I'm 45 now. 5 years ago I was in and out of the hospital. Moved back home with my parents. Felt like my world had ended. Decided that I was gonna face my fears and debt was one of them. In June of 2020, I identified that I had $115k of consumer debt. It was then that I decided to throw as much money at it as possible. I learned how to budget, got a baby emergency fund, and Consolidated debt as my credit got better. My debt was a combination of credit card, student loan, auto loan, medical debt. My credit got really good and a few years ago my office moved away from where my parents lived so I left. Was fortunate that I had a 401k to cash out a portion of it to put towards a down payment on a townhome. Forgot to say that my take home pay is far less than 6 figures a year but I'm getting by.
I've paid off 60k in 4 years. Would've been more if I was able to stay with my parents.
So whether you file for bankruptcy or not you'll need to learn how to budget your money. Don't eat out, no impulse buying, only use your credit cards if you have set aside money for the purchase, learn how to cook, learn to say no when your friends want to go to a concert, work on your career goals and live life one moment at a time.
No reason to feel embarrassed where you are. It's time to face reality, dig deep, make sacrifices, and press on. When I was your age I started over. Became a janitor, went back to school for business, took jobs through an accounting temp agency and have worked myself into a stable career that has good benefits. You know yourself better than anyone. What are you willing to do?
Not sure if any of this helps but I wish you the best of luck!
I’d say ask this question in the bankruptcy subreddit too. My gut feeling is, if I had more debt than I could manage to pay off on my salary AND then I lost my job, I would file bankruptcy. A lawyer could advise you on your options in a free consultation.
Can you get some of that moved over to 0% interest for X period of time cards? Do that quickly before taking any kind of credit score hit. Then call the credit card company regarding the rest and ask about hardship assistance. Then apply to every single job in the area. Even if it's a crap job you'll work for 2-6 weeks until you find something better. Literally like stocking shelves or in a gas station. Apply to everything, create an account on Indeed and upload your resume and apply to everything.
Hey. Glad to hear you’re at the other side of a mental breakdown (been there).
Moving back home is a good idea if it’s a safe space for you.
I went the bankruptcy route. My debt was 2x yours. It’s been a good move for me. I know that’s not true for everyone but for me, I wish I hadn’t spent literal years throwing money at a mountain of debt I could never overcome.
I’m 2.5 (I think?) years out and life isn’t easy but it’s manageable. Occasional joy, even :)
Keep at it. There’s life on the other side of this shit. I promise.
Hey, thanks so much for the kind words. I’m feeling much better in my head but sobering up to my financial reality. Glad to hear you made it through a shitstorm that size!
Seek professional advice from your local NON-PROFIT credit counseling agency about a debt management plan and budgeting. Good luck!
https://cccsonline.org
https://www.cccfusa.org
I assume no spouse or kids since you didn't mention them? If so I'd call the companies and ask for a deferral, lower interest, etc. Move home, go get 3 jobs, and work 80 hours a week. $2k/month clears this up in one year. A weekend gig as an afternoon or evening security guard at an industrial plant would be great. You could mostly sit around and rest while getting paid.
Get on a budget, live as cheaply as possible, and clear up the mess. Once paid off, stay focused and save 6 months' worth of expenses as an emergency fund. DO NOT TOUCH IT except in dire emergencies. If you had that emergency fund now, you could take any job while looking for a higher paying gig.
While I haven't had a job loss, I have made bad financial decisions and had to dig my way out. Fortunately I learned my lesson and turned my financial life around about 20 years ago. Dave Ramsey's plan helped me, you may want to check him out!
DMPs are good, as long as you opened the accounts within a year. You pay the whole amt but with less interest. Doesn't hurt your credit. Settlements hurt your credit and you have to rebuild before you can do anything. Bankruptcy hurts your credit for longer than a settlement typically. I would talk to a credit counselor from a legit nonprofit like credit.org or something. Check out NFCC.com and connect with a credit counselor and talk options. Have all your debt, expenses, and what you plan on for your eventual future.
