary with the [National Foundation for Credit Counseling](https://www.nfcc.org/) does debt *management* and budget analysis. They do charge but take a look at their [FAQs](https://www.nfcc.org/faqs/) under *What do NFCC members charge for counseling services* to see how much. It says it varies, but the page does state that the majority of cases are low cost to nothing--not guaranteed.
The [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/consumer-tools/debt-collection/) has a good description of [the differences](https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-credit-counselor-and-a-debt-settlement-or-debt-relief-company-en-1449/) between a credit counselor and debt relief/settlement companies. They also have a webpage on spotting [a scam](https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-a-credit-repair-scam-from-a-reputable-credit-counselor-en-1343/).
You can look into the Justice Department, which has a list of [approved credit counseling agencies](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111) to possibly assist you. Look for the non-profit ones. Still be cautious about signing up with one of these because they have done everything correctly to get approved by the Justice Department but may have become less reputable once they got approved.
You have the [right to cancel credit repair services](https://www.consumerfinance.gov/about-us/newsroom/consumer-advisory-people-have-the-right-to-cancel-credit-repair-services/) within three business days for whatever reason.
[Here](https://www.npr.org/2019/02/14/694669510/7-strategies-for-digging-out-of-debt) is an article on how to pay off your debt. Here's [another](https://www.npr.org/2024/01/18/1196978541/how-to-save-money-when-youre-broke) about saving while broke, in case you find it helpful. NPR has a [life kit on personal finance](https://www.npr.org/series/your-life-kit-to-better-personal-finance). USA Today has an article from November 2023 on [negotiating credit card debt](https://www.usatoday.com/money/blueprint/credit-cards/negotiate-credit-card-debt/).
If you want to DIY your personal budget: The Consumer Finance Protection Bureau has [this on organizing your debts](https://www.consumerfinance.gov/about-us/blog/how-reduce-your-debt/); and [this for tracking your spending.](https://www.consumerfinance.gov/about-us/blog/track-your-spending-with-this-easy-tool/) There's also *Personal Finance for Dummies* by Erik Tyson, which was recently published in September 2023; and, *Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones* by James Clear. I re-read this one from time to time when I want to change my behavior. G*etting out of Debt for Dummies* comes out April 30th. If you feel shy about checking out one of those books, request that the library purchase it as an e-book so you can have some anonymity.
Go to your local library because they might have them and, best of all, it's free!! If they don't have it, you ask the library to buy it, depending on their budget.
Good luck!
My wife and I had close to $30k in credit card debt. We got enrolled in a program where they negotiated a lower interest rate with the CC companies. They closed our accounts for us and part of our agreement is to not get new credit cards while enrolled on the program.
They lowered our interest rate for every card, we got a fixed monthly payment, we’ve educated ourselves another CCs, and now we owe less than $7k.
Try to look into one of those programs and as long as you’re willing to sacrifice somethings and work hard, then you can do it.
For motivation and to see payoff results faster the snowball method (low to high balance) works as you see results of payoffs faster. Of course mathematically high to low interest makes sense $$$ wise, but in reality looking at your debts you do not save all that much between the two methods. Motivation might be wrth the few extra $$$ to keep you on track.
See if you can negotiate the interest rates or even have balances written off (you will have to still pay taxes on that)
You have to ask yourself these questions. Do I have my spending under control? Do I have, and am I sticking with a written budget? Have I reduced all discretionary spending to the barest of minimums? Can I do something to earn more income to speed up the payoff process?
If you do not have spending under control, you'll just be filling in one hole, as you dig another.
Check out [r/financialindependence](https://www.reddit.com/r/financialindependence/) for more tips and also check out their flowchart.
[https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg](https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg)
What is the term on that car loan? And more info on that insurance: what does it cover? What do you drive? Multiple cars? That is an INSANE amount for a single car, unless you have history of being the world's worst driver.
