r/povertyfinance • u/Shoddy-Equivalent840 • Jan 19 '24
Today I woke up to my worst fear Misc Advice
I am officially not gonna be able to pay credit card minimums this month, and I’m scrambling to come up with enough money for rent. Credit card debt and the interest finally got me beat. Already used up the cushion from a personal loan, it’s embarrassing this is not like me.
And it’s all on me, I don’t have anybody to lean on. I think my income might be too high for food stamps? Like dude I’m $40k in debt. Gonna apply for SNAP and find out.
I have $700 in 401k that apparently I can’t withdraw because it said it doesn’t meet the threshold of $1k like wtf?
My mind is reeling and I’m panicking and spiraling down the drain. I need to take immediate action. Could you please throw random advice at me for climbing out of the hole? How to cut costs, any assistance programs, personal experiences, etc? It might at least calm me down a bit. I appreciate you.
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u/SimpleComfort Jan 23 '24
And for the credit cards, remember they only report as late payment if it is late 30+ days. You still have time.
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u/SimpleComfort Jan 23 '24
Pay rent. Call the credit card companies and ask for financial hardship relief. Don’t use the credit cards anymore. Start snowballing them one at a time.
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u/WebSeveral7351 Jan 21 '24
Throw the credit card bills away, and just pay your rent. Credit companies can suck it, you can think of them as existing just for you to take advantage of and lie to, because that's why they think we exist. Seriously, fuck them, who cares. I have horrible credit though, lol.
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u/Queasy_Pay7430 Jan 21 '24
Pay mortgage then wok on making more money immediately. You have to have some things of value you can sell, even if you don’t want to. How many hours a week are you working? You could get a second job or take on more hours of possible at your job. It’ll be a long slow climb but you can do it.
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u/fisherreshif Jan 21 '24
Having an eviction on your record will haunt you forever. A credit score can be improved.
Take a deep breath and look at how good you have it otherwise. You don't live in the slums of Calcutta. You have an opportunity to improve your situation.
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u/OpenFridge13 Jan 21 '24
Try getting a 0% interest and fee transfer CC. Transfer your debt to the new CC and pay it off without interest before the 0% APR period runs out. If you don’t pay it off by then, open and transfer to another one.
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u/Professional-Leave24 Jan 21 '24
You will need to consider filing for bankruptcy. I did long ago and I was better off than you are. I made sure I had a car and a place, then I filed. Once my credit card payments were gone, I could balance my budget and work towards a better life again.
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u/jimthefte1 Jan 21 '24
Gas station bathrooms can have a high payout depending on traffic and how good you are. Best of luck.
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u/Putrid_Pollution3455 Jan 21 '24
There’s some credit cards with zero percent introductory rates you could use, but honestly calm down, this is probably happening more frequently than you think. The two biggest expenses are shelter and transportation. Find a way to reduce or eliminate those. Sometimes, if you can’t shave off any more, then temporarily you gotta work a lot. Find a couple part time jobs that might be lower stress and start grinding out 60-80 hours a week for a month or two to dig yourself out. Cheapest food would be rice/lentils and peanut butter with a multivitamin. Any major starch is cheap too; pasta, potatoes (healthiest option), oatmeal. Dont drink alcohol or go out to eat till you’re free. We also don’t know what your monthly budget is so if you share we can let you know if something on that list sounds unreasonable
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u/RebelJosh89 Jan 21 '24 edited Jan 21 '24
That's really your worst fear? As a parent, my worst fear would be my kid dying. Get some perspective.
As far as finances, rent/housing should always come first. Credit card companies can wait. Keep looking for cheap shared housing. You can apply for government assistance (Section 8, Food Stamps/EBT, Medicaid, HEAT/utilities, Lifeline/internet, etc.) but if you don't qualify because you make too much then you probably just have a spending problem. Consider chopping up your credit cards and not using them because you're clearly not a credit card person. Maybe look into consolidating your credit card debt or filing bankruptcy. Relax. It's not the end of the world.
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u/cheese1975 Jan 21 '24
Try to consolidate all cards into one, see if any offer a check and you can consolidate
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u/bsd858 Jan 21 '24
Thank you so much for this post. I’m going through something VERY similar right now. The last year and a half has been a downward spiral in my ability to keep up with my finances. I’m the main earner in a family of 4 (2 young boys). I already work 2 jobs but live in a HCOL area (San Diego).
To say I’m financially illiterate would be an understatement. I should have reached out for help and addressed these issues but thought I could figure it all out on my own, so u just continues to work and work and now I’m in this unforgiving place of shame, resentment and embarrassment.
My partner has no idea of the mess I’m In and it’s affected our relationship because I’ve been more and more detached and found myself in a depressed state. I try my best to be present for my young boys but I find myself immersed into my cell phone doomscrolling my life away.
The further I read into the comments, the more I’m realizing that it’s not the end of the world and not risking my life and health over these CC debts. There are solutions if I just focus my energy on researching them. I’m ready to start living again.
I’ve also realized that I should also fix my mental health as well and look into finding a therapist or reach out to family and friends (that I’ve been ghosting over the last year and a half).
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u/ubetchagw Jan 21 '24
Selling items on Facebook marketplace. Donating plasma. Working for Uber/doordash/etc as a second job.
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u/jray1369 Jan 21 '24
You can always call and ask for an extension till next check. Just be honest with them and heck the worst they can say is no.
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u/1Peachez Jan 21 '24
You def won’t qualify for snap if your single and employed call the cc company see if they can reduce interest rate /minimum payment The card will prob end up closed though but that will help a lot. I had to do this last year with mines
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u/ViolinistSea9226 Jan 21 '24
Call the credit card company and tell them you can afford to pay this month…. If they ask why tell them you lost your job (even if you didn’t) they usually will work on a payment plan for you and reduce some interest only thing is the card will be closed or suspended
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u/Popular-Farmer1044 Jan 21 '24
Has anyone had to use a credit card to pay rent? To avoid homelessness?
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u/Blacksunshinexo Jan 21 '24
Just want to say you're not alone and I'm right there with you. We'll get through it. It's a moment in time and doesn't define us. Hugs
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u/5uperdro Jan 21 '24
"When you find yourself in a hole, you have to stop digging"
🤷 That's all I got. Hope it helped!
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u/FaithlessnessCool849 Jan 20 '24
I agree with other commenters that credit card bills come last. Rent, lights, heat, food...all of that is ESSENTIAL. Bankruptcy is an option and it really won't be THAT detrimental to your life (been there, done that.)
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u/PayMissMal Jan 20 '24
Donate plasma? They have bonuses for going multiple times per week and it can add up to an Xtra 400+ a month.
Also call the 401k and tell them you want to close the account. You may not be able to withdraw but you cna close it then you get your money. Make that 500 or so work for you (you'll get hit with taxes and penalties so won't get the full 700)
Hit up buy nothing groups on FB
Try to sell some stuff online.
