debt: how to handle?

[Anonymous]

i am in so much debt that i am starting to get really depressed. i have gov't student loans, in addition to student loans from school. plus credit card debt. mostly the credit card debt is from years past but has grown substantially with interest charges + late fees.

until recently, i was way underpaid and all of my money went toward living expenses (rent, electric,food, the basics). i had a second job for about 6 months but it didn't really generate any extra income, it allowed me to keep my head above water. i recently got a higher paying job but this coincided with a rent increase. everything would be okay or at least better if i didn't have so much debt. i don't know what to do.

creditors are calling so much that i'm not answering my phone these days. i'm so grateful for caller id. i don't know what to do. i'm too young to file for bankruptcy. i really don't want to do that because of the lasting implications it'll have on my life. at least for the next 7 years. i've thought about calling consumer credit counseling services because they can lower interest rates, waive late fees,etc. but i've heard that it can also damage your credit rating (like i can do much more damage!) but that it depends on the creditor that looks at it.

i would really appreciate any advice about how other people are handling debt or how they got out of it. at this point, it's making me very depressed and ashamed. i wouldn't dare talk to the people in my life about how bad it's gotten.

thanks in advance for your support.

[greig]

Hey, don't stress out! Debt isn't a nice thing but it's a fact of life and something most people have.

The most important thing is to stop avoiding it. Get together a list of all your income every month, things you need to buy (rent, food, utilites....) and then everything you owe.

Speak to your creditors and tell them your situation. Let them know your expenses and stuff and make them an offer to pay off x amount every month. They'll complain but they do secretly realize that its their best option for getting their money.

Check to see if you can get cheaper deals on your debt. Some credit cards offer 3% intro rate while your existing rate can be up to 18%.

The biggest thing is to accept your situation and start actively working to get out of it. You'll feel far better when you can see the situation starting to improve.

Check out http://www.fool.com/credit/credit.htm for more advice and remember, don't stress!

[Anonymous]

I had the whole debt problem over a year ago. I had creditors calling me all the time---when they started calling me on weekends demanding a check--I realized I was in over my head.

I bit the bullet and called on of those non-profit credit management agencies. I had about $10,000 worth of debt in credit cards alone. They made me cut up my cards (I couldn't use them anyway, they were maxed) and now I make an simple $200 payment a month. It was hard initially to get used to making that payment but now I know that I'll have my cards paid off by the time I'm 30. It's a good feeling to know that I WILL be able to have good enough credit to buy a house.

These things do affect your credit rating but I've been able to get apartments with the semi-bad credit. If you want to get another card or a loan you'll be turned down but you can always have your parents co-sign.

Look into it---I love not having them call me anymore and it's been helpful learning how to live within my means.

[scoyl]

First off, you're avoiding the problem (avoiding calls, etc.). Fortunately, you've taken a step in the right direction by asking for advice here.

What if you sat down and figured out how much you're in debt and then find a solution?

I've written a few articles about organizing your finances that you might find helpful:

http://www.sourcechannel.com/finance/index.htm

Let me know if you have any more questions.

[Anonymous]

Debt is not the end of the world. I, like you, avoided the phone...caller ID was a god sent! But then i realized that was not going to solve the problem. I called one of those agencies that consolidates your bills ( i had about 8K in credit cards) and now i pay $200 a month. Yeah, i heard that consolidation may look bad, but i recently bought a car- the interest rate is a little high but I can refinance once i prove to them im going to pay on time, which i have been doing. It is all to get my credit back in order. Dont worry....just stop ignoring the problem and do something- trust me, you will feel so much better and less stressed out!

[Anonymous]

Does anyone use MS Money? It came with my Gateway laptop, and the built-in tutorial videos are useless. I'm excited because I was able to figure out the program enough to set up a payment plan to save up a downpayment for massage school, but somehow it's getting all messed up now with 2 months left for saving and I'm pretty lost in the program. I've been able to get it to sort of work, so I don't want to back out. I NEED INSTRUCTION. I NEED HELP, OR A CLASS, OR SOMETHING. Gateway doesn't offer them. Please help! MS Money.

[Anonymous]

i am the original poster of this message. finally, after much procrastination and denial i called consumer credit counseling services. now, i'm on a plan that will eliminate my debt in a 1.5 years (and, of course, sooner if i double up on payments). i can't begin to express how great it feel to see an end in sight.

thanks so much for all of your advice and for taking the time to respond.

[crazy-girl]

Congratulations!
I was so nervous before I made the big jump to getting my credit in line but I've learned a lot more about living in my means.

You took a fantastic step!