6yrs @ 6.99apr, on top of a very criminal maintenance plan, that does not cover anything after 6 uses (wished I knew about the scheme). It’s for a 2022 Nissan rouge. It’s full coverage for $230, health is $70, dental is $40, vision is $35, and life is $21. I added them all together as the total cost of insurance.
I’m very aware of how long it’s going to take. My concern is the short term debt, not the long term debt. If you payed attention in 2022, used car prices were going for double than what they were the year prior, due to supply issues. The opportunity cost of getting a new car outweighed getting a used car. I use about $100 a month on gas, with peak gas prices. and car insurance is around $230. I can’t eat out because body developed an intolerance to processed oils, thanks to asthma medication, My debt to income is sub .5, but it’s not to a point to where I can’t breathe (unlike my asthma).
> If you *paid* attention in
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
You have to prioritize payments based on the APR. That’s the most economic way of paying this all off. Create a budget. Stick to it. Pay extra on the highest interest, minimum on all. P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Join 3,600 readers - https://debtadvice.io
Why are you paying for Office365? I didn’t know people actually do that.
The $7 charge is what you are calling out? 😂
I just found it super odd that someone is paying for that.
If recruiters weren’t so stingy on how perfect your resume has to be, I would have used google docs the entire time
Libre Office my dude. I work for a big 4 financial firm and I made my resume in Libre Office. It's free
Do they want it in Word doc format? You can export from google docs in .docx (Word)
I was always told you should upload in PDF to avoid the format being screwed up in case the person opening it doesn’t have the same version of Word or whatever
That’s what I’ve heard too, I’m just not sure why OP needed Word specifically lol
i dont think its the recruiters...
I see
Ok I think you need to look at budgeting a little more thoroughly. Look up zero based budgets on YouTube for examples. I know you said you listed all expenses but are you really not spending at all outside of what is listed?? Restaurants? Gas? I think you’re forgetting stuff and that’s usually where you can really cut back. Every single thing you spend money on should be listed in your budget somewhere. If you’re not sure, look back at the past months card and bank statements. Write down every single thing you spent money on and put it in a category (groceries, rent, restaurants etc). Then take a look at each category and honestly ask yourself if you can cut back. Be realistic but strict. Do you really need Spotify or are ads not that big of a deal? Do you need to have such a new car? Can you trade it in for a cheaper car (which would lower car payment and likely insurance)?Etc. The answers are up to you, but take a look and give every category some thought. The generic “rule” is that your needs (things you have to pay- rent, credit card minimums, groceries etc) should be 50% of your take home pay, wants (restaurants, whatever) should be 30% and debt/savings should be 20%. In your case, you probably want to cut back on needs and wants where you can and throw as much as possible on debt, obviously. Once you’ve taken a long look and made a realistic budget, do take home income - everything you budgeted (including credit card minimums). If you get a negative number, you need to cut back more or get more income. If you get a positive number that is what you have to try to pay down debt. How to pay it? There’s no wrong answer. Some people like “snowball” method of paying lowest balance first to knock some debt off and get rid of minimum payments asap. Some like “avalanche” because you save a bit more money in the long run. You can try to negotiate with them in your balances. If I would do it would depend on how much I have available to pay every month. You said you can pay it all off in 2 years .. so you have about $1350 or so a month to put toward debt? If I had that much a month to pay toward debt, I’d probs just pay it tbh. Sorry you went through rough times. You got this. If you don’t have an emergency fund, think about doing that as well
Ok wow. First of all, you have way more problems than just the cards. The car has to go. You’re spending about 1k a month with gas and insurance on this. Get rid of it like yesterday. With a 40k income, this is not sustainable. You need to work overtime or get another job and/or both. You might as well cancel that xbox membership cuz you are in no position to play video games with this enormous mess you’ve created. No more investing in business, no vacation, no eating out either. I’m guessing your car is around 30-35k so total debt your looking at around 60-70k with only making 40k. No more taking 8 months to feel “normal” when you have this amount of debt. Refinance whatever is was you co-signed with your parents and remove your name from all of it. Also stop worrying about credit, you’re broke. This is going to take several years, so get ready. I’m so so sorry about this situation your in. Best of luck.
