My name is Angie and I am 27 yrs old, a nurse and am getting married next year to the love of my life. My to be hubby is an ex-marine and had some difficulties since his honorable discharge from service. Long story short for mulitple reasons he has been out of work for almost a year and trying to complete his college education. My fiance is about to start a new job and is still finishing his degree. Due to him being out of work it has caused quite the financial burden to me as we do live together. He would support me no questions asked if the roles were reversed. He has accrued a large amount of debt as well and his credit score is very poor. He is a wonderful person who has made some big mistakes in his irresponsible past. Now that the lessons have been learned we need to pull ourselves out of debt.
I have a good/great credit score , always have. However with supporting two people and the incidentals that have come up (car breaking down…etc) I am now starting to feel the bind of living with one income and using the credit card as a catch all. I have roughly about $41,000 (with an APR of 8.4-11.5%) in private student loans and about $15,000 (at 8.99% APR) in credit card debt. I don’t mind the student loans as much…it is good debt it paid for my degree and earning potential. I pay about $400 a month for student loans and about $180 for the credit card (minimum). I also bought my own townhouse several years ago and of course have a mortgage. Throughout all this I have been able to pay all the bills every month, maybe a few days late, but always the minimums and having to put more on the credit card for living expenses. Every month it is getting tighter and tighter to the point that I actually think I can’t pay some of the bills and I am almost at the max of my credit card and I refuse to apply for another.
I am trying to think of anything that would help us get out of debt and help me still pay the bills. On top of all this it is our dream to have a family and to buy a home. We feel irresponsible for doing either of those things with these financial woes we have and it will keep us from our real dream.
With my fiancé’s poor credit score will buying a house be possible in our future? Do they really combine our credit scores? If so I think we are doomed. Carrying the financial burden with this debt is so stressful and weighs so heavy on both of us, and we are trying to pay our wedding. There are so many layers of our finacial situation.
So should I seek debt consolidation, if so what company is a good one. There are so many out there that I don’t know which can get me the best reduction in debt and that is reputable. Please, please, please offer any advise you think will help us!
p.s. I have a personal stand point that the goverment should pay the debt of our soldiers that have come home to us. The turmoil and after math of war is very ugly and unforgiving … it comes at a VERY high price.”
Well, let me say first that I agree with you when it comes to supporting soldiers and troops. Regardless of political conviction I am a firm supporter of military members and have met nothing but fine citizens that serve. I think those people deserve a tremendous amount, but that’s not what they get.
While your situation certainly feels stressful, it is not hopeless. My major concern is that you’ve been living and making ends meet using the credit card and no matter what action we take, with that maxed out card, you are no longer able to use credit to get by.
Since your husband is due to start a new job soon I’m hoping he will be able to start and get his first check within the next 90 days. If so, then the best course of action would be to stop paying the credit card and let it go into collection. Once he starts getting paid you can catch back up on it.
The downside of this is that you will get collection calls and it will hurt your credit, but big deal. All of that can be repaired latter.
On the student loan you might want to consider the IBR, income based repayment, plan to get your student loan payment in line with your income. Hopefully you’ve got government backed loans and would be eligible for that program.
Once you see that the new salary is going to be rolling in, and soon, I think you should first consider a debt consolidation loan to pay off the card. Visit LendingClub.com and learn how people, just like me, lend money to people in all sorts of situations. In fact if you do decide to go with LendingClub, let me know how to locate your loan request by leaving me a note in the comments section of this question and I’d be happy to be one of the lenders that pools together to help you out.
The next issue is the carnage left behind with his credit. Before we jump to any conclusions we need to asses the situation. I suggest that he order a copy of his consolidated credit report with the credit score. We need to see what all three credit bureaus are saying about him and the specific action that needs to be taken to improve his credit score.
His credit might be wounded, but it can be saved and made good again. Just remember, this is going to be a process and the course of treatment is going to take some time but the prognosis is not fatal here, just a PITA.
P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.