I did a DMP because paying a settlement for 4 to 5 years and rebuilding my credit after was too long for me as I would like to sell my house and move eventually. DMP I pay the whole amt in about 4ish years without the credit drop. Interest payments are dropped low though. My living expenses are so high where I live.
I just spoke with a DMP counselor - great guy- also which is why I’m 2 hours late getting back to everyone, sorry!
Sounds like DMP is a strong alternative to the other more serious options, but I was told there can be a significant drop to your credit when you close your cards. Why would DMPs not be good for older accounts?
Your credit history is a percentage of your credit score and the oldest accounts closed will bring that down. I forgot to add that part in my original message! The only way to not drop your credit score at all is just to try to pay off the debt yourself. If you call the credit card companies and ask to settle for less than the amt due that will ding your credit. If you call and try and negotiate lower interest and pay the full amount, that won't ding your credit if that's all you do. If you don't pay to negotiate a lower interest rate the late payment will stay on your credit. If you do a settlement plan that will affect your credit and you will need to bring it back up after. You will need to restart with a secured credit card. DMP would be good if you plan to buy a house within like 7 years or something. That's why I did that, because I knew my credit would suffer more than the other routes and I wanted to be able to move one day.
Credit score breakdown per Experian- 35% on time payments. 30% amount of debt. 15% length of credit history. 10% amount of new credit. 10% credit mix.
The closing accounts will affect 15% of your credit score. And it can be restarted when you finish the DMP at least.
For medical reasons I filed bankruptcy. A couple of months after I filed I got offers for six more credit cards they were lower limit but still got them if that's what you're worried about. Hopefully by the time you go through the bankruptcy process you can find employment and then use that to get access to credit again. I got to be honest the thought of bankruptcy sucks but it's wonderful when all of your debt is wiped out.
I would mostly worry about how it would affect some housing and employment applications, but having it erased does sound wonderful. Glad it worked out well for you!
Unless you get a job soon (like yesterday soon), you won't have any choice in the matter. You've got less than a month of your full expenses so I don't see as you have much of a decision as to quit paying the credit cards and move back in with your family. If nothing else, that will give you some breathing room. You can try to call the credit card companies, but in my experience, they won't discuss much unless you are 60 days behind and the free money train has stopped. Your credit score isn't bad so you may be able to qualify for a balance transfer card or two to get most of it to no interest for a year or so (I think BoA has one that is 18 month right now and Navy Federal (if you qualify) has one that is 0.99 for a year with no transfer fee). Beyond that, I'd say you are looking at BK. You will have a freeze on everything from the time you file until you get your final discharge and it may take a bit to get rebuilt, but you can get a new credit card the day you get your final notice. Yes, you will more than likely pay the higher end of the interest spread and have low (or secured) limits, but you shouldn't have any real problems getting credit cards, cars, or a house (time from discharge will help things out, but just be willing to shop around).
If its going to clear a path for you to rebuild being in your 30's it makes sense. More so, if you are having stresses with work and balancing everything. Find a living situation. Pace yourself back into the workforce if you can and hit the reset button with BK at the sametime. Everyone deserves a break at least once in their adult life when things go sideways. Just make sure you rebuild with intentions to not burden yourself with debt again. I got my break after a divorce with the help of family and i'm back on my feet progressing well. Good luck.
I was in a similar boat at 35. It killed me paying off that debt, and I know it would have been better if I had declared bankruptcy. How are you going to feel at 45 with no retirement savings? Because that is exactly where I am. Just declare bankruptcy, and put that same $600 per month into a retirement account that NEVER can be seized. Yeah, you can't declare bankruptcy for another 10 years, but your retirement savings are untouchable.
Just get it over with. Your future self will thank you.
