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I am $15,900 In debt Please Help? |
Hey everyone, I'm 20 years old. I go to college and it's my 2nd year. I have a full time job. I am $15,900 in Debt with Credit Cards and Personal Loans. I am living at home with parents. I Owe on credit card, Bank of America: $7,900 ( Minimum Payment is $150) Personal Loan: $8000 (Minimum Payment is $238) Total : $15,900 I make $1600 a month working Full Time. My other expenses are(Monthly) Car Insurance:$180 Phone Bill: $65 Ok, what I also didn't tell you guys is that I had a Gambling Problem. $10,000 of that Debt is due to my gambling habits. I learned my lesson and I want to start out Fresh!! How many years would it take for me to get rid of this debt? I want to live a nice life and for the past 2 years my whole life has been a struggle because of this debt. Could Anyone help with a financial Plan for me? And the quickest way? Thanks ~CL You bring home $1,600 a month, or that is before taxes? If it is after taxes, and you only spend $245 a month, then you can put about $1,300 toward your debts. $15,900 divided by $1,300 is about 13 months. Factoring in intereset, you should be out of debt in 2 years. Make the minimum payments on your two bills. On the lowest dollar value (BOA), put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the personal loan. Go to the library and get "The Total Money Makeover". Read it and follwo it carefully. Go check out Dave's website as well. www.daveramsey.com I had a very similar problem in the past.....Ok make sure that you always pay the credit card every month, even if its the minimum payment. DO NOT MISS PAYMENTs. Call the credit card company and ask them to lower the interest rate, assuming that your credit is good. If they refuse, threaten to take your business somewhere else (another credit card company). You basically have two options: 1. Bite the bullet and ask you parents for the $$$. 2. Pay the minimum every month and concentrate on school. realize that once you start working, you should be able to pay it off within a year. Also, DO NOT use your credit cards for any reason from now on. Use only cash or debit card. Cut them in half and throw them away. Hope this helps. Dont freak out. 400 dollars a month is managable for the minimum payment. Also, Do'nt even consider filing for bankruptcy. It will screw up your credit for a long time. Just stay focused on school. Welcome to the real world, where everyone stays in debt. Everyone has been or are in debt and personally, I do not think you debt is outrageous. Get ahold of your gambling and you should be ok. Just be smart. Kyle http://www.homebustruths.com Given that you can stop the gambling habit, please look at http://www.bills.com/guide/ It's a budgeting guide you can use to plan out your repayments. There is a wealth of other information there as well. What is the term of your personal loan? Seems like you have quite a bit of money left over given the fact that you don't have to pay rent. If you don't have any savings plan, you should use the next few years to pay the debt down. Then you can start to put aside some savings. http://www.bills.com/ You've done a very good job by admitting your mistakes (gambling). Now, what you can do is find a second job to help pays off the debt. No debts can be paid instantly. It takes time. Pay the one with the highest interest rates first. Try to find other financial institutional that offers zero interest rate on balance transfer. And the most important thing is: don't use you credit card. Pay everything in cash or use a debit card. ps: even though you are living at home, you should at least help your parents with some bills or help around the house. |
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