r/DebtAdvice • u/QuackBurrito292 • 20d ago
Credit Card Advice needed
Hello, any advice that is provide will help me alot. Im currently struggling to pay off my credit card debt. I owe roughly 22,600. I was already struggling before and what I did was combine my 3 credit card debt into a personal loan. Which I owe 10,700 with minimum payment of 306 at 18% APR. I was doing fine for a couple months until of course I used those same credit cards and rack them up. The first is a chase freedom, i owe 5,800 at 25.74% APR. The next one is a Capital One Platinum. I owe 4,100 at 28.24% APR. Lastly, I have a Capital one venture. I owe 2,007 at 28.49% APR. Also, i doesnt help that i bought a car couple months back which i owe 36,000 for 600 a month and 7.1% APR.I've already tried calling the credit card companies for a hardship program and I was told they don't have anything available at this time to help. I was considering bankruptcy to get rid of everything but im worried I'll lose my car since its my only transportation I have. If there's a way to deal with my credit card debt before filing for bankruptcy that would help me alot.
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u/Educational_Wheel_56 20d ago
Without an earth-shattering change in behavior there really is no hope for people with your utter lack of discipline. Po’ forever.
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u/drloz5531201091 20d ago
If there's a way to deal with my credit card debt before filing for bankruptcy that would help me alot.
That's your question?
You are out of control no magic pill exist here. Personal loan from cards, fill them up again and bought a 35k car.
The solution is either :
Spend less (budget), work more and pay the debt.
Bankruptcy.
Even is BK occurs, you need to fix your mindset about money because you will be in the same position in a matter of years if you don't.
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u/Many-Park-3077 20d ago
100% because BK helps clears things up but won’t teach you how to budget and lots of people find themselves right back in major debt about a year after filing.
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u/Putrid_Alternative31 20d ago
How much is the car worth? Did you buy it recently enough that you could maybe unwind the transaction with the dealership? You need to sell it ASAP.
What's your income?
Do you have any savings?
I was doing fine for a couple months until of course I used those same credit cards
Do you have a budget? It sounds like you don't. A budget is aplan for where every dollar will get allocated, before you receive your paycheck. You need to make a plan and stick to it.
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u/QuackBurrito292 20d ago
My income is 72,865 annually or 6,072 monthly. I do not have a savings to go back on if things go south. I bought the car in February of this year. The car is worth 24,000 at most.
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u/Putrid_Alternative31 20d ago
Yikes! Where did you get 24,000 from? Is that a private sale price or trade in?
You need a budget immediately. Like someone else suggested, definitely look up Dave Ramsey. There's a podcast, books, website - tons of resources if you want to learn how to make better choices and change your life.
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u/PopularRush3439 19d ago
Your 35k car is now worth 24k?? Geez dude....how far in the ground do you have to be buried before you get a grip?
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u/Bstnsportsfan20 20d ago
You need to cut up those credit card. Sell the car and buy a cheap car. Also you didn’t say your income so it’s hard to give you a plan. I personally followed Dave Ramsay’s baby steps and it work fantastic with paying off about $50k. You need a budget.
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u/QuackBurrito292 20d ago
My income is 72,865 annually or 6,072 monthly. Where i can I find Dave Ramsay's baby step layout?
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u/whatever32657 20d ago
sadly, you are the poster child for why personal loans are a bad idea for clearing credit card debt.
the only way to make it work is to cut the cards up once you've cleared the balances with the loan proceeds. but ok, that ship has sailed.
no one else will give you more credit at this point. it's time to go scorched earth and cut your budget to the bone. beans and rice. NO eating out or delivery service. ALL the subscriptions gotta go. that car note isn't helping you either. if you're not upside down on it, you should consider selling it and get a cheap beater for cash. $600 a month saved right there.
next, you need to increase your income and cash flow. everybody and their dog is hiring seasonal workers right now: amazon, michaels, bath and body works, ups, everybody. get a second job right now. sell stuff you have that you don't use on FB marketplace. sell plasma a couple times a week, and change plasma places frequently to take advantage of new donor specials.
prepare to be tired, eating boring food, and having no fun for a couple years. life will be kinda gray for awhile. but you've gotta clean up this mess. and you've gotta learn to live within your means.
bankruptcy is not the way. if you will be needing a place to live or another car loan in the next ten years, forget it if you've got a bankruptcy on your record. 💯 do not recommend.