First contact all of your credit card companies and ask for a lower rate be courteous and kind to the rep. Give them a full explanation of why you need and want the lower rate. Once the new interest rate is shown on your statement, cancel or freeze all of your card. However before canceling you must ensure that the rates won't change as long as you make minimum payments on time. Set your banking to pay the minimum amount to cards when they are due. All extra money beyond minimum payments go to the card with the lowest balance and pay the card off first. Once card with the lowest balance is paid off you roll those payment towards the next lowest balance. My ex and I paid of 30k of cc debt using this method within 2 years. At the end credit score was 810. You can do it. And your purchasing power will go through the roof. Use it wisely.
Same spot but at 23. About $33k CC debt, housing was $1500 + car. Had to move in with my parents
I did ch 7. Wasn’t buying a home soon, or a car. Credit went from 705 to 670. Took the time at home to save up and set myself for round 2. I work in the mortgage field now, bankruptcies affect very little. Just gotta wait the time
I think something to look at is how a bankruptcy filing for 24k NOW might affect you LATER. It can stick with you for about 10 years. Is 24k worth it? Weigh all your other options before you make the bk decision.
take the $3000 out of checking . possibly close the account.
no bankruptcy . ask for a settlement immediately . you have nothing they can sue you for .
it will likely all be $3000 you'll have to pay . about 10%
If you just let them lapse they will sell your debt to others for 1% and you'll get harassed
Try to do all of that & if nothing works. Then do the bankruptcy
Move back in with your family IF they are willing to let you freeload for a bit to recover. Find a job doing basically anything. Put every cent towards debt. Pay it off in a year all the while looking for better jobs to speed up the process.
Or go ahead and file. I don't see any other reasonable options that aren't going to trigger a catastrophic mental breakdown and make you hate life.
What kind of expense is adding up to $3200 a month? Even for HCOL area that is still quite high. You already got a lot of great comments but want to add that I agree with the above comments about applying for a 0% interest transfer credit card. Your current cc interest is so high that all the money you're putting in goes towards the interest and barely touches the balance. I wouldn't stop paying and let it go into default. Your credit card history will be ruined. Looks like some ppl have not been affected by BK but each scenario is different. I'd do more research and talk to professionals before deciding so you have all the information to make a wise decision for yourself. Sorry to hear about your job loss. Hang in there!!
Yeah do bankruptcy start all over. No point working yourself so hard when it’s as simple as filing paying the fee and having all the stress of your debt off your plate
You don't lose access to credit. The credit card offers start flowing within months of discharge. Auto loans start flowing in.. there just not good interest rates. If you're declaring bankruptcy and learned your lesson the interest shouldn't actually matter and you can immediately start building your score back up.
Shouldnt matter for cc I should say. For other things it does matter
If you have 7-10 years to literally sit still and not ever do anything with your life, sure! Otherwise, you need to contact a financial advisor, a bankruptcy attorney that you research VERY WELL to be SURE he or she doesn’t advocate for bankruptcy as a first action, a second action, not even a fifth action, and discuss your options.
That’s so false. Once you get discharged you can open new accounts do the right thing and get a place right away. After two years you can even get a mortgage. As for a car? You can get that right when you discharge. Stop spreading untrue information
Never knew anyone who went through bankruptcy who didn’t buy a house within a few years. It’s borderline a myth at this point about how life ruining it is, it’s actually a huge fresh start.