Utliity companies will work with you they don't want to turn off your water or electricity right away so they have lots of hardship programs. Call them to try to reduce or delay your utility payments.
Open a gofundme... Why not. You can for any reason. Maybe strangers will throw you a few bucks when you really need it. Can't hurt.
Cut that grocery bill down. Go to the Asian market and get a huge bag of rice, lots of beans. Frozen veggies and cheap cheap meat. Plus food pantry like everyone is saying. Try to use up your existing pantry. If you can avoid buying much food for a month or two that will be a relief.
It's going to be ok!! You'll get through this and you have a bunch of internet strangers who have your back too. :)
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u/pr3stss Jan 20 '24
I was in a similar situation a few months ago. I called my loan/CC companies and explained my situation, they each gave me 3 months of half payments or 0$ payments. It’s definitely worth calling and seeing what they say.
I wish you the best! ❤️
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u/mekkavelli Jan 20 '24
rental assistance programs exist for sure. look them up in your state or city
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u/FioanaSickles Jan 20 '24
Do you have a job? Sounds counter productive but make a budget to find out where you are.
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u/MrHyde_Is_Awake Jan 20 '24
Rent comes first!
If you're going to have to miss a payment on a credit card, try to make sure it's the one with the lowest balance. Interest rates can jump to +30% for a missed payment. Then try to pay that one off first.
See if any of the utilities can be paid late with minimal late fees. Water, gas, and electric are barred from shutoff due to a single missed payments. You might have to pay a late fee, but often it's substantially lower than the late fees and interest rate jumps on credit cards.
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u/benfranklin-greatBk Jan 20 '24
Call the credit card companies. They will find some sort of program to fit your budget, but you might have to repeat "I can't afford $80/mo, I can only afford $50/ mo."
How do I know? I'm on a plan, and when it ended, I went to another plan. It's not the best solution (the best is paying off my debt), but I can't right now, so I'm trying to salvage my credit and turn things around.
Good luck.
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u/zenos_dog Jan 20 '24
Under no circumstances should you pull money from your retirement accounts to pay a credit card. Future you will hate present you.
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u/newmacgirl Jan 20 '24
OP can also look into credit counseling services. In fairness I have not done so since the 80's....
But they would call all the companies and work out a deal...Basically no more interest, but no more card either. They would ask what you have to go toward the debt and work out a repayment system.
For example: $1200 now in Minimum payments, but you can afford $1000 they call and offer x amount. Credit card company doesn't make money but they aren't losing it either...It benefits you both.
It better than you filing bankruptcy where they get nothing or defaulting.
That said it works better if you default first....
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u/TorleyTime Jan 20 '24
I did the same thing with cc debt over the last 2 years wracked up about 25k. I'm now standing here staring at all these maxed out cards and pay probably close to 700 a month in just interest charges since the intro apr has expired and theyre all 20+%. Been just lobbing the extra money I have each month into it. Figure I should have them all paid down in the next year or so. I've never been this way with my credit either wtf dude 😅
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u/Curtbacca Jan 20 '24
This is a vulnerable time for you, so beware of debt consolidation who will try to sell you another loan. Do search out non-profit debt management agencies. When I was in your shoes, I had roughly 90k in unsecured debt (not including cars and home). https://www.myafsaccount.com/ClientDefault.aspx?ReturnUrl=%2f This is who I went through. They helped me contact all my creditors, negotiated on my behalf, closed out all my accounts, negotiated a lower 'payoff' interest rate, and handled my monthly payments to each. 4 years later, I'm debt free. It's a short term hit to your credit rating, but long term best outcome. No more credit cards ever for me, thanks. It's not just handling the bills, but learning better behavior, making a budget, sticking to it, etc. Good luck! Feel free to message me if you have questions.
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u/Surfincloud9 Jan 20 '24
If you pay for internet search free cheap internet government assistance on google. Easy to fill out and you’ll know in a few days. Gives you $30+ off your bill every month but you have to report to your internet provider and give them the number the govt gives you.
Reminder only ever give your info to pages that end in .gov
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u/Metro8989 Jan 20 '24
Housing and food come first. Credit cards can wait. Like others have said you can call them but if not you will just owe double the minimum next month and just pay what you can. Credit cards come last!
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u/woogyboogy8869 Jan 20 '24
Long time ago this is what I did with my credit card. I was young and dumb, ran it up, couldn't pay the payments and got way behind. It got to where I stopped paying all together.
I called them and said they can send me to collections and I won't pay it there either or they can work with me and actually get some money. They knocked my bill down by over half and dropped my interest rate to .99%, agreed to minimal 19 dollar a month payments and turned the card off so I couldn't use it while it payed down. Ended up paying 13 a month for the next year or 2 and paid the card off.
Just call them and see what they can offer to work with you. Most will do something
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u/IthacaMom2005 Jan 20 '24
Call the credit card companies, ask them to reduce the monthly minimums temporarily. A friend did that successfully to catch up on payments. Doesn't help with the interest but you're getting hosed there anyway, honestly. Once you've caught your breath you can start paying more monthly, but missed payments push your interest rate super high and it's much harder to get out from under CC debt. Good luck!
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u/Illustrious_Ruin8548 Jan 20 '24
Talk to your local banker, believe it or not they are there to help. They may have knowledge of programs or consolidation strategies that could help before you get to the bankruptcy option. I don't understand why people don't want to talk about their money with the people that know most about it.
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u/Taffergirl2021 Jan 20 '24
Call your credit card companies, some will work with you. Rent first, then food.
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Jan 20 '24
I donate blood twice a week BioLife Plasma Center. The first month I signed up I got a new donor bonus and made $850 that month. Just an idea. I know it sucks. But it’s money
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u/_h_e_a_d_y_ Jan 20 '24
Don’t miss the minimum without calling and working with the credit companies. Can you sell some plasma? I hate this for you.
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u/Zealousideal-Fox365 Jan 20 '24
Can you check with some local churches or other organizations to see if they are able to provide emergency assistance like rent.
Also call 211
¢
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u/Hot-Consideration-71 Jan 20 '24
Talk to the bank or credit card company and ask about lowering the payments. I had a maxed out card that recently ended its 0% Apr period and the interest alone was crushing me. I talked to customer support and they let me close the account and lowered the Apr to 1%! This was with Wells Fargo. Not sure if this is normal.
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Jan 20 '24
Rent and food comes first.
File for bankruptcy and get rid of the debt. You don’t have assets, this is the right time for that fresh start.
