In Debt and Out of Control
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In Debt and Out of Control
| Tue, 10-05-2004 - 3:51pm |
I am 25 years old and am in serious trouble. I have $28,645.00 worth of credit card debt. Every month I am able to make the minumum payments on my account but I know that at this rate it will take me close to 45 years to pay of this debt. Lately, I have considered filing for bankruptcy but am not sure this is the most effective route for me. I am drowning and I don't know what to do at this point.
Right now, I am renting. I am planning on taking on a second job to help curb costs. I was thinking that taking on a roommate might be a good idea for me because it would cut my living expenses. Other than that, gosh, I just don't know what to do or where to turn. Last week I called one of those not for profit agencies that specialize in debt counseling. I didn't find them very helpful. They just kept pushing me to refinance with them.
I was hoping that soemone might be able to give me some constructive advice on how to turn my life around. I finally recognize that I have a serious problem.

Welcome to the board.
First off welcome to the DSG board, you'll only get wonderful support and advice here!
You passed the first step which is to face reality in terms of your debt. You now know exactly how much you owe and that it's too much.
From you post I don't think you're past due in your bills so bankruptcy is not something I would personally consider until I've tried cutting back on expenses, also doing perhaps as you mentioned working part-time temporarily to pay down the debt. Also the roomie idea has merit...just investigate the potential person financially and otherwise as much you can before getting into that situation - make sure she/he is included on the lease in case of problems down the road.
What many of us would suggest to you is to sit down and list all your debts and their respective amounts. Then you decide in what order they should be paid off (either by amount or by interest rate). I personally targeted smaller debts first to give me a sense of "I can get this done" before tackling the larger amounts.
Basically continue to pay your minimums on all your debts except your target debt. Every month on top of paying your minimum you'll also add any extra money you can find to that target debt...even if it's an extra quarter :)
Also for example: if in Sept. your minimum was $30 and this month it says to pay $25, keep paying the $30 dollars, as the difference will be applied to the principal.
There are many ways you can get your debt down, it takes perserverance and determination and support to get it done.
Look at your utility bills such as cable/internet/telephone/heating etc to see what services you can cut back or get rid of altogether until you get ahead in your debts. Also look at your spending habits, do you regularly eat lunch out or go shopping often. A lot of our debts occurred due to "miscellaneous purchases" the stuff we no longer have or remember buying.
Take a look at the snowflaking website, the link is at the top of the page on the board. We have managed to throw over $100K towards reducing our debt load in the past 9 months!!!
Also a lot of us have read some really good books on the subject of getting out of debt by the following authors:
Jerrold Mundis - How to Get out of Debt, Stay out of Debt and Live Prosperously (I think)
Mary Hunt - The Cheapskate Monthly and other books
Dave Ramsey - The Total Money Makeover, Financial Peace
Suze Orman - The Courage to Be Rich, The Nine Steps to Financial Freedom
John Furhman - The Credit Diet
We are here for you so don't hesitate to keep posting with your questions :)
Kassandra
Kassandra
"It is said that life has its peaks and valleys. The challenge is to accept them equally and experience them
I don't have much to add to the other posters advice except this. Go through everything you own and have a huge garage sale or post stuff for sale on Ebay. I did this a few months ago and managed to make a couple hundred to put towards our debts. If you take on the second job, make sure that every penny you earn from it goes towards your debts.
One big thing you need to do is STOP CHARGING ON YOUR CREDIT CARDS. I put that in caps because it can't be stressed enough. If you are working hard to pay down the debt but still charging, it's like shooting yourself in the foot and it will take even longer. Also, in the process, start to build up an emergency fund. Even if you can only put $10/week in - it will help you keep from using the cards in case something comes up (car breaks down, unexpected medical expenses, etc.)
Read everything and anything you can get your hands on about reducing your debt, saving money, etc. Even stuff that seems bogus will help enlighten you on how to go about doing this. Keep posting here. We are a group full of good ideas and if we can't help, we'll point you in the right direction.
Remember you didn't get into this much debt overnight and you won't get out of it overnight. It won't be easy and some days you will just want to give up but it is very rewarding to start paying down the debt and watching those balances go down every month. Be flexible in your plan and allow for setbacks because they WILL happen.
Hello and welcome to the board.
I'm generally not a big fan of paying bills through credit counseling, but I did want to mention that although you may have contacted a "non profit" company, it likely was *not* a Consumer Credit Counseling Service.
All my best,
Danni