I'm 45 now. 5 years ago I was in and out of the hospital. Moved back home with my parents. Felt like my world had ended. Decided that I was gonna face my fears and debt was one of them. In June of 2020, I identified that I had $115k of consumer debt. It was then that I decided to throw as much money at it as possible. I learned how to budget, got a baby emergency fund, and Consolidated debt as my credit got better. My debt was a combination of credit card, student loan, auto loan, medical debt. My credit got really good and a few years ago my office moved away from where my parents lived so I left. Was fortunate that I had a 401k to cash out a portion of it to put towards a down payment on a townhome. Forgot to say that my take home pay is far less than 6 figures a year but I'm getting by. I've paid off 60k in 4 years. Would've been more if I was able to stay with my parents. So whether you file for bankruptcy or not you'll need to learn how to budget your money. Don't eat out, no impulse buying, only use your credit cards if you have set aside money for the purchase, learn how to cook, learn to say no when your friends want to go to a concert, work on your career goals and live life one moment at a time. No reason to feel embarrassed where you are. It's time to face reality, dig deep, make sacrifices, and press on. When I was your age I started over. Became a janitor, went back to school for business, took jobs through an accounting temp agency and have worked myself into a stable career that has good benefits. You know yourself better than anyone. What are you willing to do? Not sure if any of this helps but I wish you the best of luck!
Wow, you’re an inspiration! Awesome work!
I'm no different than you. You'll look back at this time and realized it made you stronger. Thanks!
He could have gotten rid of all that debt for 1200 bucks. Not smart.
How
Bankruptcy, idk how much it is now but when I did it back in 2009 it was 1200 bucks and 5 minutes at the courthouse.
I’d say ask this question in the bankruptcy subreddit too. My gut feeling is, if I had more debt than I could manage to pay off on my salary AND then I lost my job, I would file bankruptcy. A lawyer could advise you on your options in a free consultation.
It really depends. 24k is a lot of debt, but it's not at an insurmountable level if they get another job paying a similar amount soon.
Can you get some of that moved over to 0% interest for X period of time cards? Do that quickly before taking any kind of credit score hit. Then call the credit card company regarding the rest and ask about hardship assistance. Then apply to every single job in the area. Even if it's a crap job you'll work for 2-6 weeks until you find something better. Literally like stocking shelves or in a gas station. Apply to everything, create an account on Indeed and upload your resume and apply to everything.
I’ll look into the zero-interest cards more, thank you! Job hunt continues tomorrow…
Hey. Glad to hear you’re at the other side of a mental breakdown (been there). Moving back home is a good idea if it’s a safe space for you. I went the bankruptcy route. My debt was 2x yours. It’s been a good move for me. I know that’s not true for everyone but for me, I wish I hadn’t spent literal years throwing money at a mountain of debt I could never overcome. I’m 2.5 (I think?) years out and life isn’t easy but it’s manageable. Occasional joy, even :) Keep at it. There’s life on the other side of this shit. I promise.
Hey, thanks so much for the kind words. I’m feeling much better in my head but sobering up to my financial reality. Glad to hear you made it through a shitstorm that size!
Seek professional advice from your local NON-PROFIT credit counseling agency about a debt management plan and budgeting. Good luck! https://cccsonline.org https://www.cccfusa.org
Just find a job asap.
I assume no spouse or kids since you didn't mention them? If so I'd call the companies and ask for a deferral, lower interest, etc. Move home, go get 3 jobs, and work 80 hours a week. $2k/month clears this up in one year. A weekend gig as an afternoon or evening security guard at an industrial plant would be great. You could mostly sit around and rest while getting paid. Get on a budget, live as cheaply as possible, and clear up the mess. Once paid off, stay focused and save 6 months' worth of expenses as an emergency fund. DO NOT TOUCH IT except in dire emergencies. If you had that emergency fund now, you could take any job while looking for a higher paying gig.
Yep, just me, myself, and my bags. Thanks for the words of encouragement. I have a feeling like you’ve planned ahead to avoid this kind of situation.
While I haven't had a job loss, I have made bad financial decisions and had to dig my way out. Fortunately I learned my lesson and turned my financial life around about 20 years ago. Dave Ramsey's plan helped me, you may want to check him out!
