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ItalianPrincess1217's avatar

How can I catch up on my overdue bills at this point?

Asked by ItalianPrincess1217 (11979points) January 27th, 2011 from iPhone

I recently made a choice that drastically changed my life forever. I left my husband. I now have a new life with a new man and we just found out there’s a baby on the way. As blessed as we feel, we’re struggling right now to make ends meet. I tried to get caught up on some overdue bills by applying for some payday loans but now I’m finding I’m worse off than before. The loans carry a ridiculously high interest rate and many fees. I’m over drafting my bank account every other week. I owe rent from last month still. I keep telling myself once my tax return comes, I’ll be caught up. But at this point even my entire return won’t be enough to cover my debt. This doesn’t even include all of my past due credit cards, of which I have 5. I have about 6 months to get my crap together and get my feet on the ground before the baby is born. Asking family for help isn’t really an option for me. They disagree with my decision to leave my husband so they figure, hey if she had stayed with him she would have plenty of money… Does anyone have any helpful ideas on how to begin getting my debt under control in time for my baby? Should I get help from a credit counseling place? A debt settlement company? A loan to pay off debt? (My credit used to be very good. Now I can’t even get approved for a store credit card. Not sure how I would ever qualify for a loan big enough to cover my debt.) Any suggestions are greatly appreciated. This is something that eats away at me on a daily basis. I worry myself sick.

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12 Answers

jazmina88's avatar

Call the creditors and get lower interest, if possible and work out payment plans.
Go to food banks. Cut down expenses.
Pay off the cash now loans. They are hard to get out of, once you’re sucked in…but a monkey off your back when you’re out.
second jobs??
and congrats. good things are worth the dips in the road.

WestRiverrat's avatar

Talk to a nonprofit credit counselor. If they don’t have to try to sell you a package deal, they can offer more honest advice and assistance in setting up a workable plan with your creditors and you.

Austinlad's avatar

Call the folks I suggested previously. I promise they can help you.

mrrich724's avatar

@Austinlad who are those folks?

LuckyGuy's avatar

Payday loans are the worst. they border on “usury”. You have to get rid of the them.
Is there anything you can sell? Is your new partner in a position to help?

choreplay's avatar

Tune into Dave Ramsey, financial guru broadcasting online. He specializes in eliminating debt. He explains a technique called the snowball method. You pay minimum on everything accept the smallest amount. You throw everything you can to eliminate that smallest debt. Then you move up to the next smallest and so on.

Simone_De_Beauvoir's avatar

I’d recommend consolidating your loans and switching them to the government, in that you’ll be paying it off to the government. Then go google IRB calculator and see how much your loan payment can be lowered to, based on your income.

tranquilsea's avatar

Stop using payday loan shops. Never use them again. They are built in a manner to get further into debt. My mom, when she was alive, worked for one and she used to counsel her clients on how they could stop using her services. Her employer came close to firing her because of this. That has to tell you something.

Cut up all your credit cards. Go seek out a credit counsellor who can help you consolidate and then keep to your payment schedule no matter what.

You’ll need to learn to embrace your frugal side. Never buy anything new that you can buy second hand….that includes all the baby’s clothes (they don’t care what they wear and they only wear them for a few months before they’ve grown out of them).

wundayatta's avatar

You have to cut your expenses to the proverbial bone, and then further. Ride a bike. I don’t care how far it is. Put your car up on blocks and cut the insurance. If you have to get somewhere too far away, find someone to give you a ride.

Get rid of cable TV. Get the cheapest phone plan you can get. Don’t go out for food or entertainment. Make all your own meals. No coffee or tea out either. Bring everything from home.

Shop at thrift stores when you need clothes. Close off every room in your house except one, and live there. Don’t heat the other rooms. Unless of course you rent and heat is included.

Find a cheaper place to live. Preferably closer to where you work.

Pay off the payday loans first. They are going to kill you forever if you don’t get rid of them.

How much debt do you have? You may have to go through bankruptcy.

But yes, get nonprofit credit counseling and negotiate a plan with every creditor.

ItalianPrincess1217's avatar

@wundayatta I would like to think I already have cut as many costs as possible. I live in the cheapest apartment available in my city. I have only an antenna for cable and it costs me nothing. I’m on the budget for heat and electricity (it only costs $45 a month for both) and I have separate thermostats for every room so I already “live” in one room and only keep the heat on in there. Between the two of us we share one car and I only live 5 minutes from my job. I don’t buy clothes for myself or anything that isn’t a necessity. I shop at discount food stores.

I have about $7,000 of debt with all my credit cards. I also have some unpaid medical bills, plus about $1,000 in pay day loans. I have recently stopped paying on most of my credit cards because it was either that, or starve. My health was more important to me than paying a minimum charge on a credit card. I used to have very good credit and would love to work at getting it back.

wundayatta's avatar

@ItalianPrincess1217 Well it sounds like you are doing as much as you can on the cost cutting side. So that leaves the income side. Any chance of getting a better job?

ItalianPrincess1217's avatar

@wundayatta Absolutely. I’m always looking. My job offers stability but that’s about it. And I’ve thought about getting a second part time job but it’s impossible. My schedule at my current job is completely unpredictable and I don’t know my schedule until a week beforehand. I have an option of going back to my old job and doing collections. However, it’s not stable. The money is good and there are bonus checks if you make your goal. I’m just not sure if security is better than hourly wage. It’s a tough decision.

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