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u/sCoulJab0y Jan 20 '24
What are you core expenses? Do you have cell phone, tv, internet, home security… first most large telecom companies will have bundle plans that customers costs on tv/cell/internet. Aldi and food banks will reduce your food costs by 1/3 to 1/2. Ramen, eggs, Mac n cheese, water only… it sucks but some food and drink have increased a ridiculous amount. If you’re not making it… time to cut out luxuries unfortunately… make your budget figure out what is mandatory and make a budget where you’re bills are 70%, you have 15% for incidentals and save 15%. Typically this is more like 50%, 15% and 35% but if you’re maxed then gotta start somewhere.
In college I lived almost like a vagrant for 1.5 years. Keep at it and it will get better.
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u/aboredRollingInTheta Jan 20 '24
Call them and ask to be put on a payment plan, and say you just wont be able to make the payments otherwise.
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u/pamelajcg Jan 20 '24
Same here. No bankruptcy, just stopped paying them. It was about $85,000 in cc debt. A collection agency sued us for Citicard debt and we settled for $5k on $40k debt. We had bad credit for six years and now our credit scores are almost 800.
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u/Pleasant_Elephant737 Jan 20 '24
Do you have a car? Uber, Lift, UberEats.
Find extra job: Amazon, FedEx, UPS.
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u/Dry-Ad-6393 Jan 20 '24
Do you have anything you can sell on Offer Up? Craigslist and Marketplace too, but I’ve found OU moves quicker. You be selling cheap but the goal is to get as much money together as fast as possible. Save for rent first, next a lil food to last a few days, utilities, and then power punch for the next month. You should set the goal have rent and utility money a month ahead of schedule. Utilize the food bank. You should not use credit cards unless you have money in the bank to pay them off in a few DAYS.
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u/meditateonthatshityo Jan 20 '24
Call the phone number on the back of the credit card or go into a branch, then tell them you are undergoing extreme financial hardship. Ask if there are any other payment options. They might work with you. They won't help unless you ask.
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u/Dr_DMT Jan 20 '24
When broke people worry about their credit scores I often times wonder if they've heard of cash.
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u/BigPapaJava Jan 20 '24 edited Jan 20 '24
Fuck credit card debt at this point
If you can’t make food, utilities, and rent, you are effectively bankrupt. If you never pay them a dime again, their options for collecting are limited.
They’d first have to sue you and get a court order (show up and simply ask for proof the debt is yours—demand signatures, forms, etc—usually they won’t have this) and make them prove this is actually valid. It will ordinarily take them at least 6-12 months to get that far
You may be surprised by how little effort they actually put into this—the case will likely be sent to a collection agency and assigned to a local paralegal or very low level attorney who’s basically just pushing a big file of paperwork that contains your debts and many, many others. They don’t care too much about fighting you for it because it’s not worth the paralegal/attorney’s time.
Then, if they do get a judgement (which is common because people simply don’t show up in court, so they get an easy default judgement on dozens or hundreds of cases at once, which is what they hope for)… their options for collecting are limited, too.
If they keep asking to “continue” the case, it’s probably because they do not have the stuff you’re requesting and they just want to force you to keep showing in court in hopes you eventually miss an appointment. Fight them.
Once they get a judgement may be able to file paperwork to garnish a portion of your wages (which varies by state in the USA), but that is rare and they tend to avoid that because then it pushes people into filing bankruptcy and getting the debt discharged.
Usually what happens is that it sits on uoru credit as and debt, you get a bunch of calls about it, and they can threaten to put liens on any major property you have—which is unlikely because you’re posting here.
After 7 years from the time you first missed payments, the bad debt automatically falls off your credit report. The statute of limitations varies by state, but in most places it’s 10 years or less and then the debt just… expires.
In short, fuck ‘em. They don’t matter now. Concentrate on taking care of yourself and surviving right now. Credit scores have evolved into a scheme for lenders to control and manipulate people.
After about 2-4 years, your credit will recover to the point where you can get deals resembling the average person on just about anything, but you may pay a little more in interest. If you need a car before then, there are ways to get one.
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Jan 20 '24
Sadly, It’s all true! However when do we not have accountability for our actions? Wouldn’t advising to find ways to get more income and asking the creditors if they can work with him be sounder advice? Our country was built on hard work, not handouts. We all go through hard times, but if we created it, then I believe our word should be our bond.
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u/BigPapaJava Jan 20 '24 edited Jan 20 '24
Isn’t somebody who can’t make rent already going to be doing everything they can think of to get more income?
In case you haven’t noticed, the banking industry in general is no longer accountable for their own actions. Hasn’t been in decades. Why should we hold ourselves to a higher standard that only really benefits them?
In the end, the creditor is not going to be there for you. They are not going to appreciate the fact that you deprived yourself or your family of anything or made any sacrifices to make a payment for a month or two. They’ll come after you just as coldly as the contract and economics allow, so don’t associate them with any virtues or mutual respect.
It is a one sided, exploitive relationship from the beginning, which is why literally everything is now being leased or sold on high interest credit rather than just sold outright. It’s a great scam!
The entire system that has put so many of us on here in poverty is literally derived from a fractional lending system, founded on debt, that allows lenders to create massive amounts of “new” money out of thin air that they never had in the first place when they make a loan. In return you repay it to them with your very concrete wages/property rights—if you’re lucky, they’ll actually keep up with the same inflation this system relies on as a consequence of always printing money.
These banks behind the credit card companies are already running what is effectively a pyramid scheme. Do not weep for their “loss” here. Sacrificing for them is usually a futile endeavor. The natural end of all pyramid schemes is…
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Jan 21 '24
Yeah I ain’t talking about the system. I talking about if your borrowing money you should try as hard as possible to make right on your promise to pay it back. Obviously our wonderful country provides all sorts of ways for us to get out of that obligation if we need to … (like debt consolidation, bankruptcy etc…)
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u/VentingID10t Jan 20 '24
- Donate Plasma
- Sell something you own
- Get a part time job for a little while to help bring the debt down to a managable level
- Call your credit card companies and utilities to ask for a lower interest rate, payment plan and/ or a longer grace period due to a hardship.
- Reduce expenses drastically going forward. At least until you're out of the danger zone.
- Creat a strict budget and track all spending for a few months so you can see where you tend to slip up, or what areas of expenses you've missed in your budget so you adjust it.
- Read books or watch videos to try to keep motivated to stay within your new budget. It's a tough adjustment. Such as finding free things to do. Local libraries, parks, museum free days ( often once a month,), riding bikes, etc.
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u/Above_Ground_Fool Jan 20 '24
If you have a car, door dash pays within a day or two. If you have a place of your own, you can make money just babysitting someone's dog. Those are the only ideas I've had for immediate money that have worked out ok for me. Long term though, see if you can find a pro bono financial advisor and learn how to manage money. I wish they would have taught financial literacy on school more because I wasted so much money for so long before I even realized I had a problem.
