How to handle massive Debt?

I made a lot of mistakes, for many reasons, and finally am bucking up to them.

Here is my situation.

I have $100K in unsecured debt (80 credit cards and 20 to line of credit).

I make $83500/year. I can expect a $7500-10K raise in 10 months.

I can pay $1500/month in min payments this debt. This will have it paid off in roughly 6-7 years.

My min payments are about to become $2100/month. I have $10K in the bank.

What can I do? What is the best way to handle this?

I have been on a budget and sticking to it. However, I feel like the road is very long...and I%26#039;m worried being so close to the edge. I also want out of this problem (no shortcuts, but not 7 years...).

Another job is not possible since I%26#039;m working 60+ hours now.

What options are available to me?

How to handle massive Debt?

Do you own a home? Even if you don%26#039;t I would attempt to consolidate the debt. Talk to your preffered credit card carriers and see what they will offer you. Getting a cosignor may help if you don%26#039;t own a home to get a equity line of credit.

How to handle massive Debt?

Honestly, I would suggest looking to see if there are any financial counselors (or similar name/service) in your area. I know my sister went to one and supposedly it didn%26#039;t cost her anything to have an appointment with them.

How to handle massive Debt?

try out powerpay.org, it is a university funded website that allows you to input all your debts and then shows you the shortest way to pay them off, whether its highest interest first, shortest term or whatever. It puts it all into perspective for you in a chart and shows you exactly how much interest and time you save by making %26quot;power payments%26quot;. My friend that is a family finance major in school told me about it and it%26#039;s so simple. You just create a user name and password, it doesnt cost anything and doesnt ask for any personal info, you can use a fake name. I recommend it just so you can see the big picture. It really helps!

How to handle massive Debt?

I think you need to take a serious look at your budget. Do whatever it takes to get this paid off.

R

How to handle massive Debt?

Credit card debt sucks. High interest and non-deductible. Consolidate or home equity loan which at least is tax deductible will help. And then you need to cut back on expenses. Smaller place, have a roommate, smaller and cheaper car, don%26#039;t eat out, turn down the thermostat. Anything you can cut back on. And pay down debt! Good luck!

How to handle massive Debt?

Okay, first of all, you must work out which interest rate on which debt is the highest, and then concentrate on paying that debt off first, while making minimum repayments on the others. That is the most efficient use of your money and will get you out of debt the fastest.

Take that $10K out of the bank and put it on the highest debt. You can%26#039;t have savings sitting there earning you between 1% and 3% interest per annum (which you have to pay TAX on!) when you could be using that money to save you 19% interest on another loan. Put it on the debts, and continue to make the payments that you would have made had you not added this money to the debts. This will reduce the interest you pay, maximising the effectiveness of the payments, and if in an emergency you need the money, you should be able to withdraw it from some credit cards.

Don%26#039;t have savings. Just pay off the debts. Don%26#039;t have %26#039;savings%26#039; sitting there like stagnant water when you could be putting out a big fire -- the debts.

When you get your raise, put that into the debts. Pretend that raise never happened. You need to start living like you earn $20 000 a year. If you%26#039;ve got a late model car, sell it, and buy a cheaper, older model. Car pool to work. Get a boarder or renter to split the bills and the rent. Sell some of the stuff you own. Surely there%26#039;s furniture, books, cds, cookware, appliances, and other gadgets around your house you could sell either in the newspaper classifieds or through a garage sale. If you want to get out of this debt, you are going to have to start living without stuff that you don%26#039;t need.

Don%26#039;t buy any new clothes. Buy minimal, basic groceries. Make sandwiches and take those to work instead of buying lunch. This saves me between $700 and $1000 a year. Stop using your phone. If people want to talk to you, let them call you. Cut the internet down from broadband to dial up, or scrap it altogether. Grow your own vegies. Shop at factory sales outlets for food, and buy all your food in bulk. Don%26#039;t buy convenience food. Make extra serves of meals and freeze them so you don%26#039;t buy take out.

Yes, it%26#039;s tough. I%26#039;m trying to pay my house off in 5 years, and my partner and I are on minimum wage. Combined we earn half what you do. But we can do it. Your debt could take 7 years to pay off, but you%26#039;ll do it eventually. Just get smart with your money, and make it work for you. Only time and more money put on the debts will accelerate this for you.

Best wishes

How to handle massive Debt?

At any point in collecting 80 credit cards did you question your sanity? Ok, let%26#039;s assume not. Don%26#039;t think about your raise until you have it in your paycheck. Using the other facts and figures you have a few options and if one won%26#039;t work consider a combination. You can get the advice of a non profit consumer credit (not consolidation or settlement) company like those listed with nfcc.org. You can sell some of the items you bought that you really don%26#039;t want or need. You can negotiate lower interest rates of some if not all of your credit cards. You can use that $7.5K+ raise to focus 100% on debt repayment as though it doesn%26#039;t exist and you%26#039;ll be debt free in a little more than a year. It doesn%26#039;t sound like you have a problem with anything but patience.

How to handle massive Debt?

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How to handle massive Debt?

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