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Do not use a retirement account to fix issues now. That is a last resort after all lesser means have failed or cannot reasonably be employed.

Make a strict budget and evaluate either the snowball or avalanche debt payment methods.

Call the credit card companies right away and explain your situation. They will work with you.

Sell your car, use that $3500 to get a vehicle that runs, as in a Toyota or a Honda from the early aughts, with 200k miles on it. Do not incur a whole ‘nother car payment. I mean that the cash from the sale of your car needs to completely cover the cost of the car you’re buying.

Is the personal loan from a friend or family member? Can that person do without payments until you can get a full time job or a second part time job?

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Im assuming your insurance is for car insurance? If so that’s quite a lot. Do you have a bad record? If not, then get that checked out. My car is $40K and i pay only $100. Make sure they’re putting you on low mileage usage if your not using the vehicle a lot. That’s what i did. My car insurance was also at $200 a month before i changed that. Also is your partner working? If they arent then why are you paying for child care. If they are then both of you need to do this together.

It’s a private loan, sorry. Not from a friend or family, but from Upstart. Gonna be tough to find a car for $3,500, I’ve looked and a ton of junkers even are asking $5-6k. I’m not a car guy either so it’s tough to tell what cars are in good condition and what ones aren’t but I’ll do my best for sure

I would do that if I had savings. I’ll be lucky to make $1000 this next month so I’ll just be hemorrhaging even more money

First thing get rid of that car. Apply for work from home positions. Then list debts smallest to largest, snow ball method pay them off. Listen to Dave Ramsey for motivation, 100% recommend him, I listened to him every day on YouTube and the radio while I was paying off debt. You will be debt free

Sell the car. Buy a beater with the surplus. Put the $439 a month you were paying for it towards debt.

Since you won't have a car payment, you won't need full coverage insurance. Re-evaluate your insurance needs to drop that payment.

Does your partner work? Can they? I get it if any job would earn the same as you would pay in child care. But can they babysit another kid in your home or something? Take in laundry? Get a job working at a child care center where they can take your son with them?

And you know this, but find a new and better job. Retail experience translates to a lot of different things. Customer service jobs, for example, can pay really well and tend to like people with retail backgrounds. Not saying it's going to be your dream job, but it could pay the bills. Once you get on your feet, then look into learning some skills to get a better job.

I would also not rule out bankruptcy. But if you go this route, you need to really address the reasons why you got into this situation in the first place.

Yeah. No bad record, just living in the state with highest auto premiums. Haven’t had an accident since I got my license 11 years ago. I drove 50 miles a day to and from work so I wasn’t on low miles but I’m trying to find something closer to me. She is working, but we split payments based on how much we make. She will be helping me with taking over more payments but I cannot ask her to give me additional money for those debts

One tip I suggest is to put the word out with everyone you know. Tell them about your car situation, and that you need a car for $3000. If they’re going to trade one in or something, that amount might be what the dealership would give them, so why not let you buy it for that instead.

Also, here’s how I choose vehicles: go to the library and look at Consumer Reports’ repair records as far back as they have issues.

Make a list of all the makes and models where the repair records are all red circles or semicircles, and not black dots or black semicircles.

Go through those repair records from book to book, and see which vehicles from your list have repair records that are getting better, vs. those who never seem to correct the problems, or they’re getting worse.

Then, narrow your options down to the good ones that stay good or get better over the years. That’s half the battle right there.

My dad dying and me being the primary care taker is how I got into this mess. Over the years it’s just snowballed. I don’t spend anything unless it’s for gas or groceries so I’ve already cut everything out. I just don’t make enough money. My partner works for a big company and works in an office. We send our son to day care.

Definitely trying to find new positions, just been applying to everything and hoping for a fall back.

I appreciate that advice. I’ll do that tomorrow. There’s a library near me.

I figured if I sold my car and liquidated my 401k, that’s more than half my debts gone right then and there. Doesn’t seem Bankruptcy worthy at just 15k of debt

The reason I say $3000 and not $3500 is because you need money for taxes, tags, and registration — incidental repairs, AAA.

See whether there are YouTube videos with tips on what to look for when buying an old used car.

You will also need to learn to do things like change your own brake pads, oil changes, and stuff like that, anyway.

You’ll become a car guy, by necessity.

Maybe also talk to mechanics about what they would recommend if they were in your shoes.

Hey! I bet there is some sort of car subReddit that might have just that sort of answer for you.

Also, join r/PovertyFinance for more advice.

Can you sell plasma? Places in my city offer $500 for your first month. Can you sell any personal items? Will you be getting a tax refund?

Don't SELL your car. Will not be sure if you can find a reliable beater for $3500. Call your credit card company, negotiate delayed payment and understand that your credit will take a hit for a while. If it goes on for 2 months, liquidate your 401k for hardship

I disagree with selling the car. You need reliable transportation for work and safe transportation for your child.

3k buys very little these days, especially if you aren't car savvy enough to fix things yourself.

Prioritize your debts: living expenses>transportation>everything else until you get back to full time employment.

If you can't pay the credit cards, you can't pay them. Not enough debt to file BK, unless you actually get sued.

FYI: 401k accounts are exempt from debtors, even in a bankruptcy. Don't touch the 401k.

Call all the insurance companies. Tell them you cannot pay and you want to negotiate down the total amount you owe. Read some articles about how to do that successfully. Then, sell your car and buy a much cheaper car (any chance you can do without a car). Put your previous car payment towards CC3, once it is paid off towards CC1, then CC2. Start working, but in parallel look for a higher paying job.

What does your partner do? Are you splitting finances? Marriage simplifies this kind of stuff, if you have a kid especially. Are you paying for rent or are you splitting 50/50? Who does most of the child rearing? Do you have equal incomes? Why are you talking about one income? If you can get around by Public transit: sell the car. Does your “partner” have another care you can share. If you get married, your debt will be “our debt” and your savings will be “our savings”. If your “partner” has $100k sitting in a savings account then this should be both of your problem not just yours alone.

first calm down. You can’t find a way to deal with it without sanity.

second, your financial management is not quite right… not sure why you put money into 401k given your cc rate is 20%. Can your 401k brings you any higher than 20%?

possible solutions, get a 0% intro apr cc And transfer balance to that card. Try your best to pay off the 0% card however you can! Selling car or get extra job or 401k withdrawl or borrow from friends. Key point, lower your rate!!!

What about pulling your child out of daycare and looking for an evening/weekend job? You could potentially share a car then too and put that 3500 toward debt .

401K accts often come with an employer match that makes it worth doing as long as you can pay the minimums on your cc. Also, if you are still employed, you can often take out a loan from the 401K balance. Doesn't help OP now, but those are reasons people do 401K and have cc debt.

Does she know about this debt or is it hidden from her? Are you guys married? Im assuming even if you arent you’re living together you guys are practically married even if not legally married because of the child. If she doesnt know she should know about your debt you should tell her even if you guys keep separate accounts. Hiding debt isnt good. It doesnt matter if she’s making 10% RIO on the market when you’re paying back 20%. Overall together you’re both losing money. For rich and for poor, all that stuff.

I see. Then suppose you put x dollars into 401k, they match another x dollars. Can you withdraw the 2x dollars to pay your cc first?

Early withdrawals on 401k accounts are subject to a ten percent penalty in most cases, so no. The flowchart says make the minimum debt payments as part of step 0, then get the 401k match (step 2), then pay off high interest debt (step 3) before going back to 401k (step 5). There are other steps, but in this case those are the relevant ones.

You just lost your job. You have time to collect unemployment and find a new one. You are not so far behind that you need to liquidate your safety net right now.