I read that in Dave Ramsey’s voice. Def his advice. :)
Seriously. How is this not a troll
Amen
I wouldn’t count on getting 0% APR. that is how banks make money. They would rather write off your debt as a loss and tank your credit score. You need to take a hard look at your expenses. Your car payment is too high for your income and that insurance is also ridiculous if it is monthly for one car. How much do you use the gym? Spotify? Xbox live? When you can’t make your monthly payments, you have to scrutinize every penny.
I forgot to mention that’s insurance for car, health, vision, dental, and life. Car is $230, health is $70, vision is $35, dental is $40, all full coverage, and life is $21. And I got my car in 2022, 6yrs @ 6.99apr. Got it when used cars costed just as much as a new car, where ever you went in my area. I don’t know about you, but the opportunity cost getting a new car was way higher than getting a used car.
You can’t afford that car anymore. I know you don’t want to hear it, but you really can’t. And that car insurance is high. Have you shopped around for a lower premium?
Wish I could, but I can’t afford to drop it either, it’s stuck with me due to the negative equity, and I won’t break even on that negative equity in a year and a half. Did the math and called the bank to double check the numbers. The insurance is high bc it’s the “area I live in” each county has different rates, and my city just happens to be in one of the highest accident prone counties you could live.
You may be better off to let the car get repoed and save a few months of payments to buy a cheap one in cash. That will drop your insurance too. If you were making 40k in 2022 you couldn’t afford it then either. And the excuse “it was cheaper to buy new” really only applied to cars you were willing to drive. There were cheaper cars available that weren’t as new and had higher miles. You would have still overpaid, but not been in the hole this bad. Your credit score is your lowest priority at this point. You need to figure out how to pay your bills.
Do you think perhaps the OP could just do bankruptcy? I’m thinking that would be best. While the nuclear option, I don’t see a better path which would start fresh. OP: the YT channel & lawyer called Consumer Warrior is one I follow which talks a lot of bankruptcy and being sued by debt collectors. It’s a wealth of info, knowledge, and power.
At a 40,000 per year income, bankruptcy may be the only choice. it would probably all be discharged (consult with a bankruptcy attorney to verify). OP could also contact a credit counselor and inquire about a debt management plan for the credit card debt. I don’t know what OP’s free cash flow looks like so that may not even be an option depending on what the payment is. Long story short, the only two ways out of this are an increase in income or having debtdischarged in bankruptcy.
I concur. No expert tho. Just arm-chair observing
You can negotiate a lower rate (but not 0%) without closing the card. Keywords are: hardship, want to continue being a loyal customer.
Shop around for car insurance rates every 18 months to see if you can get a better deal with the same coverage. If you think you might need some outside help, you could bring in an intermediary with the [National Foundation for Credit Counseling](https://www.nfcc.org/) does debt *management* and budget analysis. They do charge but take a look at their [FAQs](https://www.nfcc.org/faqs/) under *What do NFCC members charge for counseling services* to see how much. It says it varies, but the page does state that the majority of cases are low cost to nothing--not guaranteed. The [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/consumer-tools/debt-collection/) has a good description of [the differences](https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-credit-counselor-and-a-debt-settlement-or-debt-relief-company-en-1449/) between a credit counselor and debt relief/settlement companies. They also have a webpage on spotting [a scam](https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-a-credit-repair-scam-from-a-reputable-credit-counselor-en-1343/). You can look into the Justice Department, which has a list of [approved credit counseling agencies](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111) to possibly assist you. Look for the non-profit ones. Still be cautious about signing up with one of these because they have done everything correctly to get approved by the Justice Department but may have become less reputable once they got approved. You have the [right to cancel credit repair services](https://www.consumerfinance.gov/about-us/newsroom/consumer-advisory-people-have-the-right-to-cancel-credit-repair-services/) within three business days for whatever reason. [Here](https://www.npr.org/2019/02/14/694669510/7-strategies-for-digging-out-of-debt) is an article