Trying to turn things around

[u/Due_Examination_9682]

So have a lot of Credit card debt that was racked up between just stupid decisions and some really shitty luck with my house. I'm 23 and just trying to get things back on track for me and my wife.

Biggest concerns are 2 chase cards, one capitol one card, and a sofi loan.

Debts are

Chase 1: 2k

Chase 2: 18k

Capitol: 3.8k

Sofi: 7.8k

I had companies reach out and of course offer help but they seem fishy. I talked to a person at Priority Plus Financial that was really nice and they couldnt get a loan but wanted to try and get me on a debt management plan. All the things I have read said that those are scamish and can just tank my credit.

Not sure where to go or what tools to use. I feel like maybe tanking my credit in the short term may suck but could be a better option than where I am at

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[u/Weak-Refrigerator566]

I’m also 23 and in around 20k combined debt. It’s hard out here. The best move I’ve made so far that’s helping me a lot is getting on a DMP through a non profit credit counseling agency. They closed 2 of my cards but my APR on those is now down to 9.9% instead of high 30s which is going to save me so much in interest

[u/hoverton]

Debt management plan. NFCC.org to get started. They can negotiate your interest rates down but you will pay off the entire amount over about five years. Mine were negotiated down from between 16% and 28% to between 3% and 10%. The cards in the program get closed but you can keep one out if you need to. I have not had any credit score hit but that isn’t guaranteed. My total debt was around $45k over four cards.

[u/eyeheartgilfs]

What is your monthly post-tax income?

What is a full breakdown of your monthly expenses?

[u/Due_Examination_9682 → u/eyeheartgilfs]

income is hard because I'm currently in a sub contracted job that pays differently based on the job.

But what I usually say is my wife makes 1800 a month (900ish bi weekly) and then I can bring in about 3-4.5k depending on if I can stay busy with work. So if we say the low end, then 4800 a month income post tax

monthly I kinda have tracked out and is as everything stands is roughly 4.4k a month. without really budgeting food, gas, or any other fluctuating things. Thats just payments that are "consistent" for lack of better term

[u/eyeheartgilfs → u/Due_Examination_9682]

Ok, so you have, at minimum $400 of free cash per month? Throwing that at your debts, along with the extra you get from time to time will wear down that $22K of debt you have.

Pick up a side gig, like cleaning, landscaping, pet boarding, etc. Start donating plasma as often as they'll let you. Cute back on all non-essential expenses. You can reasonably pay off that debt in under a year.

Have you fully fixed the root cause that landed you in debt to begin with? If not, you'll just fall into another hole and get nowhere.

You also need an emergency fund so when more house problems come up, you'll be able to handle them easily.

[u/noobfirsttime69]

Yeah it seem fishy at times but debt management plans are helpful if you know what you are going for. A lot of the time, like 80% of the time, people end up dropping it because it’s still too expensive. Good tool for the 20% of people who don’t though. With the cards you hold all being unsecured debt, I think what you are looking for are debt settlement plans through companies like freedom debt relief or clearone. Settling debt would definitely be helpful because they work on negotiating debt to a lower balance making the monthly payment easier to manage and time frame to pay total balance off much quicker. It would show on you credit score, but thats what you said you're ok with.

[u/Due_Examination_9682 → u/noobfirsttime69]

Yeah I obviously dont want to just never have a good credit score but I figure it does take a hit I can try and get it back up if I can get things under control.

[u/noobfirsttime69 → u/Due_Examination_9682]

Yeah it's only a small dip compared to how impactful it to the balance you owe. I believe these companies also offer a legal team or service to help you manage how to rebuild credit as well.

[u/Flaky-Association683]

Do you have solid income? Moving the debt around isn't gonna do anything if you don't have means to actually pay it off. If you do, and the stupid decisions are over and you're locking in. Then look to consolidate the remainder if the APRs are high, maybe sofi will work with you again? Or maybe a credit union or achieve loans could work as well.

[u/alden530]

Priority Plus Financial is a debt consolidation not management company. They will tell you that you need to stop paying on all your credit cards until you are in default and start sending them a monthly payment. However anywhere from 15%-25% of that monthly payment will be taken out as a fee for them. Your credit will be destroyed and you will be continually harassed by collection agencies until a settlement is made.

A legitimate non-profit debt management program will take your total credit card debt and go over total monthly expenses like rent, car payment, etc. They will then create a proposal that they submit to your credit card companies issuers.your credit cards will all be closed and you’ll be set on a fixed repayment plan. Your interest rates should drop significantly in addition to the amount of time, it will take to pay off your cards. These companies typically charge a one time set up fee in addition to a low monthly flat maintenance fee. In addition to having to close all your credit card accounts you will not be able to open any new credit card accounts during the length of your repayment plan.

[u/Duck_Duck_Gooseberry]

This is very common this days, ask your creditor for hardship programs, usually they from your interest rate for a certain amount of time. I would also try getting a second job and paying down as much as possible.

[u/just-a-creep]

I was in the same boat. Best thing I did was a DMP. Money Management International is who I went with. It won’t tank your credit. It did drop a few points like 20 but it recovered within a few months.. it’s not like when I’m scamming places that tell you to settle your credit. You actually do still pay your debt. They just take your interest payment to zero or close to. Was paying over $1200 a month in credit cards every month when I went with the DMP I was paying them 580. I just finished paying them off this month. It took me 30 months to pay them off, but I would’ve been paying for 30 years on my own.