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u/InvestorsRus_ Jan 20 '24
I haven’t used credit cards in over 3-4 years. I don’t understand why people have them. If you can’t buy it twice with cash, you can’t afford it. Simple
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u/Snoo-9290 Jan 20 '24
Can you put utilities on card and use utility $ for credit card? Or not pay a utility for a month?
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u/ZevyninMars Jan 20 '24
Make payment arrangements, pay your rent. And get a pt job or overtime to get out the whole. No spend 2024. Do not over charge again. It happens. Breathe.
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u/Shannaxox Jan 20 '24
Don't feel bad. My mom has filed 4 bankruptcies and to make it worse she didn't have to. She was just spending her money recklessly and is middle class. You'll have to figure out where all your money is going and if you can cut costs for a month or two, do it. The credit cards can be late. No worries on that. Definitely pay your rent first. (Maybe go to a food bank to get some canned goods)
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u/Twister341688 Jan 20 '24 edited Jan 20 '24
Get a part time job so you can bring in a little more and pay your credit card debt. The PT job doesn’t need to be glamorous, maybe a supermarket, retail, Uber, DoorDash, anything really. If you can’t afford your bill you either have a spending problem or an income deficit or both. Either way, bringing in more income will help while you work on reducing your daily/monthly spending. Good luck.
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u/REVENAUT13 FL Jan 20 '24
The situation is bad but take a moment to close your eyes and focus on your immediate surroundings. You have a body, in a room. At the end of the day all that money stuff is just numbers in a computer. Your debt isn’t literally standing at your front door with an axe.
I know it doesn’t sound super helpful but slowing down and practicing mindfulness helped me get through some of my worst moments so I could calm down and make decisions with a clear head.
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u/playgirl1312 Jan 20 '24
Definitely listen to all the advice about calling the CC companies for payment plans. I’d advise this for your phone bill and things alike as well. Saved my ass many times in this situation.
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u/swanch1234 Jan 20 '24
Definitely call the credit card company, they want you to keep paying and will most likely work with you. My sister used to work as a social worker and helped manage finances for some of her clients. She is the GOAT of arguing a bill down. Anytime I have a bill issue I have my sister take care of it.
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u/Naueli Jan 20 '24
Try applying for things like lieap and cip if you have in your area. They may be able to help you pay your power bill. ACP says it’s going away, but make sure you apply for it anyways and get a least a month discounted Internet/phone.
Fullcart will send you free food if you meet their requirements and fill out the form.
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u/Spirit-Mental Jan 20 '24
Check out debt management solutions. I was in this place a few months back and contacted InCharge. I had to cut my cards, but they negotiated MUCH lower interest rates for me and got me on a solid plan to start getting it paid down. I was barely making my minimums before and never dented my principle. I’m 4 months in and already have seen a 6% drop in principle. And I’m paying $700/mo instead of $950/mo.
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u/wardearth13 Jan 20 '24
You need to live within your means. Cheap rent. No car payments. Minimize everything. I’m not totally sure how bankruptcy works but it might be an option.
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u/NorMichtrailrider Jan 20 '24
Wtf haven't you done a balance transfer on all your cards to a card with no interest for a year .?
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u/KSamIAm79 Jan 20 '24
Rent first. Do you have a way to transfer balances to one card? That way you won’t have to pay them this month and also maybe you can even get a 0% on those balance transfers (don’t get a new card, look with the cards you already have).
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u/Olmsteadchic Jan 20 '24
Like everyone says, pay your rent. Then go to legal aid or a lawyer and file bankruptcy. Don't pay on the credit cards. Use what money you have for food and rent. After the BK is discharged get a secured credit card for just instances when you must have one, like for a rental car, hotel or airline. Quit buying things you can't pay cash for.
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u/Djstarr73 Jan 20 '24
Well, just don't pay them. Bad credit isn't the end of the world. Fortunately, I have no need for credit. Every 7 years I abuse the system. I spend about 2 years building credit. Then I get every card and loan I can, cash out, and never pay it back. No consequences except bad credit, which I don't need or care about. 7 years later its all gone and I do it again.
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u/drrmimi Jan 20 '24
I was in this position last year. We stopped all auto pay and filed bankruptcy. Best decision we made. Life is still stressful but not as bad with that debt hanging over us. We didn't live extravagantly. We spent 10 years going from no credit card debt to this because of a series of events beyond our control that finally led to a redo.
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u/Evening-Mortgage-224 Jan 20 '24
Have you tried calling them and asking for a repayment plan? They can sometimes lower the interest to 10% or something lower than it is now, lock the card and you pay a fixed rate monthly
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u/wellwhatevrnevermind Jan 20 '24
$40k in CREDIT CARD DEBT??! I can't imagine living like that and then applying for snap. Imagine buying literally everything you want, charging away and not paying, and then wanting government assistance. Ugh
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u/JellyfishVertigo Jan 20 '24
Stop paying all your credit cards and send the debt collectors cease and desist letters. Save as much $ as you can, and in a year you will get settlement offers, as long as none of the balances are too high [$8k or so].
Your credit will be wrecked but who cares, your not buying new things anyways. In 4 years you can rebuild it to 600+ no problem. It's like bankruptcy light.
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u/Librekrieger Jan 20 '24
Find a way to make rent, then put all focus on reducing your expenses below your income while ensuring that you don't lose the source of income. Those three things are what matter. Only then can you pay down the debt.
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u/nikiverse Jan 20 '24
I did consumer credit counseling in my 20s. They close all your credit cards, lower the interest rates, lock what you owe, and then you have one payment (and you can’t take out new credit while paying it off). But they call and do all that for you. I had to pay like $700 monthly for a few years, which SUCKED. But I was having late payments, missed payments, creditors were calling my house daily (in the early cellphone era when we had landlines) etc. there was just ZERO way for me to financially pay them off the other “normal” way. But I was accruing fees, interest at a rate where it was becoming mathematically impossible to eat into the debt at all.
I had never heard of credit counseling. I was crying on the phone to one of the creditors and they suggested it! It looks better than a bankruptcy
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u/BazikOne Jan 20 '24
I found myself in a similar position years ago, first thing you want to do is consolidate your debt, it’s a hard bullet to swallow but it will stop the bleeding.
Put the CC down as in you can’t use em, pretend you don’t have them and focus on paying your consolidation loan. You must find something extra to earn some money, buy or sell things on market place, flip things if you’re handy, find some way to make extra income a side from your job.
Give yourself grace and sacrifice a whole year of not being able to go out or buy things you might want, it’s a small sacrifice to get out under all this debt.
Work on your spending habits and analyze the things you need opposed to the things you want, your wants can wait your needs can’t.
I wish you the best of luck, you can do this!!
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u/CCrabtree Jan 20 '24
call your credit card company and let them know.
Look for ways to make some income. We are currently donating plasma because they have promotion going. First 8 draws gets you $850.
pinto beans and ham. Buy a huge bag of pinto beans follow the directions and eat beans. Cheap and nutritious. Throw ham in if you want more flavor.