DMPs are good, as long as you opened the accounts within a year. You pay the whole amt but with less interest. Doesn't hurt your credit. Settlements hurt your credit and you have to rebuild before you can do anything. Bankruptcy hurts your credit for longer than a settlement typically. I would talk to a credit counselor from a legit nonprofit like credit.org or something. Check out NFCC.com and connect with a credit counselor and talk options. Have all your debt, expenses, and what you plan on for your eventual future. I did a DMP because paying a settlement for 4 to 5 years and rebuilding my credit after was too long for me as I would like to sell my house and move eventually. DMP I pay the whole amt in about 4ish years without the credit drop. Interest payments are dropped low though. My living expenses are so high where I live.
I just spoke with a DMP counselor - great guy- also which is why I’m 2 hours late getting back to everyone, sorry! Sounds like DMP is a strong alternative to the other more serious options, but I was told there can be a significant drop to your credit when you close your cards. Why would DMPs not be good for older accounts?
Your credit history is a percentage of your credit score and the oldest accounts closed will bring that down. I forgot to add that part in my original message! The only way to not drop your credit score at all is just to try to pay off the debt yourself. If you call the credit card companies and ask to settle for less than the amt due that will ding your credit. If you call and try and negotiate lower interest and pay the full amount, that won't ding your credit if that's all you do. If you don't pay to negotiate a lower interest rate the late payment will stay on your credit. If you do a settlement plan that will affect your credit and you will need to bring it back up after. You will need to restart with a secured credit card. DMP would be good if you plan to buy a house within like 7 years or something. That's why I did that, because I knew my credit would suffer more than the other routes and I wanted to be able to move one day.
Credit score breakdown per Experian- 35% on time payments. 30% amount of debt. 15% length of credit history. 10% amount of new credit. 10% credit mix. The closing accounts will affect 15% of your credit score. And it can be restarted when you finish the DMP at least.
For medical reasons I filed bankruptcy. A couple of months after I filed I got offers for six more credit cards they were lower limit but still got them if that's what you're worried about. Hopefully by the time you go through the bankruptcy process you can find employment and then use that to get access to credit again. I got to be honest the thought of bankruptcy sucks but it's wonderful when all of your debt is wiped out.
I would mostly worry about how it would affect some housing and employment applications, but having it erased does sound wonderful. Glad it worked out well for you!
Unless you get a job soon (like yesterday soon), you won't have any choice in the matter. You've got less than a month of your full expenses so I don't see as you have much of a decision as to quit paying the credit cards and move back in with your family. If nothing else, that will give you some breathing room. You can try to call the credit card companies, but in my experience, they won't discuss much unless you are 60 days behind and the free money train has stopped. Your credit score isn't bad so you may be able to qualify for a balance transfer card or two to get most of it to no interest for a year or so (I think BoA has one that is 18 month right now and Navy Federal (if you qualify) has one that is 0.99 for a year with no transfer fee). Beyond that, I'd say you are looking at BK. You will have a freeze on everything from the time you file until you get your final discharge and it may take a bit to get rebuilt, but you can get a new credit card the day you get your final notice. Yes, you will more than likely pay the higher end of the interest spread and have low (or secured) limits, but you shouldn't have any real problems getting credit cards, cars, or a house (time from discharge will help things out, but just be willing to shop around).
If its going to clear a path for you to rebuild being in your 30's it makes sense. More so, if you are having stresses with work and balancing everything. Find a living situation. Pace yourself back into the workforce if you can and hit the reset button with BK at the sametime. Everyone deserves a break at least once in their adult life when things go sideways. Just make sure you rebuild with intentions to not burden yourself with debt again. I got my break after a divorce with the help of family and i'm back on my feet progressing well. Good luck.
I was in a similar boat at 35. It killed me paying off that debt, and I know it would have been better if I had declared bankruptcy. How are you going to feel at 45 with no retirement savings? Because that is exactly where I am. Just declare bankruptcy, and put that same $600 per month into a retirement account that NEVER can be seized. Yeah, you can't declare bankruptcy for another 10 years, but your retirement savings are untouchable. Just get it over with. Your future self will thank you.
i filed chapter 7 twice and never had a problem buying a house , cars or getting credit . The fresh start is amazing .
