Submitted by SwpDevil t3_z76h0f in personalfinance

Hi guys I need some experienced and expert advice. I need help until I can get another part time job. Please and thank you!! 🫶🙏🏼

I currently owe $46,560 in loans and credit card debt total.

Loan Debt is

$18,155.79-17.87% APR and Monthly is $445.08 $5,527.18-12.54% APR and Monthly is $585.48 $6,026.94-12.13% APR and Monthly is $349.00

Total in Loan Debt is $29,709.91

Credit Card is

$8,752.76-25.74% APR and Monthly is $263.80 $1,699.90-24.99% APR and Monthly is $61.00 $1,912.60-24.99% APR and Monthly is $57.00 $4,485.25-17.80% APR and Monthly is $100.00

Total in Credit Card Debt is $16,850.51

Also, my Credit Score is currently at 689

I have an investment of $400-$500 a month

Should I consider debt consolidation which I was approve for $22,102.94 with Net of $21,000 with APR of 18.74% for 48 months with a monthly payment of $657.85 or should I consider accredited debt relief?

If I use the debt consolidation of $21,000 to pay off the $5.527.18 loan as well as the 3 credit card with the biggest APR as well as the rest into the $4,485.25 credit with whatever is left of the $21,000 debt consolidation loan. Would it improve my overall finance in reduce my compounding interest on credits cards as well as reducing my monthly payment so I can focus more on the other one and slowly snowball the rest of the loan debt?

If I were to consolidate my debt I was considered on paying off one of the highest monthly payment loan and all of the credit card or most of it starting with the highest APR first. This will reduce my monthly payment and save me the compounding interest rate from the credit card as well since I have cut them all up already until they send me new one when they are close to expiring which is 2-3 years from now.

Which is a better course of action? Because I am slowly dipping into my investments to make up whatever I am short every month after all the expenses. The loans are due to being out of work during Covid as well as my wife giving birth and the expenses during Covid raising my daughter. Total household income varies between $2,400-$3,000 a month and currently trying to look for another part time job. What is the best course of action at the moment?

I also have a verbal agreement with my ex to support my son $600 a month.

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Comments

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caringexecutive t1_iy4xlkb wrote

>I also have a verbal agreement with my ex to support my son $600 a month.

Go to court and get a real child support agreement.

The consolidation handles <50% of your problem and locks you into paying nearly 8 grand a year for 4 years.

You need to strongly consider bankruptcy. I imagine your credit already is not great, but this is high interest debt that's far over your annual income.

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caringexecutive t1_iy4yi4h wrote

yes, you're paying nearly 50% in interest over the life of this loan which is insane.

Seriously, with your low income and massive amount of unsecured debt you are a good candidate for bankruptcy.

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zeppo_shemp t1_iy4zhdu wrote

were the debts from overspending/disorganization? or was there something like medical bills that were out of your control?

you might want to check out Dave Ramsey's plan for basic budget boot camp and guidance.

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SwpDevil OP t1_iy4zxnj wrote

If I stop my investments and focus on one of the unsecure loan to pay it off faster would that help? Because the unsecure loan with a payment of $585 a month will be paid off in 9 months

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InteriorAttack t1_iy522s2 wrote

> accredited debt relief?

This means next to nothing. They are just going to let your debts default then charge you for doing it. You can do that for free.

> Total household income varies between $2,400-$3,000 a month

Not even close to being enough. Why is that total? Is there somewhere else making money? You are in bankruptcy territory.

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SwpDevil OP t1_iy52mco wrote

So even if I do a debt consolidation which would reduce my monthly payment by $600 a month and stoping the monthly investment, it still won’t be enough? I should also be getting another source of a one time payment of $11,000 within 8-9 weeks hopefully as well after double checking.

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InteriorAttack t1_iy53w6q wrote

> So even if I do a debt consolidation which would reduce my monthly payment by $600 a month and stoping the monthly investment, it still won’t be enough?

It's enough if you make it enough. The danger is you pay off the cards with the loan then immediately run up the cards again because you find out you still can't afford to live. It will take a true, dedicated effort to get out of this and not end up in worse shape.

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mistermephist0 t1_iy54fx4 wrote

Bankruptcy and stop investing. Do not invest until you are in a better financial condition.

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caringexecutive t1_iy55fey wrote

No, not really. You have almost $50K of CC/Loan debt and your household income is ~30K a year. You really need to fix your spending for the future and declare bankruptcy, you are a fairly perfect candidate (when your liabilities exceed your income/savings/assets).

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UnSafeButterscotch t1_iy5so0x wrote

As others have said, you really should consider bankruptcy. If you are absolutely against it, the only other option is to bring in more income.

You make $2400 a month (I always budget with lowest pay)

$600 to ex for kid $1379.56 minimum for loans $481.80 minimum for credit cards

That leaves you -$61.36 a month. You haven't told us your rent, utilities, food, car, etc expenses. Consolidating will not increase your income. Bankruptcy however will give you a fresh start. My brother did it after an emergency surgery sent him way over his ability to catch up and it really only affected him for the first 2 years. 10 years later, he is happy, healthy and has more buying power than he could have thought was possible.

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