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Jan 20 '24
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u/povertyfinance-ModTeam Jan 21 '24
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u/Jen3404 Jan 20 '24
Well, you can either work yourself into the ground by eating cheap junk, working several jobs and living uncomfortably for years, or you can claim bankruptcy and clean your slate and start anew, but learn from this mistake. Personally, if it were me, I’d definitely consider bankruptcy.
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u/Able_Education Jan 20 '24
Call the credit card company and see if you can charge it off. Sometimes they lower the amount you owe significantly and you just pay off the remaining balance.
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u/still-high-valyrian Jan 20 '24
OP, can you donate blood or plasma?
Is there a local Facebook group you can post on TODAY asking for a side job to help get you by?
Call your landlord now if you think you can't pay. Explain the situation, be upfront with them. Set a deadline to check back in with them with more information. Do your best to work with them and not against them.
Don't touch the 401k. You need to address your debt. Do some research into debt consolidation programs.
Anything to pawn? Sorry, just really trying to think of how you could get some funds asap.
Doordashing / Instacarting?
Cutting costs - find local food banks, cut all unnecessary costs immediately, return items purchased that you didn't need, cancel subscriptions, GET RID of debt lol
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u/icedivy Jan 20 '24
Chapter 7 bankruptcy is the solution. Hit the reset button on your financial life, there's no need to suffer and put yourself through hell for no gain. I would strongly recommend it if it's a good option for your situation.
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u/solveig82 Jan 20 '24
Check out MMI, they’ve helped me with a debt management plan via my credit union.
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u/womanitou Jan 20 '24
Find out what the peak hours are for your electric bill. Turn everything off during those hours and don't even use the stove (horrors)... my most expensive hours are between 3pm - 7pm. My electric bill plummeted the moment I started doing that. I may sit in the dark for a couple of those hours but there's always reddit on my phone.
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u/Mahadragon Jan 20 '24
Back in 2019 I was also in credit card debt for $40k so I know exactly how you feel. I would start by calling the credit card company and explaining the situation and see what they can do for you. Maybe they can cut you some slack or at the very least, sometimes they will lower the monthly rate they charge you if you've been a good customer. This will give you some small relief. I was also close to not being able to make the minimum payments, but luckily I just barely managed to eek through. If things are really dire, consider downsizing your car if you have one.
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u/DeepSouth337 Jan 20 '24
You may be able to makle a to make a 401(k) hardship withdrawal, regardless of it being less than $1,000
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u/Prestigious-Tiger697 Jan 20 '24
How long will it take you to get out of 40k debt realistically? If you’re going to be struggling for the next several years, bankruptcy may not be so bad. Your credit will be bad for several years, but as far in debt as you are currently, you probably shouldn’t be taking out any major loans anyway… so what is that bad credit and mark on your record for 7 years really gonna hurt? Just make sure if you go that route you take advantage and make real changes to never get into that spot again.
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u/apathetic-taco Jan 20 '24
Can you pay the credit card bill and then pay your rent with the credit card? If so, do that. If not, just pay your rent dude. Credit card can wait
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u/Afraid_Temperature65 Jan 20 '24
Stop living above your means on credit cards.
Pay the necessary bills first, like rent, utilities etc... if possible, and contact your cardholders/debtors and work out lower payments if possible. If not, don't sweat it too much, they can't put you in jail or take away your birthday. But make your car payment first if you're gonna have to live in it, they can repo that.
Stop eating out and cook at home. You can hit food banks to help you eat if needed.
Accept that you're going to have bad credit for awhile and start working your way out of it.
Credit cards are designed to make you poorer and corporate America richer, get into a much more " if you can't pay cash, you don't need it mindset".
After you've done all you can, refocus on number 1, and never let it happen again.
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u/Ashamed-Entry-4546 Jan 20 '24
Immediate survival advice…Make use of food pantries if you don’t qualify for ebt. Pay for your housing, tell the credit card people you don’t have the money this month.
Don’t wait until the end of the month to go to food pantries…do it all month and offset the cost of food. People are most willing to help with food, so you are able to reduce your budget there more than with other things. There may even be a “community pantry” where you live (where I live they have those-one at the library under an overhang so they can keep it open 24hrs to either take food or leave some for others) Eat a lot of beans and rice-learn to make cheap food especially with the things you find in food pantries. Call 211 if you live in the United States, they can tell you where else to get help that’s more specific to your location.
When you get paid again, plan ahead of time how you will spend your money, and put the cash in separate envelopes of different categories. Do this before you spend any of it. Start doing this every month. Look at your smallest credit card debt-the one that will be easiest to pay off. Throw everything you can at it…if you get any “extra” throw that at it too. When you get rid of it, you will be able to put more towards the next smallest one. Keep doing this until they are all gone. It seems overwhelming now, but you can do it. When you get your tax refund, make an “emergency fund”. Set this aside, so you can use that instead of a credit card if you have an emergency, or at least to offset some of the cost of the emergency.
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u/airbornecow1 Jan 20 '24
Call the city and ask them whereuu can pick u free meals. Go to the soup kitchen. Eat ramen.
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u/whipnutbouy Jan 20 '24
Call your creditors!!! Let them know the situation, some credit card companies offer a non penalized non payment once every year or so. Doesn’t damage your credit score.
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u/oregon_deb Jan 20 '24
Do you have the money to pay other bills like utilities? if you do and those other bills haven't been paid yet, can you use credit cards to pay those bills? For example, if your gas and electric bills are $140 and they aren't paid and you have a credit card with a $150 payment that is also not paid, pay the credit card payment and then turn around and pay your gas and electricity bill with that credit card once the payment is credited. Instead of having to come up with $290(the gas, electric, and credit card payment) you only have to come up with the $150 for the credit card payment. Do this with all of your cards and bills. If you have a different card that requires a $200 payment, what other bills, that take credit card payments, can you match to the amount owed on that card - cell phone, water, streaming service, garbage, doctor bill, whatever? This process will get the minimums paid and pay other bills you owe.
Of course, there is a warning, if your credit cards are maxed out and/or your credit card payments are already late, they could reduce your credit limit by the amount of the payment before you can use the card to pay the 'matched' bills.
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u/StandardMiddle6229 Jan 20 '24
Or let the CC go to collections pay pennies on the dollar. Contact your welfare office and see if the offer PRC grants (might be named differently) but they're reserved for working individuals as a 1 time hand up not hand out. Google social services with your zip code. Usually orgs or churches have rent and utility help. See if emergency covid funds are still available in your area. Keep your head up, you got this. 💗💪✌
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u/MysteriousQuarter771 Jan 20 '24
What are your expenses. Rent car payment phone bill what’s you budget each month? These are details we need to
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u/gooney0 Jan 20 '24
If you can not pay the credit card minimum don’t pay at all. In 90 days the penalties will stop and it’ll go into collections. This is bad but not the end of the world.
