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Thread: 40k in debt! Need a plan

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    Default 40k in debt! Need a plan

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    Last edited by pumpkinpie; 12-09-2013 at 05:16 AM.
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    God/dess shasta's Avatar
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    Default Re: 40k in debt! Need a plan

    It is really great that you are addressing your debt. You are young, and because you dance, this is doable. Make sure you communicate with the people you should be paying. If you don't, they can sell your loan plus interest to another party. Your 40K could turn into 200K in ten years.
    Pay it off! And then finish school!
    Think of it as a a one year sacrifice. Even if you put 2K per month toward your debt for one year your debt would be a whole lot more managable.

    If your debt is under control and you are paying it off, the debt isn't going to kill your credit. What you do about your debt can really make or break your credit.

    I don't think you need a FA for this. Try to live like your not a stripper. Try to live like you make 350-400 per week- work expenses aside.

    Credit card would be the first to take care of. Student loan would be the last that I would fully pay off.
    Last edited by shasta; 04-25-2007 at 12:33 PM.

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    God/dess Emily's Avatar
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    Default Re: 40k in debt! Need a plan

    your situation is almost identical to mine when I first started dancing. I had about that much in student loan debt and then that much in other misc CC type debt. Kinda weird, actually.

    That's why I started dancing though. I used to have a day job and basically anything I made on the weekends dancing went to the debt. It wasn't a set amount, but usually between 500-1000/week. It took me almost 2 years (because really....not ALL my dancing money went to debt because I'm just not that disciplined!) Credit cards first, then student loans though.

    You are doing it the right way.

    Now, 5 years later, I'm out of debt and in the black. Compound interest is no longer my enemy, but my friend. it feels great!

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    Default Re: 40k in debt! Need a plan

    start paying off the highest interest rate debts first, which I assume is probably your 'store' accounts - while still making the monthly payments on your car loan and student loan. Seeing as how the vast majority of your debts are in the form of loans, which you CAN'T go bankrupt on, your only real option is to stop spending and start paying !

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    Banned Katrine's Avatar
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    Default Re: 40k in debt! Need a plan

    Read my post from another thread:
    http://www.stripperweb.com/forum/sho...7&postcount=14

    www.annualcreditreport.com is the only free report, and you can get it once every 12 months. Request it from all credit agencies.

    Sometimes its actually better to pay off a smaller debt with a little lower interest first rather than the highest interest debt, but in most cases Mel is correct. Use the dinkytown calculators.

    Similar to what one would do w the IRS, call the collection agencies and beg for a deal. Get everything in writing.

    Save money too, always have a cash reserve around.

    You don't need an Advisor for this. I will say that I've helped clients with debt issues, but my role was more about bringing reality to the table, motivating them, and making sure that they were neglecting things like retirement. You're young, you can do it yourself!

    Create a plan and stick to it. Calling up the collect. agencies sucks ass! Do it with a friend who can be near you for support when they are assholes. Good luck!

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  6. #6
    AlexxaHex
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    Default Re: 40k in debt! Need a plan

    I wish I could go back to when I was 20 and get a good grasp on my financial matters like you are attempting to do. I think it's great that you're thinking about this.
    The #1 thing is to STOP having fear about your debt. I still have a lot of it and I used to avoid thinking about it. I didn't mind paying larger security deposits on apartments and cell phones (I figured hey, it's better than dealing with my student loans)...but now I am getting older and want to buy a house and get a decent car loan...I am paying about 17% interest on my car because I have run from my debt for so long and my credit has been run through the shredder.

    You will NEED decent credit to be able to do the things you want in life. Even renting an apartment is almost impossible (especially where I live) without decent credit. Now it is even harder to file bankruptcy than ever too. And those student loans will stay with you forever if you don't start paying them down. I agree that you should start communicating with your creditors (no matter how bad it sucks) and making an effort to give them something. Stripping is a great way to pay things off if you budget your debt into your spending.

    Live frugally!! Cut down on unnecessary things, like pedicures you can do at home, expensive clothes or eating out at restaurants. I didn't think I could cook, but I am finding a whole new talent that I didnt' know I had!

    Organization is really important also. Keep track of what you spend, what you make. Keep copies of your bank statements and IRS forms. Once you start putting numbers together, you will see just how possible it is.
    If I can start dealing with this stuff (which has been terrifying to me at times), you definitely can. You will feel so good when you take control of your finances.
    I think you already know most of these things. It helps to feel as though you are not alone though. Maybe we can motivate each other!

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    Default Re: 40k in debt! Need a plan

    from what i have learned student loans are "good debt" to have.

    pay off your highest interest rates first, or you could always try to settle or negotiate with your creditors.

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    Default Re: 40k in debt! Need a plan

    Student loans are an acceptable form of debt. However, because I dance, I am already paying off my loans from undergrad and take out the minimum amount of need for further educating myself. University fees add up way too quickly...