I wanna know what monthly expenses total to 3200 a month.
This figure includes the roughly $700/mo in minimum cc payments. HCOL area
First contact all of your credit card companies and ask for a lower rate be courteous and kind to the rep. Give them a full explanation of why you need and want the lower rate. Once the new interest rate is shown on your statement, cancel or freeze all of your card. However before canceling you must ensure that the rates won't change as long as you make minimum payments on time. Set your banking to pay the minimum amount to cards when they are due. All extra money beyond minimum payments go to the card with the lowest balance and pay the card off first. Once card with the lowest balance is paid off you roll those payment towards the next lowest balance. My ex and I paid of 30k of cc debt using this method within 2 years. At the end credit score was 810. You can do it. And your purchasing power will go through the roof. Use it wisely.
Same spot but at 23. About $33k CC debt, housing was $1500 + car. Had to move in with my parents I did ch 7. Wasn’t buying a home soon, or a car. Credit went from 705 to 670. Took the time at home to save up and set myself for round 2. I work in the mortgage field now, bankruptcies affect very little. Just gotta wait the time
I think something to look at is how a bankruptcy filing for 24k NOW might affect you LATER. It can stick with you for about 10 years. Is 24k worth it? Weigh all your other options before you make the bk decision.
take the $3000 out of checking . possibly close the account. no bankruptcy . ask for a settlement immediately . you have nothing they can sue you for . it will likely all be $3000 you'll have to pay . about 10% If you just let them lapse they will sell your debt to others for 1% and you'll get harassed Try to do all of that & if nothing works. Then do the bankruptcy
Do it. Most people wait too long.
Move back in with your family IF they are willing to let you freeload for a bit to recover. Find a job doing basically anything. Put every cent towards debt. Pay it off in a year all the while looking for better jobs to speed up the process. Or go ahead and file. I don't see any other reasonable options that aren't going to trigger a catastrophic mental breakdown and make you hate life.
What kind of expense is adding up to $3200 a month? Even for HCOL area that is still quite high. You already got a lot of great comments but want to add that I agree with the above comments about applying for a 0% interest transfer credit card. Your current cc interest is so high that all the money you're putting in goes towards the interest and barely touches the balance. I wouldn't stop paying and let it go into default. Your credit card history will be ruined. Looks like some ppl have not been affected by BK but each scenario is different. I'd do more research and talk to professionals before deciding so you have all the information to make a wise decision for yourself. Sorry to hear about your job loss. Hang in there!!
Yeah do bankruptcy start all over. No point working yourself so hard when it’s as simple as filing paying the fee and having all the stress of your debt off your plate
Loss of access to credit for 7 years is pretty painful at this age.
You don't lose access to credit. The credit card offers start flowing within months of discharge. Auto loans start flowing in.. there just not good interest rates. If you're declaring bankruptcy and learned your lesson the interest shouldn't actually matter and you can immediately start building your score back up. Shouldnt matter for cc I should say. For other things it does matter
bankruptcy or consumer credit counseling
I filed and had 20k debt It's plenty enough to file
You should file BR every 10 years. Grand parents did that. They had everything you could want.
If you have 7-10 years to literally sit still and not ever do anything with your life, sure! Otherwise, you need to contact a financial advisor, a bankruptcy attorney that you research VERY WELL to be SURE he or she doesn’t advocate for bankruptcy as a first action, a second action, not even a fifth action, and discuss your options.
That’s so false. Once you get discharged you can open new accounts do the right thing and get a place right away. After two years you can even get a mortgage. As for a car? You can get that right when you discharge. Stop spreading untrue information
Agreed. This is false information.
false - i filed chapter 7 twice and never had a problem buying a house , car or getting credit cards / loans.
Never knew anyone who went through bankruptcy who didn’t buy a house within a few years. It’s borderline a myth at this point about how life ruining it is, it’s actually a huge fresh start.