Dealing with debt

[user 13081]

So I'm in the hole with a credit card for a bit of money. I've got a 0% interest rate card that I'll be transferring the balance to. My plan was to be on the road this year but with this debt my mind tells me I need to work at least another year. I get paid pretty well in my current job and the thought of working for less and having a large amount of debt gets me worried. Has or is anyone working on the road have a lot of debt and are there any tips you would wish to share.

Thanks,

Paul

 

[Wabbit]

I got a lot of debt, 20k+ college debt and about 30kish in medical. Also a $450 judgement for breaking a lease that I have not yet contested. The security deposit was $600 and the lease was month to month.

On the college debt, that was 20 years ago and they refuse to acknowledge I am disabled for life(by law, it should be forgiven), the medical debt was from the last 10 years being in and out of the hospital and being under the assumption that medicare\medicaid paid it all.

I ignore it, but I am also not a "responsible" citizen. I don't need credit, if I cant save for it and buy it, I don't need it.

IMO, debt is the new slave master. Hope you get your troubles worked out, working 1 more year to pay it off seems easy enough to do if you wanted to. It took me 5 years to get out full timing(well, we'll see if its full timing or just an extended vacay.)

 

[Reducto]

I've been in serious debt a couple of times. Without getting into a lot of detail, the only thing that really worked was to get into a place where I was making better money then paying it all off as fast as possible. I'm out of the hole now and hope to not go back in.

Lower interest cards help save you a bit on interest but don't solve the problem. You need to either get things paid off before leaving your job or find a way to make better money on the road. Debt really limits your options, your priority should be on getting rid of it.

If it's a really large amount one option is to simply stop paying, wait for it to go to collections, then offer them 20% to settle. I did that with one of my cards and it's affected my credit score but I was still able to get a .9% car loan and refinance a mortgage without difficulty.

 

[Virgil Jones]

Just remember that any debt that is forgiven (wiped away by the cc company) is considered income at tax time and taxed accordingly

 

[poncho62]

Never heard of a 0% interest card.....How do they make their money?

 

[steamjam1]

That's where I started. 45K in university loans, 10K in revolving credit debt.

0% interest credit card = American Express. I swear by my gold card. I don't pay interest... Instead the merchants who accept the card pay a hefty fee... As long as I pay my bill in full every month. Keeps me disciplined...

My advice for anyone who wants to get out of debt: Never mind your house/apartment/room... Go get a van and move into it. Use the money you normally would have spent on rent to get out of debt.

 

[Trebor English]

Credit card companies get paid by retailers. It costs 50 cents or more for a card swipe plus 1 or 2 percent for Target or Walmart, five percent for a small business.

 

[user 13081]

Thanks for the replies. The card is 0% for 20 months, I need to do the transfer and then see what it looks like then with the payment. I just wonder if my payment would go down but I doubt that. I've been full timing for over 2 yrs and my goal is to really buckle down on my spending and sticking to a budget. This way I can see how it would look working for 6 months take a couple months off then work again.

 

[VanGrrl57]

I originally moved into my van to pay down debt and some other things which I have pretty much done. The only thing I have is student loan debt but I am on an income driven repayment plan which is affordable for me. I have no credit card debt and I want it that way. Other than my monthly living expenses and my student loan debt, I owe nothing else.

VanGrrl57

 

[Zizzer_Zazzer_Zuz]

As cliche as this is, it's simple math. Spend less than you earn. If you have debt, pay it off. If you have no debt, save it.

A terrible decision by my ex-wife made 20 years ago started a snow ball of consequences that rolled over us 5 or 6 years later. A decade of debtors serfdom (30% post tax from both full time paychecks) and everything eventually fell apart. Another 5 years on my own and I've paid it all off (even her half) and have managed to save a tidy little sum.

Student loan debt and tax debt is pretty much perpetual and will never be forgiven. Parents of dead college students are being sued for student loans. Adult children of tax evaders are being billed for their parents tax debt as they benefitted from the evasion and so in the eyes of the IRS owe the tax debt as much as their parents.

I am terrible at playing their game. I've gotten sucked back in a couple of times but I think I may have managed to break free this time once and for all.

