Need some debt mgmt advice.

Discussion in 'Self Improvement and Being Successful' started by Chrisj0401, Sep 28, 2009.

  1. Chrisj0401

    Chrisj0401
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    -Not sure if this is the correct forum to post this topic in-

    Need some debt management advice.

    I got 1 loan I can pay off with $5100 right away or pay $9000 and something slowly with interests added on.

    Also I got 1 credit card thats in the low $3000. I got another credit card near $500, and another the same as well, and around $600 from kind of a credit card account. So $4600 in credit card debt.

    Under my name I need to pay about $10,000. I got a personal loan with my mom (not sure how much I owe right now on them - as of this posting) $7000 for my car.

    What should I do.. I've been paying everything on time for the past 3 years.. I want to get free from debt forever asap. I cannot afford the time to get a 2nd job as I'll be a new full time student plus I am a full time (40hours) worker. And I cannot get a new job because my current job is 100% perfect for low/no stress and pressure added onto outside of work. I also I'm allowed to do homework/reading or whatever during work so it would help a lot during college to have my current job than another job.

    So job switching or 2nd job is out of the question sadly..

    Right now I'm living on paycheck to paycheck barely being able to afford food. I do pay a bit more than the minimum payments as of right now.

    What should I do?

    I'm asking ya guys because ya'll are business guys. I also cant afford a professional to help me in any way... Even government agency charges services to help me, but again cant afford them.
     
  2. seanstevens

    seanstevens
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    Chris,

    Just to be clear I am not a personal debt adviser (you need a license to do this). I am a credit manager and can offer some general thoughts on the subject:

    * Personal loan from your mother: I assume she knows the full extent of your situation or you could make her aware so that payments back to her could be delayed for a short while?

    * If I have got this right, you have a loan of just over $5K and credit card debt of just under $5K?

    * The loan agreement that is pay now $5K or $9K over a longer time period: Do you have the $5K to pay this off in one go?

    * It's great that you have shared the information. The first part in dealing with personal debt is discussing it. Those people that hide away from it never get clear it fully.

    * Don't be scared to phone your credit card company (with the largest debt). Ask to speak to their credit department and if you can the credit manager. They will probably try to get you talking directly to a telephone call center, push them, to talk to a credit professional.

    * When talking to the credit professional, explain to them that you are having some problems and you have got yourself into debt. You are trying to pay the minimum balance but having problems keeping up. What you are trying to do is get them to lower the minimum rate for a few months or allow you to take a break for 1 or 2 months. If you can do this - pay off the balances on the smaller credit cards so that you have less companies to worry about paying.

    * For the sake of your credit profile, you are doing the right thing in paying back the minimum balances and not defaulting. If you are able to persuade the largest card to give you a break ask them to make sure it does not go on your record as a default. You will have to make sure you do pay them on time when payments restart. This is very important for your future credit profile in getting credit for a mortgages etc as the years role on.

    Don't panic if they say no to you, just be persistent and try again the next day. If you show them that you want to pay them back and are willing to work with them to get it all cleared, you will get results.

    This is just a start and there is a lot more. Take a read and let me know if you have any other questions.

    Sean
     
  3. Fergal

    Fergal
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    Chris, sorry to hear about your debt issues and congratulations on being upfront and posting about it. I know from personal experience, what it's like to have a lot of debt and to be worried about how to pay it back. I wish you the very best of luck with everything and I'm delighted that Sean was kind enough to take the time to advise you.

    Do you know what interest rates apply to each of the loans and credit card bills that you have? You probably want to give high priority to the debts with the highest interest rates.

    Please don't take this the wrong way, but have you thought about the decisions you have made, that have brought you to this situation? That should help you to learn from the experience and help you avoid it in the future.

    Try to view your situation as a challenge that you will resolve successfully. There may be some difficult moments in the near future but the truth is that these issues are relatively minor, in the greater scheme of life. There are very many people who have much worse problems than and who would love to swap places with you. Obviously this may not be a great consolation but it is important to put our problems into perspective.

    I wish you the very best of luck with everything and please keep us updated on your thoughts and how everything is working out for you.
     
  4. Chrisj0401

    Chrisj0401
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    My loan, at 29%... they’re pre added to the loan balance though. I was told from them that I can pay it full and avoid whatever interest left. Like now the balance is around $9000 from around $11000. I’ve already paid $2000 in interest pretty much. I’m not 100% sure if they’ll close the account once I pay them in full since I didn’t read the 200 page contract when I signed it. And what I mean by pay in full like pay them the full balance they loan me which is $5100, not including the interests.