    Worry about your credit card first, that's where the nastiest interest will be. Just recently I completely forgot that I had a Capital One "no hassle" card and forgot to pay it for two months. I only had about 300 dollars on it when I initially charged it, but completely forgot about the minimum payments. I paid it off a few days ago and the bill finally was over 500 dollars.

    The retail stores too you should worry about as well, and your car loan as well. The student debt you won't have to worry about for another couple of years. Some people live their whole lives with it now, just like a mortgage.
    Isocrates: “Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.”

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    Default Re: 40k in debt! Need a plan

    yeah no hassle if you dont use it.

    i hate capital one they are the worst credit card company i have ever seen.

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    Default Re: 40k in debt! Need a plan

    Good advice here so far. Make sure you always make minimum payments on all your debt, especially the ones held against assets like your car. You should apply your extra money against the highest interest debt to knock it down asap.

    I don't know your personal income situation so I'll make two generalizations.

    If you are sure you're going to have enough cash flow monthly to pay at least the minimum on all your debt then do that and then apply every extra cent towards the debt with the highest interest rate. So, minimum on everything then all the rest on the highest %. Once the highest % debt is paid off, use the excess cash to pay off the next highest one.

    If your monthly cash flow fluctuates such that on occasion you will not be able to make minimum payments, then you should not apply every extra cent towards your debt each month. This will require more discipline and budgeting skills. You'll need to build up a reserve that you cannot touch and use to pay the minimum on months that your income is low. I'd say maybe at first pay the minimums plus maybe half your extra cash. Once you've saved up something like 3 months of minimum debt payments then apply every extra cent towards the highest % debt as above, maintaining the reserve. Draw from the reserve on slow months but build it back up when you have extra.

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    Veteran Member Robertjordan's Avatar
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    Default Re: 40k in debt! Need a plan

    Oh yea, I wouldn't worry about your credit score right now unless you just want to check it for future reference. You need to concentrate on paying your debt as I described above, steadily, on time, and never less than the minimum. Missing payments, excess debt and unstable income will ruin your credit so fast your head will spin. It's the person that does the little things consistently and over the long haul that has good credt. Stick to it and in a few years you'll be in good shape.

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    Default Re: 40k in debt! Need a plan

    Quote Originally Posted by i.breathe.in View Post
    yeah no hassle if you dont use it.

    i hate capital one they are the worst credit card company i have ever seen.
    Yep, I cut mine up after they refused to lower my interest rate. Was 28.19 apr I think. Just ridiculous. I have an American Express and VISA which do me fine.
    Isocrates: “Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.”

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    Default Re: 40k in debt! Need a plan

    Can you really dedicate 3 grand a month to paying off your debt? That's pretty impressive.

    If so, then your plan is simple...make that 3 grand the first check you write each month after you've paid your rent, utilities, and other "necessary" bills. Do not spend any money on anything else until that 3k is written every month.

    You can also call your student loan lender and ask for a deferment, I believe.

    Actually, most lenders (credit cards, etc) are willing to work with debtors...but one of the WORST things to do is not call and ask them. Call all of these lenders, explain your situation, and see if they'll be flexible with their repayments...

    Also...NEVER send nothing. That is probably the worst thing to do.

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    Default Re: 40k in debt! Need a plan

    Honestly, I would reccommend consolidating your debt if it is that out of control. I am in Debt Free right now and love them. I will be actually "debt free" soon, lol
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    Default Re: 40k in debt! Need a plan

    i dont see this amount as a huge problem. i had something like that after college and was out of it in about 3-4 years. most likely you will have some form of debt during your life. school, car, home, more school, kids school, kids car, etc etc. the problem is missing the payments. and your rates will always be sky high unless you take care of this.

    as stated, you can defer the school loan due to financial hardship. im not sure the process/proof required though.

    also i have called the CC companies many times to lower the rate. i have not been turned down once. just takes talking to more than one person. the last bit of CC amount I have I was able to secure a 1.9% for the Life of that amount. lower than my car loan! tell them youre going to take one of those interest free for a year deals on another card if they cant lower it. they'd rather get a small percentage of your money than none at all.

    but if you can truley save 3k a month, youre clear of CCs in 3 months anyway. dont worry about the school loan so much. its not a terrible thing as the rate is usually low AND you can deduct the interest paid from your taxes (up to a certain income level).

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    Default Re: 40k in debt! Need a plan

    Be careful about debt consolidation loans...they are usually not good for your creidt score (you're taking on more debt in the eyes of creditors), and are often riddled with codicils that can end up costing you more money (often if you miss a payment, your rate adjusts upward...a lot).

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    Default Re: 40k in debt! Need a plan

    I was in a similar situation, and here is the advice I got from a consultant.

    1. Pay off your smallest accounts first, no matter the interest. Even if you have an account with a really high interest rate, pay the one with the least on it first. Then instead of 5 accounts w/ interest, you've got 4, etc.....

    2. When you pay off a credit card account, don't close it. Try to keep a little bit of money on the account. Keep between $50-$200. Pay the monthly payments. This is the best thing that you can do to rebuild your credit.

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