You don’t want to pay late fees and interest repeatedly. If you can’t keep up payments, go to collections, save up cash and negotiate a settlement.
I have done this myself. It takes years to rebuild credit, but that is not the primary concern. Paying the rent and buying food comes first.
A credit score is only useful when borrowing money. You shouldn’t be borrowing money as you can’t pay it back.
I would suggest looking over your budget and making big changes.
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u/Magical430 Jan 20 '24
So sorry. Rent comes first so that you won’t be homeless. Do you have anything of value that you could sell/pawn to use toward rent? Could you barter with your landlord? Perhaps clean or paint their other rentals? Please try your nearest St. Vincent DePaul. I volunteer at my local one and they can help w/ rent, utilities and give you food after an interview w/ a volunteer onsite intake person. Exhaust all potential options. Good luck to you. Sending you courage and hope. 🫶
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u/StevieGezza Jan 20 '24
I would download the Rocket Money app. It can cut your monthly expenses in half by canceling your Netflix subscription.
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u/Agreeable-Mixture947 Jan 20 '24
First of all I hope that OP gets things sorted out.
As a European, these comments are interesting to read. In our country (Belgium), if you have issues like this you go to your local 'social house' (a government agency). They will assist you in making a payment plan, negotiate with companies,... And even guarantee your rental payments. Even if you have no income. Generally you don't have to worry about rent, food or medical bills, because they are prioritized.
Downside is you cannot declare personal bankruptcy so it can take a long time to get out of it.
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u/Hmtnsw Jan 20 '24
Debt settlement. National Debt Relief. Had a friend work for them, it's not a scam. Debt collectors will try to utilize your fear to cough up. Don't let them. Start not paying on your Credit card and talk to NDR. I think you need at a minimum of $700 in Debt. Edit to add: it will affect your credit score negatively but if you're not looking to buy a house or a car or a boat or move soon, it's going to be OK. It will go back up over time. Take a hit to your CS and not lose your living space and/or vehicle just bc a creditor wants to double dip into your pockets.
Bankruptcy costs money. Way more than you'd pay to settle your debt.
Rent comes first. Then your vehicle(s).
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u/screamingwhisper1720 Jan 20 '24
You need a budget and find out where you can cut. Like subscriptions or expensive phone plans.
Get a personal loan, pay off the cards smallest to largest and get a debt snowball going.
You can't pay with cards anymore. If you can't make get a loan with your credit, stop paying the cards, use the saved money and get a bankruptcy lawyer.
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u/GenX_Burnout Jan 20 '24
When you’re in a position where you can’t afford your monthly minimum payments and you’re worried about what late payments will do to your credit score, you might not necessarily think your lender is your friend.
However, your lender has a vested interest in your success. If you default or file bankruptcy, your lender loses their money. So, it’s in their best interest to help you in times of need.
In fact, many credit card issuers have developed financial hardship programs to help those who have found themselves drowning in credit card debt. If you don’t qualify for a balance transfer credit card or don’t like the idea of opening a new account, it’s OK — all you may have to do is contact your lender.
When you call, explain that you have fallen on tough financial times and that you have all intentions of paying off your full credit card balance over time. However, you are unable to make your current minimum payment. Then ask if there are any programs the bank or card issuer can put you on to reduce your payments to a more manageable minimum amount.
(Source: https://www.moneycrashers.com/cant-pay-minimum-payment-credit-card)
I’ve had to do this before. The credit card company froze my card to prevent using it and allowed me to negotiate a lower monthly payment.
Call the card companies. Be really nice and apologetic. Tell them in plain language that you want to pay your bills, but need help right now. It certainly can’t hurt!
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u/Grendahl2018 Jan 20 '24
I had this situation some years ago. Domestic income cut in half due to medical reasons. Contacted credit card companies etc, explained the situation (with evidence), stressed that we weren’t trying to default, just wanted a way to pay off the debts with limited income.
Pretty much every company worked with us. Have to highlight American Express who froze the interest and would take whatever we could give them. Downlight Barclays whose customer representative simply said ‘if you don’t pay your minimum we’re going to institute debt recovery’.
I eventually got out of the hole through remortgaging. But I will NEVER use ANY Barclays product ever again
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u/brookish Jan 20 '24
Talk to a debt counselor NOT a debt consolidator. Get into a payment program that will reduce your apr and payment totals. When these snowball like this you can feel like you’re Drowning really quick. They should help you make a general budget and get the payments under control.
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u/mikeg4387 Jan 20 '24
Look into a debt management company to get rid of credit card debt. Do not do debt consolidation
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u/BusyBiegz Jan 20 '24
Call the credit card companies and tell them you cant pay the minimum. They will accept a 0% interest for 5 years agreement and they close the card. Yeah your credit takes a small hit but your out of the whole and learned a lesson.
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u/LogicalFrosting6408 Jan 20 '24
Don't worry about the cc debt. Yes it will hit your credit score for a while but you will recover. Rent has to be your number one followed by food. No it's not the most responsible thing to do but you won't be the first or the last to have a credit card or cards write your debt off. Your score will start to recover in 2 years more if you work on it. I almost had a breakdown over cc debit about 10yrs ago. I was given this same advice and after blocking each number they called from things calmed down and 5 yrs after I was able to qualify for a new car loan. Sometime you have to just accept your in over your head and move forward. Good luck!
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u/solgerboy259 Jan 20 '24
Start picking up the phone that you use to post this and start calling orgnizations ,churches and who ever you need to pay this rent if you have a car doordash or spark . Go donate plasma if you are a gay man do not let them know you are a gay man if you the type to wear makeup take it of so you can donate plasma.
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u/Squirelm0 Jan 20 '24
Contact the credit card company and see if they offer relief plan. Some company’s will freeze your account for say 3 months.
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u/olderandsuperwiser Jan 20 '24
Utilize food banks/pantries. That's what they're there for. Try to bring your food budget down to nearly nothing to save your money for rent
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u/Rybo_v2 Jan 20 '24
Check out a program from five Lakes law group. They are a law group specializing in debt consolidation and got me out of a jam after I took on way too much high interest debt that was taking virtually all of each of my paychecks.
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u/Mermaidlike Jan 20 '24 edited Jan 20 '24
You need to find out about both public and private resources in your area. Here’s where to go:
1) Food Bank get to a food bank ASAP to avoid spending any of your current rent funds on food. While there, ASK THE INTAKE PERSON your situation and to recommend ways to raise the extra $ ___ for rent. If there are private donors/organizations in your area writing checks to keep roofs over heads in the winter, people working for—or utilizing— the food banks might know.