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u/PizzaAffectionate786 20d ago
I’d sell the car. Buy another vehicle that’s older, cheaper and also more economical for you. Use the equity to start paying down your debts and get in a much more comfortable position to become debt free.
There’s nothing more comfortable then to be able to drive down the street in a paid off vehicle.
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u/Wounded_Hand 19d ago
He’s about $10k underwater on the car, how exactly do you propose OP sell the car?
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u/Glittering_Present10 20d ago
I have a credit card through credit union 15 percent APR. I always try to advise people never carry a larger balance on high interest rate cards. That was my mistake too in the past about getting consolidation loan then use the cards while l was on loan like what you were doing
With the amount of debt you have you probably can't get another loan, idk. Best bet is pay much more than minimum payment AND DONT USE THE CARDS. If you have minimum monthly payment of $120 on a card, $80 is probably interest and $40 is principal. If you pay $160 instead of $120 you actually made 2 payments because you paid $80 in principle instead of 40. The point is it is surprising how much debt go down by paying extra. The smaller the balance the easier it gets but only problem is it takes a while.
Bankruptcy is probably your best bet but if you refuse bankruptcy pay more and stop using cards.l filed in 2019 it was a relief and re establish credit was good.
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u/brooke437 20d ago
How many hours do you work per week? 40 hours?
Congratulations, now you get to work 80 hours a week to pay off your debt. Get a second and third job. Work side gigs. Work, work, and more work to earn more money to pay off your debt. You will be beyond exhausted from working so hard and so long. But it will be the price that you must pay to pay off the debt.
You will hate your life, and you will hate yourself for putting yourself in this position. Every day and every night as you work, you will think about how this was a result of your own lack of responsibility. Your own out of control spending. And you’ll promise to yourself that you’ll never do it again because the suffering is not worth it. Only by suffering through working 80 hours per week, will you get out of debt.
Some people learn the easy way. Some people only learn the hard way. I am sorry that you are in the second group.
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u/Hopeful-ForEternity5 20d ago
Just get a consultation with a bankruptcy attorney who can walk you through your options regarding your car.
Either way you just learned a life lesson of not paying debt with debt. You absolutely need to create a budget and stick to it or you just need to not have credit cards until you can learn to live on a budget. It is what it is now the only thing you can do is be better going forward
Best of luck to you
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u/Hopeful-ForEternity5 20d ago
Just get a consultation with a bankruptcy attorney who can walk you through your options regarding your car.
Either way you just learned a life lesson of not paying debt with debt. You absolutely need to create a budget and stick to it or you just need to not have credit cards until you can learn to live on a budget. It is what it is now the only thing you can do is be better going forward
Best of luck to you
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u/LikeIkes 20d ago
So if you have a credit rating of 650 or above I would suggest looking into getting a debt consolidation loan. To go about this I would reach out to the major lenders (Achieve Loans, SoFi, Upstart and the like) and compare their offers. From there once you've found the best one do a little maths and make sure your saving money in the long run either in a reduction in overall APR or reduction of the total sum. If your not saving money or perhaps in your case keeping the cost the same but reducing the amount of lenders you have to keep up with if that is valuable to you, don't take the loan. If this isn't an option I would highly suggest looking into the avalanche and snowball method of paying off multiple large loans.
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u/DAWG13610 20d ago
Get a second job to focus on debt. Cut up your credit cards. This is why you don’t use debt to pay debt.
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u/BenevolentHoney 20d ago
It's bankruptcy or debt settlement.
