So I’ve managed to go and get myself into about $110k debt (I didn’t throw the $30k of student loan debt into that pile since I don’t see that as bad or ‘stupid’ debt).
I make about $100,000 a year, am single and rent. How I got here… well, I’d love to claim medical problems, etc. but mine falls into the “I was in a terrible relationship and so my better half’s use of my cards chalked up $40,000 of the above and things were so bad for so long that I probably spent a good $25,000 to $30,000 over the course of 18 months living in hotels rather than be at home. The remainder is a car loan and some general overspending.
I know its absolutely bizarre but somehow it was easier for me to rack up $60k in debt to avoid having problems than just dealing with a really bad situation in a way that made sense for me instead of for her.
Long story short, she no longer has access to my credit cards and we aren’t living together, etc. But I’m at the point where when I sketch out a budget, I don’t see how I can substantively cut enough money to do anything but barely pay minimums. My job pays well but also requires so much of my time that getting another isn’t really feasible – I have to travel a lot. And with the job market what it is… well, that’s that.
I’m current on my debts right now but I don’t know for how long I can maintain that. I’ve considered contacting a card company to see if they would work with me to pay them what I owe but I’m concerned about doing that for fear of triggering some insane interest rate or a huge credit limit cut which might impact other cards.
Do I have any options here that I’m not seeing or am I just plain screwed?
Debt is debt. The reasons you found yourself here are important to identify to not repeat again and they are interesting but at the end of the day, it is just a number.
But the issues that you bring up are not that unusual at all even though the numbers in the columns are a lot bigger than most.
Essentially what you both engaged in was avoidance and self medication through spending other peoples money. The spending masked the underlying issues but as always, a day of reckoning looms.
You’ve found yourself on the edge of a precipice, with danger and pain on one side and a long fall on the other. Where you stand now is beautiful for the credit card company. You are going to limp along making the minimum payments and it will take you 30+ years to pay off that debt that way.
I am confident that there are already some warning signs that may be evident with a random screen of your credit report. Now that credit card companies are taking drastic action to close cards and reduce limits for people that appear “at risk” I’m certain your report is going to show high levels of unsecured debt with a high balance to credit ratio.
But your instincts are correct. If you call your credit card companies and ask for forgiveness, they are either going to tell you “so sad, so what” because you are current on your bills, or it will flag your account for review and there is no need to ask for that at this time.
I am confident that you have trimmed your expenses way back and you are doing what you can to make the minimum payments. So I doubt that there are any big cuts to make to take this pressure off.
You do have some options, none terrific.
- You could call your credit card companies and ask for a lower interest rate. Tell them you are getting better offers from others and you’d like to stay with them if they can lower your rates. If they say no, ask to speak to a supervisor and ask them the same thing.
- You could ask your ex-girlfriend to repay some towards her debt on your cards.
- If your credit isn’t shot, you could make a Hail Mary attempt at a balance transfer to a lower interest rate credit card. You can click here to find the latest balance transfer offers. The big problem with the balance transfer option is that more cards are charging a 3% transfer fee so on $60,000 of debt you will immediately add $1,800 to your balance due by moving the card balances.
- If you want to see if you can get your interest rates reduced by entering a debt management program, you can explore that option but it will flag your accounts if you move ahead with the debt management solution. The accounts will be closed.
- The last option would be bankruptcy to eliminate your debt and start over. You’d probably have to do a Chapter 13 payment plan bankruptcy but you should get a free bankruptcy review and discuss those options with a licensed bankruptcy attorney in your state.
Entering these uncertain economic times my biggest concern is how much money you’ve got in savings or even with all this debt you’ll be able to save. Without an emergency cash, you could be really screwed if something unexpected comes up, as it always seems to.
If you are prepared to slog your way through this debt, then use the online debt eliminator calculator to plot out the best way to do that, get out of debt in the shortest amount of time and pay the least amount of interest.
I’m always here for you if you need more advice.