    Yes I’ve learned a lot.. a very hard lesson. Both for getting a crappy loan and taking regretful risks I took for my business ventures. Next time I plan on saving cash for things I want and need to invest into. Since I learned this I’ve been not using credit cards/loan for nothing but Emergency use only like food/gas or other. Again only for extreme cases.

    Yea I know… I’ve never made a late or missed any payments I know I did that right. I got a nice credit score of around 700s. So at least I keep my straight arrow of paying on time I’m ok..

    I know I got two choices, but I don’t want to choose. One is push off college until I pay off my debt and work 2-3 jobs until I pay it off, or go to college and get a better paying job then pay off my debt. I’d rather go for college right away. Is that the right way?

    Well, I’m paying on time to her as I agreed, and she lets me live rent free for almost 4 yrs on the house she owns here in PA. I highly doubt she would let some payments be delayed.

    yup.

    nope…

    Well, I do pay on time, its not like I got creditors hunting me down or anything LoL.

    Well, I rarely pay the minimum balance. I normally pay a bit higher than the minimum. Like if the minimum is $15 I pay $25-$50, or when the minimum is $60 I pay $100…
     
  5. Fergal

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    That's an exorbitant interest rate. I'd contact the loan provider straight away and tell them that the rate is too high and ask if they can reduce it. If they won't reduce it you should at the very least look to see if you can get a lower cost loan and use it to pay off that one at 29%. You might also consider contacting some authorities such as the banking ombudsman or financial regulator and ask if there is anything you can regarding such a high interest rate.

    29% really is a crippling interest rate - almost $28 per week on interest alone, for a $5,000 loan. If you could find a way to reduce that rate significantly you would save yourself a lot of money every week. The money you save could be used to clear some of your other debts or the principal on this loan.
     
  6. Chrisj0401

    Chrisj0401
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    yea supposedly its normal on a consolidation loan I've been told to have such a high interest loan, also its an unsecured loan. I'll try to get it lower but I'd doubt it.
     
  7. seanstevens

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    Chris, just to let you know I have seen your second post above and I will come back to you tomorrow. Apologies, but have been too busy today.
     
  8. Chrisj0401

    Chrisj0401
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    Instead of making a new topic, I'll just convert and continue this one.

    How do I earn more cash/income with the situation I've explained on my first post in this topic? I want to clean out all my debt and move at least some of quality of life a bit. My goal right now I'd like to have in income is $32,000 annually. That's about $15/hourly rate working 40hours a week.

    As you know I can’t get a 2nd job, or a better job, just because the job I got right now is perfect with little to no stress and the benefit that I can work on my school/homework on downtime during work hours, so making my life a whole lot easier.

    Anyone with any clue on what I should do or can do to earn more cash without delaying my goals to start and finish my education? I plan on going to college for the next 4 year starting in Jan 2010.

    One other bad thing that will happen according to my mother, she's saying she is retiring in 2 years and I'll be fully responsible in paying a majority of the house bills (which I live in right now & live house bill/rent free). That is an enormous amount of pressure to complete college in 2 years, which will give me a A.S Degree in Business Administration (which is pretty much worthless from what I've researched). I need to earn about $4000 a month in order to be able to pay for the house bills and my current bills/expenses. So once I’m finished with my community college/A.S. program I’ll have to delay the rest of my education and look for a higher paying job than I got now. I got no idea what to do in this situation, seriously. I am extremely worried and panicking…

    FYI: I make an estimate of $12K-$15k of annual income... And I started to think about this much more when I heard some 18 year old girl (on a radio show as a caller) said she is living on her own with no help from anyone. She's working as a Pharmacy Tech and earned some kind of certificate that only took her 8 months. That got my blood boiling since I'm having such a hard time as a 24 yr old and living on my own but in my mother's property which she owns (but dont live in, I live alone).

    I may be considering of trying some freelance stuff or running some small business of service like offering my moderate/intermediate skills in PC troubleshooting and tech fixing to anyone like businesses or people, but only work on Desktop PCs, not anything else.
     
    #8 Chrisj0401, Oct 9, 2009
    Last edited: Oct 9, 2009
  9. Fergal

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    Hi Chris, it would probably be better if you started a new thread to discuss how you can increase your income and leave this thread to discuss your debts. Please feel free to copy some of the content from the post above, into a new thread.
     

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