Pay it if you can. As quickly as you can. In the long run it will make things easier. Then again, when/if the apocalypse happens maybe the financial systems will fail and all debt will disappear. Sadly, I have more faith in the banks surviving the next world war than any particular country and or political structure.

I'm an optimist! I look forward to the coming Zombie apocalypse!

 

[jimindenver]

Were it me I would take the year to pay off the debt and get ready in other areas. There was so much to do in the month before I hit the road and it all took longer than I thought it would. Sorting, donating, packing plus setting up mail services, banking and on and on. In the end I was working until I was exhausted pretty much daily, some things just didn't get done. I can tell you that it's harder to do out here than it would have been while I was still in the house.

 

[bullfrog]

Okay everybody, no one has mentioned bankruptcy as a solution to credit card dept. How come? Have laws changed to a point credit card companies can no longer take advantage of giving crazy credit limits to people that shouldn't be given the time of day and then collecting their insurance causing the general public to pay off through increased costs of goods or taxes, can you say housing market/auto maker bailout? Small, and I mean really small business, employing less than five people, 10 years ago were encouraged by the Small Business Administration to use credit cards instead of small business loans of less than $125,000 as they couldn't qualify unless they had 15 employees and since 1 in 7 would go bankrupt. Basically if you had $125,000 debt and paid a lawyer $1,000 cash and owned no property, your debt went away, seldom was anything repossessed , so you could give all your ill gotten gains to a partner, put the new business sign up and build a business. Many small mining companies and auto shops got their start this way. Individuals, even if they owned property and a car were allowed to keep them as long as credit card debt companies agreed to a payment plan which was usually 10 percent of debt payed off over a 5 year period. So $1,000 in legal fees, monthly payments of less than $300 for five years and after 7 years you could do it again. I'm sure laws have changed and differ by states but if debt is beyond your control and you won't be forced to make a loan for several years it is a well worth looking at. By the way a lot of people worry about their later life credit scores, by learning the credit card companies games most after 10 years have credit scores over 800! Just make sure you don't have get into debt trouble for at least 10 years and get debt counseling so you can save instead of borrow. Sell some of what you have to pay your taxes and create an emergency fund.

 

[blars]

Teaser interest rates on credit card balance transfers make you pay full interest on anything else you charge on that card until the full balance is paid off -- they apply payments to the lowest interest parts first. If you use the teaser, don't charge anything else on that card. Depending on the offer, there can be one-time fees of several percent as well, read the fine print.

 

[mariasman]

I can't help directly as I am not mobile. However, I have never been in debt - and I have never made more than $40K a year. My strategy is extreme frugality. Well, really, it's not a strategy so much as how I'm wired. All else equal, if I didn't have rent or a wife (why I'm not mobile), then I would be quite wealthy. Basically, I advise you take a hard look at your expenses. For example, my entire food budget each month is $150 - and I eat well (no junk). I don't buy useless crap, I wear the same shoes and jeans until they fall apart, I drive the car I bought in 2003 for $4500, no kids (that I know of), I have NEVER owned a credit card (although, I paid my wife's credit card balance of $9000 shortly after we were married, and I made her promise to never accrue another balance on a credit card - of course, she did it anyway, and we're still married - BTW, marriage is for crazy people).

 

[bullfrog]

Credit card companies are evil. In most states you are responsible for your spouses debts. Even when you notify them you will not be responsible for debts and do not ever want to receive any applications or correspondence from them ever, it still comes. Any married person seems exposed unless you can afford really good lawyers. After it happens a few times, sorta like gambling becomes an addiction, you just want to make it stop. I was able to make it stop for 7 years or so by paying off debts and building a credit score, buying items which could not be repossessed ( paying utilities, going to truck driving school, buying food and any thing I could sell for more than 10 percent of it's value) saving cash for the lawyer's fee and basically living off credit cards for a couple of years while driving a school bus to finish out my retirement at low income so my kids could go to college. I actually made more money working 4 hours a day driving a school bus than I would have teaching school full time and having to pay two college tuition fees. Went bankrupt which I would have done anyway without causing my kids to have tons of student loans they would have otherwise had as well. Had to pay back 10 percent because I had equity in the house over a 5 year period. Sold the house bought an RV ended up making more working seasonally traveling than I did in a sticks and bricks in my best year. The only thing I regret is the credit card companies got paid, but they did stop approving applications for credit cards long enough for us to learn to live on what we made and stopped the cycle of debt, at least so far.

