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Pay no attention to the cluck-clucks of the perfect people here who are pointing at you. Let them bask in their smugness. You already know how you screwed up and why. The fact that they get off on telling you what you already know shows they aren't as perfect as they want to think they are. Ignore them. Their words are just noise with nothing of value to offer. Basically all they are saying is "See how much smarter i am than you?"
What's important is that plenty of us less-perfect folks have told you we've been there. For whatever the reasons, be they poor romantic choices, bad habits, illnesses, or just plain old bad luck, you are not doomed. People in your position have managed to pull ourselves out of those situations and leave debt in the dust, and you can, too, using the ideas and tips you've been given. I put myself on a tight budget, made payments on time, tracked every cent, and eventually got to where I could work 0% balance transfers and lower interest rates to pay it off faster. Now I live like a normal person, using a credit card with cash back and paying off the balance every month. Good luck! You can do it.
My smug superiority is hard won. I was in a similar situation nearly 18 years ago now and with a higher credit rating to boot. After playing the credit card transfer game exceptionally well for 5 years or so I finally pushed things too far and stopped getting approved. I then lost my job and took a significant pay cut. All of these things were my fault and mine alone, so I'm not perfect at all. I took a part time job, worked very hard at the primary job in order to get promoted, and also got very serious about tracking every penny and dug myself out of the hole, which took several years. All the lessons I learned during that period have paid off immensely and now I'm in a financial position I never would have dreamed of previously.
It's really very simply, OP. Track all spending to the penny so you know where your money is going each month, and increase your income. That's all it takes. You don't need another loan, and in fact it's the last thing you need.
Lastly I would like to point out that it's a GREAT time to have a part time job. Wages are up, labor is scarce, and if you don't like the first one you take, there is another out there. Many places are paying bonuses after a period of time to encourage retention, too. You could use that money.
Bankruptcy is a pretty dramatic step, and it will trash your credit rating for a few years. But if you are unable to handle the interest rates and pay down the balance, it may be the best option for you.
$45k in credit card debt probably requires interest payments of approximately $11k annually. The private loan you took probably has interest of $1,000 or so. This means if you are paying $1,000 a month in debt service, you will never, ever pay it off.
If you can pay $2,000/month on debt service, PLUS whatever you charge than month, then you can dig out of debt in about 4 years. But if you are not putting $2,000 over and above your purchases towards your various debt, then it will take longer than 4 years.
OP, how much can you apply monthly towards paying down this debt?
Best is a distraction. Focus on simple.
Things like selling some of the crap you've accumulated on the charge card...
and increasing income (part time job, OT hours, etc)
Shifting income away from the savings & investing choices/needs... is NOT an option.
You need to earn and/or sell your way out of the hole
I would not let them go. I used to get offers for new credit cards with offers to transfer. I have read good things about the Wells Fargo Reflect Card. But I also read that Bank of America was good too - I had them once and did not like them. They sent my bills to the wrong address!
The best thing to do is find a way to live as frugally as possible and get a second job. And make sure you have broken yourself of any habit that got you into the mess.
Just my 2 cents here, but it is your debt, right? This did not happen by accident, right? You weren't just innocently walking down the street and then BAM, you fell into a hole and came out with $45K in debt, right? To me, it's a personal integrity thing. I owe it, I pay it. Simple as that.
There are no quick, easy ways out. You say you make a good income. If that's true, and you learn to act like a grown up and live within beneath your means, you should be able to have this paid off in what, 6 months? A year? 18 months? Not very long time periods in the grand scheme of things. As Nike says - Just Do It!
Do NOT let these go bad in an attempt to negotiate and settle. Do NOT consolidate these. Do whatever it takes to pay it off - a second job on nights and weekends, stay out of the bars, no eating out, no vacations, no extras of any sort until it's paid off. Hit this debt head on and pay it off, whatever it takes.
The 6 sweetest words in the English language are "I love you" and "Paid In Full". Good luck.