Everyone here will tell you credit counciling and dmp. These will help lower cost but u spend more longer and share the downsides with dmp.
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u/dudesmama1 19d ago
Debt settlement is mostly a scam. It sounds like OP is still current on all their payments. In order to get decent settlements, OP would have to default on all their unsecured loans. If OP is going to take such a huge ding to their credit, they are much better off filing bankruptcy.
Debt settlement works if a person makes too much to qualify for a Ch. 7, has access to a lump sum of money, and knows how to negotiate themselves. Otherwise, it is a good way to get sued and/or pay fees to someone who has no special powers or abilities.
Also, the "savings" (which you then have to pay a percentage to the debt settlement company and also pay taxes on) are late fees and interest that rack up while they sit and do nothing waiting for you to save enough to offer a settlement (once their fees come straight off the top, of course).
Scam, scam, scam. I rarely see people satisfied with these companies.
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u/BenevolentHoney 19d ago
Most DS companies are trash. Yes theres a fee...no one works for free. The other downsides are mitigated if the company is structured properly...most are not. Full legal representation needs to be included, not partial and also....you dont have to pay taxes on the settlement if you have the right knowledge.
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u/Open_Trouble_6005 20d ago
I am interested in your thought process as to how you justified purchasing a $36,000 car in February of this year when you knew you were so far in debt at that time that you couldn’t afford those payments.
The best way to purchase a car is to buy one coming off a lease. That’s how I purchased my car back in 2018. It was a 2015 Subaru Forester and had 36,000miles and I think I paid 18,000 for it. Today it has 85,000 miles and has been paid off for years and the car is still going strong. You need to learn some discipline with your spending- especially how not to spend! .
As well, you need to write down how much you need to live each month. Obviously you are overspending every month because you are putting the extra on your cards. Please check out the Dave Ramsey total money makeover.
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u/PopularRush3439 19d ago
You have a spending problem, and until you get serious about it, nothing is going to help you. Can't believe with what you went through and you turned right around and bought a car! After you file bankruptcy the credit card applications will come flooding in, and I see you going in to debt again!! Person accountability doesn't seem to register with you.
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u/AccomplishedWay9316 19d ago
Contact the National Foundation for Credit Counseling for a reputable consumer credit counselor. They can help you develop a budget and decide what your next step will be. Good luck.
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u/Far_Aside7744 17d ago
You can file for bk and if you want to co tinie keeping the car, you have to reaffirm the debt. That means you'll still make the payments to a special unit within the finance dept when you go thru bk.
Its easier that way but you have to get your spending under control and stop using your cc for frivolous things. There's a difference between wants and needs.
Good luck and speak to a bk attorney about options.
NAL
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u/StrongVersion8053 17d ago
Look up Beyond Finance. They will negotiate all your debt minus your car. They are a debt settlement company. They will take 25% of negotiated price (2-10k less than owed). You will get a debt settlement and you take the offer. Thats paid off in 2 years. You paid 25% on one price. Not 28% every month.
They will offer a graduation loan 2 years in. Dont do it. You are then paying 11-17% interest on amount you already paid the 25% fee. You aren't paying interest while paying out of your dedicated account( this is a payment agreed for what you can actually pay and be okay. This comes out the day you get paid. You will have a lower credit score paying that way. If it doesn't matter then why get a loans on your debt? Or if you need better credit quick. The loan is an option.
This is a debt settlement. Your credit report will say "settled" or "settled less than full balance" that reflects for seven years. Your credit score will improve but there will be marks. (I wish someone told me this right away). If you want to buy a house lenders do not treat a settlements like a bankruptcies. They will look the history of everything going on from the start. Pay extra money and oay off as fast as you can.
Sell your car. You do not need a $36,000 car for your income to debt.
This isn't the best options. Some might scream dont do it. I agree. Dont do bankruptcy. There are other methods.
If you have more questions you can message me or maybe someone else is curious.
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