 

[WalkaboutTed]

If the debt is small, you have two options, pretty much. Pay it off, or, if you have no assets that are grabbable or wages to garnish (and are are limits to that) walk away and deal with judgements and collections. Not a good idea if you're going to get an inheritance or other non-exempt income or assets. Any decent bankruptcy attorney should be able to give you that info on a free evaluation visit. Don't let them push you into bankruptcy, especially if you have no idea what is going on.

Do your research. Search for "exempt assets" and choose your state. Any exempt assets in bankruptcy are usually exempt outside of bankruptcy. Education is your best friend. Don't go off half-cocked on someone's "advice".

DO NOT negotiate or wait and pay a reduced or negotiated balance unless you want to pay Uncle Sam bigly.

I find it difficult to understand why, if someone commits a fairly serious crime, he/she does the time and the probation and is free, usually in couple of years or so. But, if someone gets in debt, even if they screw up, they are sentenced to years of involuntary servitude to pay off that debt.

You can draw your own conclusions.

 

[poncho62]

I'm sorry, but why should someone be able to get themselves into debt and then just walk away from it by claiming bankruptcy?.....Just like the criminal, do the crime, do the time. Criminals, once they do their time have a hard time being accepted back into society. Not saying that is right, but thats the way it is. Same with bankruptcy, the person will have a hard time with credit from then on. Something to think about.

I have had my share of debt in my 65 years, out of debt now and no plans to ever borrow again.

 

[bacawho]

I use my credit card all the  the time,usually for gas.I pay it off every month and have never paid interest.A lot of folks think of their card limit as money they have to spend.I think of it as money I have to pay.I run into people that tell me of the evils of credit cards and how they have gotten rid of them.Good for them.For me living with in my means has always been my answer to financial health.

 

[#1BonBonQueen]

So I'm in the hole with a credit card for a bit of money. I've got a 0% interest rate card that I'll be transferring the balance to. My plan was to be on the road this year but with this debt my mind tells me I need to work at least another year. I get paid pretty well in my current job and the thought of working for less and having a large amount of debt gets me worried. Has or is anyone working on the road have a lot of debt and are there any tips you would wish to share.

Thanks,

Paul

Well Paul, the first thing you want to do is when you transfer that balance, figure out how much you owe, and how much it will cost you every month in that 20 month time limit, to pay it off in 20 months, no interest. 
Cut the card up, or at least stop  using it, that you charged the amount on that you are transferring from. 
The new card, should be paid off in as little time as possible. 
The money you would normally be paying on that card, should be applied to the next debt you have and before you know it, you will be out of debt, and living the way you want, without owing anyone ever again.
Live within/below your means, always save, save, save.  Even if you are working to pay off the debt, save a little.  You may need it, and when you do, instead of having to use your CC for something you need, you can pay cash for it, and no added debt to have to worry about.
Good Luck!!!!
It is a hard thing to do, changing a habit, but if you really want to do it, you can.  You must figure out a budget, and always, always stick with it. No matter  what. Stick with that budget. 
Sharon

 

[steamjam1]

I use credit very sparingly. To be honest, my AMX is a charge card, not a credit card. I also have a Valero gas card that I use once a week just because it gives me cash price for fuel since I rarely carry cash anymore. I pay it off every month.

My University loans really pissed me off. I consolidated then refinanced them and really hyper focused on pay them down as fast as I could. It was a two and a half year mission. It really opened my eyes to what the Millennial Generation has to deal with. 50-150K in debt? 30 YEARS to pay it off???? OMG!!! and I have a solid "It ain't going overseas" career that can never be outsourced.. Imagine if I was just starting out in my early-mid 20's with that kind of debt??? Holy sh*t!!!

Anyways I abandoned Visa, Mastercard, Discover, etc and the only card I have now other then my debit card is my AMX.
​