I agree with you with perhaps an exception for medical emergencies which can put a person/family in severe debt if they don't have good hospitalization insurance. Otherwise, if the debt is due to spending more than a person can afford to pay, then the solution is to knuckle down and pay it off.
Often, this may mean selling off some assets (cars, motorcycles, expensive "toys", etc) and using the proceeds to pay down the debt. This accomplishes two things. First, you eliminate the payment that you have on that item. Secondly, it may give you some equity that you could use to pay off some other debt. In effect, selling an item that you owe money on yet have some equity in kills two birds with one stone.
The best way to pay off debts is to write checks until they're paid. Live on peanut butter sandwiches and ramen noodles, iron your own shirts, stop watching cable TV, cancel the iPhone and get a burner at the neighborhood bodega, ditch the leased BMW and buy a used Toyota Fit; and write those checks till the debt's all gone.
I agree with you with perhaps an exception for medical emergencies which can put a person/family in severe debt if they don't have good hospitalization insurance. Otherwise, if the debt is due to spending more than a person can afford to pay, then the solution is to knuckle down and pay it off.
Often, this may mean selling off some assets (cars, motorcycles, expensive "toys", etc) and using the proceeds to pay down the debt. This accomplishes two things. First, you eliminate the payment that you have on that item. Secondly, it may give you some equity that you could use to pay off some other debt. In effect, selling an item that you owe money on yet have some equity in kills two birds with one stone.
Unlike credit card companies and banks, medical debt is generally easier to negotiate. I've got health insurance but with a high deductible so a trip to the ER for me and a surgery for my wife both generated bills of several thousand dollars. I had the money to pay them off immediately if necessary, but I still negotiated an interest free payment plan because it benefited me. The magic words are, "I need to be on a payment plan and I'm prepared to make the first payment today." That's music to a hospital's ears because so many people DON'T pay. One hospital was more generous than they other, giving me a year to pay no questions asked while the other wouldn't go more than 6 months unless I filled out a bunch of paperwork proving that we were broke. Had I really been broke, that would have been worth doing.
Here's an article that provides a little more nuance to medical debt and bankruptcy. Very rarely is it the sole cause but rather a contributor.
The second the Fed started raising interest rates, we went to our credit union and applied for a personal loan to consolidate 3 high-interest cards ($3K) and an emergency card specifically for veterinary care ($8K, Care Credit) that required sizable "balloon" payments to avoid massive interest accruals in the 6-month cycle following each new charge. We'd had 3 major vet emergencies within the span of a few months. Without that loan, we would have had 4-5 of those massive payments hitting us during Nov/Dec, our lowest-income months. No bueno.
The credit union process was easy, fast, and gave us an APR around 3.9% (versus the 24%+ on the consumer cards). In the interest of paying it down quickly, I pay them weekly, which chips away at the balance faster while establishing a strong payment track record with them.
If you default on your debts, then all prospects of getting a better interest rate will go down the toilet. You should do the opposite - pay extra every month, and once your debt ratios go down, it will be easier to manage and you will have more options.
For me it helped a lot to be able to obtain a personal loan at almost 1/2 the interest I was paying on some of the cards...paying those cards off and lowering my minimum required payments by over $900 a month. Then a few months later those same cards I paid off started offering 0% balance transfers for 18 months with 3% transfer fees...I took them and paid off some other cards leftover,further reducing my minimum monthly payments. I know all I've done is spread the debt around..I still had the same amount of debt but it hurts less to manage the payments and the balances go down A LOT faster.
I'm just not ready/willing/able to live on peanut butter,sell my stuff,get 2 roomates and get 2 other jobs.
I refinanced my debt in expectation of huge rent increases(Which so far has not happened)...I was doing great ...but life happened again: I had to spend over 4 months in 2 hospitals and 2 nursing homes...and now I've got around $12K in medical debt for co-payments and expenses/meds not fully covered by Medicare and othe Insurance.
So sometimes it just doesn't go your way no matter what.
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Ignore them. Their words are just noise with nothing of value to offer. Basically all they are saying is "See how much smarter i am than you?"