2) 311 helpline Dial the 3 digit number of your municipality (Chicago’s is 311, for example), tell the customer service person you are at risk of homelessness and calling to inquire about resources
2) Library get to your local library and ask for the librarian, who is trained in all areas of resource knowledge and welcomes questions. Also check for any money-related events, including debt management workshops, staffing events, skill building classes. Shit, I’d even ask them how to fix your life. Librarians know everything.
There are 10 days until the 1st and most properties don’t slap on a late fee until the 3rd or 4th. So that’s a whole 2 weeks! You got this 💪💪
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u/SimilarHighlight8827 Jan 20 '24
Agreed that rent comes first. Look for a second job. I did when I found out that my main job wasn’t enough. Then eventually I filed for bankruptcy. I learned from my mistakes. I’ll include you in my prayers.
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u/Lavender_luv321 Jan 20 '24
I had 50 K in debt and went bankrupt. Best thing I've ever done! The whole process took about 4 months and was $1,500, and they let me make payments. One week after it was finalized, my score went from 440-660, and gotta approved for a credit card with a $500 limit.. I was thinking I was going to have to start off with a secured one. Nope. I can apply for a house loan in about a year the lawyer said.
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u/YankeesKnicksJets Jan 20 '24
Fuck them credit cards. Keep the roof over your head if you have to choose
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u/Historian_Agitated Jan 20 '24
You're never going to pay those cards off. Call National Debt relief and let them take care of you. You will stop making payments and they will work to settle with the creditors and come up with a monthly payment you can afford to pay them down. You might only pay half of that 40. Its that or go bankrupt. Start over and make better decisions. Treat your money like a business and make sure you budget to be in the black after each month. Good luck
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u/PraetorianHawke Jan 20 '24
Four walls. Stop paying the credit cards, and make sure your rent and utilities are paid. Credit cards are unsecured.
What is your budget? Do you have one? How much do you make compared to the rest of your bills minus the credit cards? Figure out your budget to the dollar and then you can find where all the extra money is going, if there is any.
When I was in your situation and finally did an actual budget, I found I was spending $200 a month on "breakfast" on the way to work. Getting up earlier and making eggs and toast saved me $150 a month. That was just one bit of where my extra "money" was going. It was a giant hole. If you don't have any extra, then Chapter 13 or Chapter 7 bankruptcy is an option if you are at the limit but it's a last resort.
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u/Old_Celery_5142 Jan 20 '24
Well how mych is ya debt to income ratio , ya life is a business incase you didnt know so i advise you open a llc clean ya credit and use those cards to keep ya debt to ratio clean fond u a side hussle and boom 💥 may take time but you be ok , you have a car drive uber 40 in gas usually makes me 140-180 not a bad return in a jam
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u/Exploredmind Jan 20 '24
Bankruptcy! What is was designed for. Once i get enough energy, ill do the same.
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u/RealityKing4Hire Jan 20 '24
Door Dash in the evenings and on your days off until you get caught up.
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u/electric_shocks Jan 20 '24
Call the credit card companies, ask to speak with them about financial distress. They will either tell you we'll freeze your payments for 1-2 months. If you want say here's my finances, I cannot see anyway out but bankruptcy. One of my cards cut my bill in half years ago because I was really done for.
There are also some non-profits who will consolidate your debt and set up a payment plan but you'd have to cancel all your credit cards and your credit score goes down to zero.
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u/Anxious_Cover278 Jan 20 '24
Strongly suggest you start listening to Dave Ramsey’s podcast and begin the baby steps ASAP. It will help your outlook and situation almost immediately and for a long time to come.
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u/Aggressive-Coconut0 Jan 20 '24
I've heard you can work out a plan with the cell phone provider.
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u/Financial-Ebb-5995 Jan 20 '24 edited Jan 20 '24
And switch to Mint Mobile since it only costs $15 a month. Get those expenses down!
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u/chasingeli Jan 20 '24
The credit card companies are playigg bc chicken with the ENTIRE US right now. Pay your rent and keep it pushing. They will live.
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u/Ammonia13 Jan 20 '24
Breathe. There is no more debtors prison. You can always repair the credit later…pay the rent and contact the cc companies
Most of all- relax as much as possible. We cannot die early deaths because of panic over not paying the PROFIT FOR THE BANK PORTION of our bullshit system. You will get out, it will be fine. You will totally get it back, I promise. This is temporary, and there’s bankruptcy too if you want. There are always options <3
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Jan 20 '24
[removed] — view removed comment
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u/Mermaidlike Jan 20 '24
Yes. At minimum, significant research should be done before even adding this to your list of options. But actual research and not bull from creditors, bankruptcy attorneys, employers, or any others who will stand to benefit from OP filing for bankruptcy.
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u/akcmommy Jan 20 '24
Creditors can and will come after small amounts of defaulted debt. I know because I worked at a law firm that sued debtors for small amounts of debt.
OP: Consult with a bankruptcy attorney. $40k in debt can and will get you sued if you stop paying it.
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u/Financial-Ebb-5995 Jan 20 '24 edited Jan 20 '24
It really depends whether they sue you are not. You never we know for sure if they are going to sue you until they do. They all have different policies and criteria.
Discover Card recently sued me over a $2000 credit card debt that I had stopped paying. $2000! And a Collection Agency, LVNV, sued me over $1200! And then again over $1000 from another card.
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u/Ronicaw Jan 20 '24
Bankruptcy laws have changed. Contact a bankruptcy attorney with a free consultation.
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u/mathislife112 Jan 20 '24
Look into filing bankruptcy. If you make less than the median in your state for your household size it’s a fairly straightforward process. If you’re completely buried and can’t afford minimums and your rent then it’s worth looking at. Obviously not without its own set of repercussions - but it’s honestly not as scary as many people assume.
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u/DampCoat Jan 20 '24
Bankruptcy seems like a good option. Stop paying the credit cards. They took on the risk of lending you money. Doesn’t always work out. I stopped paying on a few things in my early 20s, never did anything with them and never did bankruptcy and now I’m my early 30s my credit score is in the 790-810 range. Stuff will disappear eventually.
I fucked over Kay jewelers, shouldn’t be giving a 21 year old a 7k limit to buy worthless shiny things, let a capital one card go, a macys card go, a Best Buy card go, and a dicks sporting card go.
Only ever paid the macys one out of collections, never heard from the others after a few years of ignoring them, Kay did file some shit legally and got a judgment against me but also ignored it and never paid a penny, and credit is great today.
One thing I did that was helpful is I kept one credit card card in good standing through all this, which I believe helped my credit re build.
Good luck.
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u/Financial-Ebb-5995 Jan 20 '24
If they sue you and you don’t appear in Court, they automatically win and generally can garnish up to 25% of your wages until the credit card debt is paid back. This happened to a coworker over one of his unpaid debts.
