What would you do in this? Debt, Rent, Credit Card, etc...?

Question

What would you do? I am 21 years old. I have a car debt of $16,000, credit card debt of $5,000, rent, car maint., bills, etc. I do not know how to get out. I pay bills and still cant get ahead. I feel like this is it for me. My credit score is in the low 300. What do I do? How do I get out? What would you do? I tried selling my car but they only want to give $12,000 for it when I know it is worth more than that... So how do I get out of debt?

Answer 1

consolidate all the loans into one, you will pay a lot less in repayments and usually interest as well, and if you do this, keep credit card but dont use it unless you really need to

Answer 2

OK, so you have $21,000 total debt:
($16,000 car +$5,000 credit)


There are three things you should do...

1. Sell the car!!!!!
2. Cut up the credit card and never ever use one again!!!!
3. Get on a written budget (if you're not on one already)

explanation:

If you get $12,000 for the car, your total debt would go from $21,000 down to $9,000 in an instant.
($4,000 car +$5,000 credit card)

If you had never gotten a credit card in the first place, you would never have never gotten yourself into credit card debt. If you never use a credit card again, you will never have credit card debt ever again! By the way, don't worry about the FICO score. FICO scores only matter to those who actually want to go into debt. The only reason to build credit at all is to get a mortgage on a house. You don't have to use credit cards to do that. If you pay your landlord early or on time for 2 years you qualify.

If you use a written budget, you see and you are in control of where your money goes. Also, by using a budget, you know how long it will take you to become debt-free and truly be in control of where your money gets spent.

Answer 3

Sell the car to an individual and buy a "garage sale" car. That should cut at least $10,000 off your debt immediately. How much you THINK it is worth is not an issue. How much someone will PAY is how much it is worth. WRITE out a budget for this month. Show what you will do with EVERY penny. Once the budget is done, treat it like you will be sued for $100,000 if you spend a penny that is not on the paper. Get a part time job for extra income. I have been delivering pizza for 3 weeks. I have already collected $260 in tips, $140 in mileage allowance, and I get my first paycheck tomorrow. Even after gas, that give me over $500/month to pay off debt.

Answer 4

I have to disagree with some of the answers here - do NOT sell the car if you can't get more than the total of the car loan for it. I'm assuming you absolutely need the car, of course, to get to work. Try very hard to find a place that will buy it for what it's worth! If you do manage to sell it, find a junker to drive for a while, just enough of a car to get you back and forth to work.

Try calling up your credit card company and negotiating your interest rate down. Whether or not you're able to do that, cut up your credit card. Once you've paid it off, call up your credit card company and ask them to reissue your card. You're going to need to start using that card responsibly in order to rebuild your credit, so don't cancel it! With such a low credit score, it would be hard to get a new card once you're ready.

Do some Google searches for "frugality" and "simple living." You need to learn how to live on very little money so that you can put most of your money towards your debt. Also, go to your library and start checking out some personal finance books. I highly suggest you check out Suze Orman's "Money Book for the Young, Fabulous, and Broke." It's a great tool for people our age.

You might want to look into some free budgeting software. I use PearBudget - it's free and really easy to use, I think it might help you. I've put the link for PearBudget as well as some other personal finance stuff in the "Sources" section for you.

Most of all, try not to get discouraged. This is something you can beat - I know you can do it, because I have.

Answer 5

I guarantee you, that you are not the only one in your situation.

1. If Possible get a better paying job
2. Search around for a better insurance price on your vehicle.
3. I bet you have cut back on a bunch of expenses
4. Do not take loans out, from banks, credit unions, friends or family. You will just pour yourself further into the hole. Unless you are trying to consolodate, but I dont think it would do much for the amount you owe.
5. Re-evaluate your life and see what you can cut back on, and what you can do to save money. (Cutting back on food does not help any situation if you are mal nurished and getting sick) But cutting back on Chunky Monkey Ice Cream does help. (I hope you understand what I mean here in no. 5)

The only other thing I can think of is you are over spending. Or you picked a beautiful apartment and you thought it was in your budget.

If you go bankrupt on 20,000 dollars, I'm am going to call you silly.

Answer 6

Try selling your car as a private sale not to a car dealer. Cut back on everything but necessities. Get a better job or a second job.

Answer 7

can you get a better job???

can you not get a personal loan to clear some of your debts??

do a income and expenditure and see whats left

dont sell the ar as you will still need to cover the $4000 deficit
and may still need a car

apply for a second job or hold a sale and sel what extra stuff you may have (garage sale)

i hope this helps

Answer 8

have you ever tried telling him how approximately paying off all the debt, to make your spouse happy, and then with the better paycheck funds, save as much as restoration up his automobile as a "reward"? then you definately might the two be happy. in my opinion, i might use a million/2 the money to pay off a million/2 the debt, and the different a million/2 to save for the youngster's college and your retirement.