I'm drowning in debt. What should I do??

Question

I have $110,000 in student loan debt, $11,000 in credit card debt, a car payment, rent, plus everyday expenses. I can't seem to keep my head above water. I have a full time job that pays 38K/year and a part time job at night. Yet, I am still falling short every month. I can't seem to get ahead. What should I do?

Answer 1

Try your best to get rid of the car (downgrade to something that doesn't have a car payment). There are debt consolidation firms that can help you consolidate your loan and credit card debt, but it will impact your credit. If your credit score has suffered already, then you may need to turn to one of these firms anyway. Try to get out of your rental, and see if a friend or relative can take you in for awhile. If they can, offer them half of what you were paying for rent for letting you live with them. Good luck.

Answer 2

First, call the CC companies and tell them you are afraid you will default if they don't help you. They may very likely lower the interest rate for a period of time so that you can make payments that actually lower the debt. Live poor, no pizza, no eating out, get rid of all unnecessary monthly expenses, internet companies (other than high speed connection, you don't need MSN or anyone else to connect), eat cereal for dinner, brown bag lunch, the whole works. See if there is any type of deferment on the student loan. One key is to deal with all of this rather than avoiding it. One thing young people just have to learn the hard way is that you buy things when you can afford them, not just because you have the credit line on a credit card. Hang in there, most people have to deal with this at some point and realize it's a learning experience that will help you greatly when you are older (I'm assuming you are young, lol).

Answer 3

I found it hard during College as well to just stay ahead. Since graduating have started using a budgeting program to see where I'm putting all my money and it helps me to stay out of the red.
The program I use is an online one CalendarBudget.com
created by my husband and I.
There are some good things in the blog there as well to tell you what is good debt and what is bad debt. Of course what you need is not that.... but helps in future expenses.
I had a few student loans (government broke it down that way)... and when it came time to pay it... i tried to pay more than the min on the one with the highest intrest rate.
Use the budgeting program to tell you more clearly where you are putting all your money and see where there are things you could cut back on .... like not going to movies as much or such things
Other thing you can do... of course try one, all, or none....
- get a smaller place to rent (less rent), sell car and use transit, consolidate the loans if it makes sense.
- reduce expenses to be able to pay more in high interest debt
- call credit card company and ask for interest rate lowered

Answer 4

110k in Student Loan? and a 38k job + part-time job? This can't be real. Sounds like some kind of problem-solving question for a Financial Planner. However, if this is the situation you're in, then you have to either save up or borrow from relatives, friends, and family.

Anyways, you're giving us very little detail into your everyday expenses and amounts, so it's very difficult to pinpoint you the best way solution. Rent and Car payments very likely eat up a big chunk of your paycheck, so if you're going to cut expenses, start there.

Answer 5

110K in student loan debt to make 38K per year. Are you under-employed? With that much student loan debt I would think you would be a doctor or a lawyer making a lot more than 38K per year.

Anyway, get a roommate. Talk to your credit card companies about lowering your rates, talk to the bank about refinancing your car. Maybe you should move back in with your parents for a while. If all else fails consult a BK attorney. He will be able to give you more options. Remember though that government guaranteed student loans are not dischargeable through BK.

Good Luck

Answer 6

Can you move back home for awhile? What kind of money are you making on your part time night job? Get a server job in a decent restaurant/club where you can make upwards of $200/night in tips on the weekends - not far - don't spend it all on travel gas and take up too much time. Be sure to save yourself at least one weekend night for socializing. You want to pay off your debt but you need a life, too!

Claim 1 - yourself - with your employer, rather than "zero" so you have less taxes taken out so you have more to work with - you don't need to hold it over until the end of the year for a refund.

Answer 7

you sould contact the bank you have the student loan with and see if you could get a defurment for a few years? Also i would start by stop eating out and going out etc. Buy exactly what you need to eat in order to survive the next 2 weeks, dont buy food at work or at lunch pack one. Another thing you will have to do is eventually pay off the cc debt. You would start with figuring out what you are paying per month on them? There is a min payment and a principal and interest payment. Now the smartest thing here to do is figure out what this principal and interest payment is and buckle down on your expenses like i mentioned above i.e. going out- dining out etc. and by doing this you should be able to afford to make that principal and interest payment and if you are doing this , then you may be able to make two payments in one month! whichwould result in you paying it off in a # of months. dont ditch the car its not worth the impact in your credit history, im telling you callthe student loan people and work on paying that cc down and you will be able to quit that 2nd job hope this helps !

chad

Answer 8

It is important that you take steps to get your debt under control before you end up in serious financial trouble.

Find a Way to Get Better Rates

One way that can help you get rid of the credit card debt that you are in is to find a way that you can get better rates on your credit cards. You can do this by trying to find a credit card that has lower rates than your current cards, and then make transfers over to the card with the lower interest rate.

Another way you may be able to get better rates is to try to negotiate with the company or have a credit counselor negotiate with the company to get you better rates on your card. While you may not realize it, having a lower rate can actually save you hundreds of dollars and can help you get out of credit card debt much faster.

Eliminate Debts One By One

If you are wondering how to eliminate credit card debt, another way that can be a great help is to start working methodically to eliminate your debts one by one. You can choose either to pay extra on your card with the lowest amount of debt or you may want to pay more on the card with the highest interest rate, but whichever way you choose will be a great way to help you get out of debt much faster. Read more about it at: http://www.credit-card-gallery.com/credit_card_debt_consoladation.html

Answer 9

$17,000.. £8500. this may be a bad debt, yet you are able to probable sparkling it interior of approximately 3 years. think of intently in the past you purchase something; in case you do no longer want it, do no longer purchase it; in case you do want it, then make certain you are able to no longer get a extra effectual deal someplace else. are not getting under pressure, credit enjoying cards are a significant soreness so attempt to get returned into the black which includes your economic business enterprise (or try yet another - they are all competing for business business enterprise) and get a private loan. the worry with credit enjoying cards is which you will possibly be paying off the interest continuously without making a dent interior the unique debt. in case you relatively can not do away with the enjoying cards, then you definately've little selection yet to stay undesirable and positioned all your money into paying them off (and that i comprehend that's extra handy to assert than to do).

Answer 10

Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.