Can you help with advice for a friends debt?

You have not provided sufficient information for real advice. What are her living circumstances, employment and income details, commitments aside from credit cards etc. Does she have assets – equity in property etc., as a second mortgage or equity loan repayment carries far less interest than credit card repayments.

There needs to a realistic appraisal as to whether she can get out of this, if not a voluntary bankruptcy might be a viable approach. It would mean that she will not get credit again for a very long time, but it might give her a chance to get back on her feet.

she has a home, but is not able to get a home loan (can’t think the name of them) and her employment is steady basically she get same amount of hours each week, only 1 job, not able to get 2nd. we sat down and added up her after taxes salary and subtracted her known payments to each card, and expenses like medicine that stay fixed each month. only other variables are the gas, food, and maybe a problem here and there if something breaks down. from her salary, it gave her about 180 per month to live off of. average of 45$ per week.

and another thing, she has a retirement account but she has borrowed from it and payments come out of her paycheck to pay that back

I am so sorry your friend has to deal with any of this.
I’ve tried working on one debt at a time myself and found it quite useful however in the meantime the other debt collectors got quite pissed off.
What I would recommend however is that you calculate all living expenses before including the credit payments. Food and gas are necessary for survival. Debt payments are not. They must be included before debt payments are calculated in. Once all her essential living expenses are calculated you distribute the remaining money to debts. One must meet their necessary survival needs or else they will emotionally and physically break down.

Look at it this way. If the debt collectors do go after her for not paying the most that can happen is they garnish her wages. Only one company can garnish at a time. And in most states the cap is 30% of a paycheck or less. It sucks but it is a relief to know what “the worst case scenario” includes.

If she is currently meeting her commitments with the credit card debt, and has equity in a home then she should be able to get an equity/second mortgage loan. It is a sound financial response and most lenders will not just accept but recommend this approach. If she is falling behind, then no, it will be difficult. The difference at current rates between a bank loan against property and credit card rates is huge – she would have an immediate saving.

she is keeping minimum payments made on the cards and they are ontime. home equity credit is out of the question due to relationship issues.

If she is or can become really organized
If she still has sufficiently good credit

* Have her call each of the credit card companies and try to negotiate lower interest rates for each of the accounts.

* Have her call banks and other credit card companies who might be offering limited time balance transfers at low interest rates. She can shop again when the low % term gets ready to expire

* See if she is open to working 1 extra day a week and devoting that money strictly to the credit cards.
I did this for about 2yrs and used the money for my mother’s house down payment after relieving my own debts

If she is in a real bind, have her call the credit card companies and see what programs they offer for those in financial trouble. Many offer programs that stop interest and late fees for the duration, but suspend the account until you’re back on track. I just had to do that myself, and it sucks, but it does significantly lower the monthly payment when interest is taken out of the equation or at least reduced.

The only way my brother got out of that kind of debt was through an inheritance when our grandmother died. However, I would agree with @augustlan : most credit card companies want at least some return and so may be willing to offer a solution of sorts.

Otherwise, if she is able to get some sort of loan through her bank that is at a lower interest rate, then it might make sense to get the loan, pay off the cards, and then make the loan payments on time.

Earn as much as possible, spend as little as possible.

Look for ways to increase income. There are always things you can do to earn more money.

Cut all expenses ruthlessly. What is the absolute minimum you can spend, and still survive? Every penny counts.

She has a serious problem, and it’s not just financially, she has a mental compulsion to purchase more goods despite the fact that she knows she cannot afford them. She needs to talk to a qualified debt counselor who will give her help, and then talk to a therapist to get to the underlying issue of why she feels she needs to buy stuff all the time. This is what I would recommend. Start with the debt counselor, if they can’t slap some sense into her, onto the therapist. Of course, that’s only if she wants to be helped, you can’t help her if she doesn’t want to change.

She also needs to stop using the cards completely. Full stop. End of cards, that’s it, freeze them in ice. She needs to realize that she is paying thousands of dollars in penalties for food she’s already eaten, stuff she’s already used, etc. This does not make any sense.

Do some research in your area. Google your city and “debt counseling” or “debt help”, ask for recommendations from friends, Google the company before signing anything.