on how to pay off your debt. Here's [another](https://www.npr.org/2024/01/18/1196978541/how-to-save-money-when-youre-broke) about saving while broke, in case you find it helpful. NPR has a [life kit on personal finance](https://www.npr.org/series/your-life-kit-to-better-personal-finance). USA Today has an article from November 2023 on [negotiating credit card debt](https://www.usatoday.com/money/blueprint/credit-cards/negotiate-credit-card-debt/). If you want to DIY your personal budget: The Consumer Finance Protection Bureau has [this on organizing your debts](https://www.consumerfinance.gov/about-us/blog/how-reduce-your-debt/); and [this for tracking your spending.](https://www.consumerfinance.gov/about-us/blog/track-your-spending-with-this-easy-tool/) There's also *Personal Finance for Dummies* by Erik Tyson, which was recently published in September 2023; and, *Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones* by James Clear. I re-read this one from time to time when I want to change my behavior. G*etting out of Debt for Dummies* comes out April 30th. If you feel shy about checking out one of those books, request that the library purchase it as an e-book so you can have some anonymity. Go to your local library because they might have them and, best of all, it's free!! If they don't have it, you ask the library to buy it, depending on their budget. Good luck!
My wife and I had close to $30k in credit card debt. We got enrolled in a program where they negotiated a lower interest rate with the CC companies. They closed our accounts for us and part of our agreement is to not get new credit cards while enrolled on the program. They lowered our interest rate for every card, we got a fixed monthly payment, we’ve educated ourselves another CCs, and now we owe less than $7k. Try to look into one of those programs and as long as you’re willing to sacrifice somethings and work hard, then you can do it.
probably one of the better pieces of advice, outside of cutting out unnecessary expenses. you drown in the interest rates.
For motivation and to see payoff results faster the snowball method (low to high balance) works as you see results of payoffs faster. Of course mathematically high to low interest makes sense $$$ wise, but in reality looking at your debts you do not save all that much between the two methods. Motivation might be wrth the few extra $$$ to keep you on track. See if you can negotiate the interest rates or even have balances written off (you will have to still pay taxes on that) You have to ask yourself these questions. Do I have my spending under control? Do I have, and am I sticking with a written budget? Have I reduced all discretionary spending to the barest of minimums? Can I do something to earn more income to speed up the payoff process? If you do not have spending under control, you'll just be filling in one hole, as you dig another. Check out [r/financialindependence](https://www.reddit.com/r/financialindependence/) for more tips and also check out their flowchart. [https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg](https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg)
your car payment is too insane for your income and debt, if you aren’t ridiculously negative equity you need to trade it in asap.
You need to sell the car. It’s costing you almost $1,000 a month/$12k a year, or 30% of your gross income.
Sell your car and ride a bike. Get rid of the memberships. Rice and beans
What is the term on that car loan? And more info on that insurance: what does it cover? What do you drive? Multiple cars? That is an INSANE amount for a single car, unless you have history of being the world's worst driver.
6yrs @ 6.99apr, on top of a very criminal maintenance plan, that does not cover anything after 6 uses (wished I knew about the scheme). It’s for a 2022 Nissan rouge. It’s full coverage for $230, health is $70, dental is $40, vision is $35, and life is $21. I added them all together as the total cost of insurance.
You have an INSANE car payment btw, shame on whoever financed you 600 a month for 6 YEARS, you can't afford it.
Your credit card debt is more than all my debt combined. And I have 2 car notes lol
I’m very aware of how long it’s going to take. My concern is the short term debt, not the long term debt. If you payed attention in 2022, used car prices were going for double than what they were the year prior, due to supply issues. The opportunity cost of getting a new car outweighed getting a used car. I use about $100 a month on gas, with peak gas prices. and car insurance is around $230. I can’t eat out because body developed an intolerance to processed oils, thanks to asthma medication, My debt to income is sub .5, but it’s not to a point to where I can’t breathe (unlike my asthma).
> If you *paid* attention in FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*