Submitted by nah_just_ocd t3_z815dy in personalfinance
inoen0thing t1_iyblkkf wrote
Reply to comment by TywinShitsGold in Help! Drowning in debt. by nah_just_ocd
This is not the answer. OP is spending somewhere around 62% of income to pay interest and housing alone. This is no longer a budging situation. If OP freed up 20% of her income (i very much doubt this is possible) OP would have to spend about 40k in 12 months to clear out $1400 a month in principal on these cards.
This would put OP paying this back in 4-7 years depending on ongoing usage and bring OP to 82% of income on housing (just rent) and cc payments. This is not possible, it is not healthy and it is not budgeting, OP needs professional help from someone who specializes in bankruptcy.
Grenachejw t1_iybs6qo wrote
Maybe but this is the first step, I used to live paycheck to paycheck until I created a budget, started exporting all transactions in to excel, learned how to create drop downs using data validation to categorize each line item, then sumif to total every group on the right, rent, groceries etc. OP biggest help is to keep rent at or below 33% of take home. So that's first step, second step op I would try to consolidate that credit card debt to a new card(s) at 0% interest for a year. Yes it will cost 3% or whatever to do so. If your credit isn't good enough for that I would call the cc companies and just say you're thinking about filing for bankruptcy, just to see if they will work with you and maybe only charge you principal, or lower interest rate. Goal is to try to get away from the 20-30% interest they're charging you. I would also pick up a 2nd job to chip away further. I think in 1 to 2 years you should have a major chunk of that paid off if you stay focused
inoen0thing t1_iybuxz2 wrote
Having to spend 82% of your income on debt and a single expense for 4-7 years to get out of debt has no first step that is not bankruptcy or a large inheritance. If we get conservative it is 72% over 8-14 years…. I understand paycheck to paycheck. The OP is not doing this… they are doing this then spending 90k above income.
It is important to remember the OP is sending at the very least 26% of income on just the CC interest. So putting rent at your suggestion means they have just rent and just interest at 60% of income. Add a car, insurance, cell phone, utilities and food in the area they are in and there is nothing left. It is not possible to do this on the OP’s income without changing their life entirely. They will be in bankruptcy to get out of this… they need to just do it now before they further their damage.
Sometimes the answer is not hope, spreadsheets and organization. In this case it is not and the advice of reducing rent is not sustainable. They need professional help or it will get worse. For them to do this budget overnight they would need to be very good at budgeting money to break even every check and not pay debt off. They need professional help.
Grenachejw t1_iybxvmg wrote
I think you missed the step of getting the interest rate reduced. OP makes over $80k, takes home $73k. Reduces rent to $24k or less a year. Living expenses another $20k. That leaves around $30k left to put towards hopefully only principal after negotiating. Side Hussle Uber gig, eBay side business, maybe $1k per month additional. Share a room somewhere save another $10k a year. As I said if op is motivated to avoid bankruptcy they've got a potential $50k to throw towards a not yet negotiated debt, which could be less depending on the cc companies willingness to work with them
[deleted] t1_iycyhxx wrote
[removed]
inoen0thing t1_iybvs5i wrote
Also PT jobs… 1 year they would need roughly 63k to kill 1/2 the debt. 63k at PT pay = $70-$80 an hour at 20 a week (probably still not enough with taxes). Or lets give sleep up and say 2 PT jobs… now working 80 hours a week and driving to three jobs… they need two PT jobs that pay roughly triple their full time job in hourly wages. 🤷🏼♂️ there is no way man. I get the optimist role but…. It just isn’t there.
I don’t mean to be rude but you should not be providing financial advice online. The math doesn’t work out in any of your suggestions with basic survival numbers.
I would guess the OP has a car that is a little pricey, an apartment that is over what he should spend on. My numbers are done with far less than that and it has the OP barely able to eat without paying debt down.
TywinShitsGold t1_iycjowm wrote
There is no rent payment listed in the OP
inoen0thing t1_iycwulw wrote
$2000 pm in the bay area is a pipe dream and that is what i used ;) a little common sense can go a long way. And if I’m wrong and it is under 82% of their budget on rent cc debt and utilities would be the worst inaccuracy i would have here. Someone spending 90k in cc debt over their income likely made other bad financial choices and cares about possessions, likely their apartment is above average as well so when i say the above understand…. They are worse off than sharing.
If i am wrong in the other direction they are spending $2800 a month on rent and so fucked they won’t even share it. Either situation = bankruptcy. OP has no other choice no matter what you say they did not say. When 1/3 of you income is gone without a bill or obligation or balance in the world being paid… you are in a lot of trouble no way around it.
Ill_Psychology_7966 t1_iycums3 wrote
This was the answer I was looking for. OP needs to find a consumer bankruptcy lawyer. It’s the only realistic option.
[deleted] t1_iyby6uo wrote
How did you know it was a she?
inoen0thing t1_iyczql2 wrote
Is it a she? I read a comment and assumed. I went back and had changed she to OP because i realized the same thing, i don’t know where i picked up she.
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