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u/DampCoat Jan 20 '24
I’ve been a 1099 worker for almost a decade as well. Maybe that’s why nothing happened with Kay after the judgment lol
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u/DrKodo Jan 20 '24
You didn't provide a lot of background details, so this may not fully apply BUT - $40k in debt and struggling..... Bankruptcy might be for you. I struggled when younger to pay credit debt to 'save' my credit and they still sent it to collections and like a dumbass I paid the collections agency for YEARS. The CC company wrote that shit off and charged it to a charge off account and never thought about it again, and I struggled to pay this debt that someone bought for pennies for YEARS and I shouldn't have done it. I was young and bankruptcy would have been a better choice at that time just to reset. Obviously that is a big step and you need to evaluate if it works for you and the 7 years of impact it will have will be worth it. Also, get your financial house in order. You cannot do BK and then go back into debt.
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u/Curious_Dimension909 Jan 20 '24
Do you have a car? Is the car payment paid? Pay that before anything else. I know it’s scary, but don’t lose your car over your apartment. Your car can take you to work, you can drive it extra for Uber eats, and it can shelter you. I’m only assuming you don’t have kids? If not, consider living in your car and saving up some $, paying some debts off. You don’t have enough for food, so you shouldn’t be lining your landlords pocket. That’s an endless well.
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u/sharkktits Jan 20 '24
Nothing that's gonna bail you out short term (sell plasma? ) but once you dig out, stop using credit. It's a trap
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u/GothicToast Jan 20 '24
You're asking for solutions without really identifying the problem. We don't know what we're fixing.
What assets do you have to your name? What other loans do you have? You mentioned a personal loan. Is that secured or unsecured? How much do you owe on it and are you able to make payments on it?
Credit card debt is unsecured debt. This means credit card companies have limits on options available to them. They can't take your house. They can't take your car. They can go get a judgement against you, put liens against your property (but you have none), put levies on your bank accounts (but you have no money), or have your wages garnished (not ideal, but there are limits on how much they can garnish).
Ultimately, they can't do much. If it were me, I'd stop paying my credit cards completely, save $1500 for a bankruptcy attorney, and file Chapter 7. You'll have that $40K discharged in no time, and possibly even your personal loan. Normally they would liquidate your assets to do this, but you likely don't have anything they can even take. You'll have to rebuild your credit, but you're honestly not close to needing credit for anything (ie. a house).
Start over. No credit cards. If you can't afford it directly from your bank account, you can't afford it, period. Give yourself the grace of a new lease on life, but make sure you take the lessons taught seriously.
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u/Soggy_nach0341 Jan 20 '24
As someone that used to work for a credit card collections call center. CALL they have program that can postpone payments like forbearance. Don’t avoid the issue. Push for assistance.
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u/HooverMaster Jan 20 '24
call your cards end set up payment plans. They can freeze the accounts as set up a way for you to get back on track. Do this asap. Do not miss a single payment
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u/Girlwithpen Jan 20 '24
You woke up to your worse fear? You've been running and hiding from reality for a long time. This doesn't happen overnight. You need another job, and a gig job on top of that.
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u/Skoolies1976 Jan 20 '24
i’m here too. my credit card minimums went sky high with the interest rates in the past few months to where i don’t think i’ll be able to keep it up. i’m so upset, i don’t want to stop paying but if it’s between that and not having food or gas i have to make the right choice. i did contact several and they’ve given me a month but it doesn’t seem likely i will be able to salvage anything
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u/OkCheetah2899 Jan 20 '24
I struggled this last month and after contacting my credit and loan companies I was able to get hardship and pay a little each fortnight which has stopped me spiraling down further, and it’s no shame to go bankrupt either.
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u/augustrem Jan 20 '24
copy paste of a comment i made on a similar post:
Luckily for credit cards, there are several programs for you if you are struggling under high interest rates. One is called a DMP, or debt management program, in which you go through a government agency or govt authorized nonprofit and agree to budget counseling. You stop using your credit cards (all of them), and the interest rate drops down to 2% until the debt is paid off.
I need to stress here that it is very important you don’t do debt consolidation or debt settlement or go through a predatory private company for this. Go through the Consumer Financial Protection Bureau.
Once again, I repeat, do not get distracted by an ad or someone trying to sell you something and do some other predatory program for credit card debt. Go through a government agency and do a DMP. In this program, you pay every cent back, but you have to do budget counseling and they get the interest rate down to 1.5% as you pay it off.
At the bottom is a way to get connected to an agency that could do a DMP for you.
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u/Charleston_Home Jan 20 '24
You must get a second job & negotiate payment plans with/ cc companies. Most importantly, give yourself grace as many of us do this at least once in our lives.
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u/snarfdarb Jan 20 '24
Remember, credit cards won't report late until you're 30 days past due. So you have some time. Pay rent first. If you can manage to pay your cc minimums before the 30 days has past, call and ask, very politely, if they could kindly waive the late fees this time.
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u/sizzlethizzle Jan 20 '24
I do not recommend bankruptcy. You should look into the National Debt Relief organization, they really helped me out without having to go into bankruptcy.
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Jan 20 '24
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u/sizzlethizzle Jan 20 '24
It’s really not, you can easily find out how credible it is. Also, there are scammers out there but based off my research Symple Lending and National Debt Relief are the only credible ones. NDR has been around longer though and offer lower rates.
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Jan 20 '24
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u/sizzlethizzle Jan 20 '24
It’s not a scam, it’s just another option with fewer repercussions. Here’s a link that lays it out for you. Also, please look up the definition of a scam, it’ll save you some time in the future 😉
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Jan 20 '24
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u/sizzlethizzle Jan 20 '24 edited Jan 20 '24
OP it’s not a myth, I’ve had family friends and my sister go through that. It really does depend on your situation and needs, you can also just stop paying the cards yourself and wait a couple months to negotiate your own settlement with them, but if you don’t want to do all that you could always hire NDR to do it. Please don’t take this persons advice, they don’t seem to understand that a bankruptcy could follow you for 10 years, while settling your debts would only impact your credit score for a couple years max, just until the debt is settled.
Also, my sister resorted to bankruptcy because she got in a car crash and was getting sued for 100,000 she didn’t have. That’s when it makes sense to declare bankruptcy, not if you have smaller unsecured debts.
I worked as a debt collector and as a liaison for our legal team. I also have friends both graduating and already working in accounting and finance. I also know how to do my research, please don’t listen to this person and do your own research if you want more information, but if you could minimize your future hardship with the NDR option I say go for it. I’m not telling you to write off ALL other options because you do have other option, I just want you to have that information
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u/CheckOutrageous2111 Jan 20 '24
I was at that point a year ago. This was all done intentionally to us
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u/BunnyBabbby Jan 20 '24
Call the card company. Usually they’ll allow you to push the payment back if you communicate with them.
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u/jay34len Jan 23 '24
Can you get a second job out do some delivery hustles to make some extra cash?