I%26#039;m 19 years old and in dire need of help to handle my debt. I haven%26#039;t even left the house yet and I%26#039;m over $30k in debt. My parents are not an option because they haven%26#039;t the kind of money to help me.
I have over $2,000 in revolving debt...
(my credit cards have been put into debt consolidation and i have a past bank account that%26#039;s over $600 overdrawn and a current bank account over $200 overdrawn and still growing because the fee charged everyday)
over $22,000 in installment debt...
(over just one year in college and dropped out)
and over $6,000 in collection debt
(it was supposed to be a college loan but it never was certified so it went to collections)
I am in school and graduate in a couple months. I do hold a job but only work weekends because of school. Right now I struggle just to put gas in my truck. My credit is horrible, 475.
Please help me. I have no idea how to handle this or who to turn to. Each day it seems my situation grows worse and worse.
How do I begin to fix this outrageous debt I%26#039;m in?
Okay, everyone raves about Dave Ramsay, and he does have some good points, but if you want an action plan to get on top of your debt in the most efficient way, his method isn%26#039;t it.
Basically, you need to look at all your loans, regardless of the AMOUNT. Look at the INTEREST RATE. That is the most important thing to know about. The higher the rate, the more of your money that loan is eating. Pay minimums on all your debts, and any extra on the loan with the HIGHEST INTEREST RATE.
It doesn%26#039;t matter if that is the loan for the largest or smallest amount. It%26#039;s robbing you by accruing more interest than the others, so you need to get rid of that loan first. When you clear that loan, continue making minimum payments on your other debts, but move your extra repayments to the current loan with the highest interest rate. Keep doing that until all your debts are cleared. It%26#039;s no use paying off a loan that%26#039;s only costing 3% when another loan is costing you 25%, okay? So if you want to get out of debt as fast as possible, go for the throat. Do the highest interest rate first. It%26#039;s the best and most efficient use of your time, effort, and emotional resources.
If the overdrafts are not costing you interest, but are costing you fees, these fees may be higher than any interest, if you keep the overdrafts. Do some quick maths and work out how much it will cost to have those overdrafts for a year. That%26#039;ll give you an idea of their %26#039;interest rate%26#039;. Treat them as a loan.
Now, you%26#039;re a student. I suggest you work your fingers to the bone at work, and use every other spare minute at home studying. You need to graduate with decent marks. Let your employer know you will be available for more work in the coming months, and I suggest also looking for extra work. If you need help writing cover letters for job applications, email me and I%26#039;ll help you out. I%26#039;m pretty good.
Go through your possessions and put all the things you could possibly sell in the corner of your room. CDs, school text books, uniforms, sports equipment, furniture (if it%26#039;s yours, not your parents) appliances and gadgets, games, and anything else you can live without. Find something you think is most likely to sell, and put an ad for that thing only in the local newspaper classifieds. When it%26#039;s sold, move onto the next item. That way, you%26#039;re not forking out for lots of ads but you are generating some extra income.
Can you tutor someone for money at your school? If exams are coming up, someone might appreciate it. Surely you could find a few extra hours a week to do this kind of work. Put some fliers up at the school and hopefully you%26#039;ll get a reply.
If fuel is too expensive, you might need to cut back on your driving. Is riding a bike a decent alternative? Even if you live a fair drive away, you could park your vehicle somewhere, ride the last couple of km to school and back to your car. That would have to save you some fuel money, and it would be better for you, too. Or offer to car pool with someone. I do this, and they pay me $10 a week to collect them on my way to work. I%26#039;d be paying for that fuel anyway.
I do not recommend debt consolidation. It will make your credit score far worse, which will hamstring you later when you want to use a loan to buy a house. It only generates fees for lending companies. If you can avoid it, avoid it. You have the ability to pay all these loans off, and you don%26#039;t need to pay someone a fee to perform an unnecessary service.
You are deep in debt and have no available savings to buy a cheaper, secondhand car. So I don%26#039;t recommend that as an option. If you%26#039;ve got a phone, avoid using it to make calls out. That%26#039;s got to save you some money.
You need to stay focussed and ride this out. You can do it. Just because you%26#039;re over $30 000 in the red doesn%26#039;t mean you%26#039;re a complete failure. Plenty of people do dumb things when you%26#039;re young, but you%26#039;ve learned the hard way that this isn%26#039;t for you. So now you%26#039;ve got to dig yourself out of your mess. Focus on the debt that is costing you the most interest/fee wise, and clear that first. I know it goes without saying, but don%26#039;t use any credit cards or get yourself deeper in debt.
Your situation will grow worse until you try to reverse it. Follow the above strategy, and you should start moving in the opposite direction. It%26#039;ll take time. Just concentrate on keeping your head above water and paying a few extra dollars above your minimum repayments, until you can pick up more work after you graduate, and then really start attacking those loans.
Best wishes
How do I begin to fix this outrageous debt I%26#039;m in?
Go to the library and get %26quot;The Total Money Makeover%26quot;. Read it and follow it carefully.
Go check out Dave%26#039;s website as well.
How do I begin to fix this outrageous debt I%26#039;m in?
You need to find a reputable credit counselor to help you with this, they can contact your creditors and work out deals that you can%26#039;t do. Do it!!
How do I begin to fix this outrageous debt I%26#039;m in?
Yes, it does grow worse and worse, and it%26#039;s of your own doing. If you%26#039;re 19 and 30K in debt on BS personal purchases, you are high maintenance, girl!! Stay away from my boys.
How do I begin to fix this outrageous debt I%26#039;m in?
OK, first, call the people you owe the money to. Explain what your situation is, just like you did above. Be honest.
The lenders would rather work with you, then send your accounts to collections. Use this to your advantage. They may allow you to skip some payments without penalty, or reduce the interest rate for a period, or something.
Work out a payment plan that will not bankrupt you, and stick to it.
And, dedicate every penny you make to making payments. When you graduate, dedicate the first year to paying down your debts, nothing else. Buy nothing that is not a 100% necessity.
And, take a brutal look at where you money currently goes. If you cannot afford to pay your loans, here are a list of other things that you cannot afford:
Cell phone service
Coffee
Bottled water
Dining out
New clothes
New car
Cable TV
Jewelery
Lunch out
New shoes
etc...
Best of luck
How do I begin to fix this outrageous debt I%26#039;m in?
You need to seek advice from your Debt Counsellor. They will help work out your payments - how much you should be paying back the bank, and some money left over to keep a roof over your head. This also means no buying luxury things for a while.
How do I begin to fix this outrageous debt I%26#039;m in?
Here are some helpful resources:
http://www.debtorsanonymous.org/
http://www.cheapskatemonthly.com/mary_my...
http://www.crown.org/
http://www.daveramsey.com/
http://www.slice.ca/Shows/ShowsPage.aspx...
http://www.oprah.com/money/debtdiet/expe...
http://www.bankrate.com/
How do I begin to fix this outrageous debt I%26#039;m in?
Practically any type of loan can be wrapped into the debt consolidation process. Common types include finance charges, late fees and overdraft charges, credit cards, personal loans, utility bills, medical bills, car loans, store cards, gas cards and back taxes. A debt consolidation loan%26lt;!--allows you to condense your monthly payments into a single, simple bill, while lowering your interest rates and helping you pay down your debts more quickly and easily. It is also an essential tool in avoiding the much more serious step of declaring bankruptcy.
http://best-loans.awardspace.com/Loan-Co...
Unlike bankruptcy, in which debts are cancelled and your credit rating collapses completely, debt consolidation loans are essentially a type of refinancing, where several--%26gt;old loans are replaced with a new one that has more favorable terms. Your loan consultant will negotiate with creditors on your behalf, so you閳ユ獟l no longer have to deal with harassing phone calls and daily mail.
How do I begin to fix this outrageous debt I%26#039;m in?
You are not alone in this mess. You%26#039;d probably be surprised to find out that alot of college students are in debt up to their eyeballs before they even begin their careers. At least you%26#039;re in a position to help yourself and have supportive parents. Where to begin? Just take it a step at a time. It took years to build up this debt, so don%26#039;t expect it to disappear overnight. But you MUST take care of this now while you%26#039;restill young. Check out this site for help:
http://www.credit-card-loans-debt.com/cr...
How do I begin to fix this outrageous debt I%26#039;m in?
Many companies now provide debt reduction as negotiation. These companies deal exclusively in calling up your creditors and cooperating with them to get a sensible settlement for you. Their first contact with the creditor is to inform them that you have entered the program and chalk out a plan where they make nominal payments to the creditor each month from the payments you give them. At the same time, they will be cooperating with the creditor to reach a settlement that results in a win-win situation for you as well as the creditor. Generally, the settlement amount will be lesser than the outstanding balance. The installment of the settlement amount can also vary. Normally the creditors want you to repay the whole amount immediately, but in case you can%26#039;t, they are open to drawing up a payment plan, provided you make little up front payment and the remainder is repaid in some months. http://www.freewebs.com/getanswer/DebtRe...
No comments:
Post a Comment