Trying to help GF with Debt issues

[Falloutboy]

GF got screwed in her divorce and really knows nothing about finances. while i'm not to the point in the relationship that I'm going to bail her out I want to help her figure out a game plan to figure it out, since she has been basically trying to just pay it for the past 1.5 years and just can't make any dent in it and didn't know what to do.

its mostly Credit Card, my gutt says bankrupsy but she is able to afford an amount per month to pay it off within 2 years if there was no interest. but because of the interest she isnt making any head way on it since that is barely the minimum due. my gut says bankruptcy but its not such a huge amount to me looking at it but to her she is drowning in it (paying half her income to debt that is not getting better) are there options to lower the interest to a point it would make sence to continue to pay it down (her credit is shot already so nothing to really save)

 

[CurseTheSky]

What's the amount, what are the payments, and how much does she make?

 

[ShawnD1]

Ride the bus. Look for those ads about credit problems. Wriye down the number, call them, never ride the bus again.

 

[Doppel]

Two years isn't really that bad. Obviously call the credit card places and demand the rate gets lowered because bankruptcy is on the table and if they can't do it that's the route you're taking.

 

[Falloutboy]

What's the amount, what are the payments, and how much does she make?

from what i've been able to figure out about 20k in debt. unsecured, she has a car loan and student loans in addition to that but those she is stuck with. she makes about that per year. basically her ex had crap credit so she carried all the credit cards and during the divorse she wanted so much to be done with it she just took it up the pooper (wish she did in real life lmao) and took all the debt. now she has the forclosure on her record from there house + the credit card debt.

 

[ShawnD1]

So she works at mcdonalds? That sucks bro. Does she at least give you the 50% employee discount?

 

[Vic Vega]

$20k in debt making $20k a year is not anywhere near bankrupt, especially since she had the ability to pay. It's going to cause her to change her lifestyle to pay it off however.

 

[JulesMaximus]

Maybe she could take out a personal loan to pay it off?

 

[Vic Vega]

Maybe she could take out a personal loan to pay it off?

From who? No one is going to sign a signature loan for that amount.

I'd sell the car immediately and ditch the car payment.

 

[Doppel]

If her credit is totally fvcked maybe it's not worth even trying at this point. Still, $20k really isn't much money, even though it is a year salary. Maybe she can make more money at some point.

 

[Doppel]

From who? No one is going to sign a signature loan for that amount.

I'd sell the car immediately and ditch the car payment.

Yeah, but if she needs a car (don't we all?) and it's the majority of that (?) it sounds more or less like she just has a car loan which is no big thing.

She'll certainly never get a personal loan without great credit.

 

[Falloutboy]

$20k in debt making $20k a year is not anywhere near bankrupt, especially since she had the ability to pay. It's going to cause her to change her lifestyle to pay it off however.

her lifestyle is basically paying the debt and surviving. and yeah I know its not bankrupt but its also non sustainable for her. and yeah she doesn't make bank, she really had other priorities in life and big career.wasn't one of them.

and to clarify its 20k in unsecured + car and student loans which she is stuck with. needs the car, and its really not the amount but the interest all her cards have reverted into the 29% interest range and I know from researching this alot while there are options to lower that they do more damage to credit than a bankruptsy.

only reason i'm even caring tbh is I really care for her and things are about to get more serious I have my own financial goals paying 20k of that debt off would set them back, and if we did end up getting hitched down the road tbh she would be better off ethier way having things sorted now rather than later.

 

[Corporate Thug]

her lifestyle is basically paying the debt and surviving. and yeah I know its not bankrupt but its also non sustainable for her. and yeah she doesn't make bank, she really had other priorities in life and big career.wasn't one of them.

and to clarify its 20k in unsecured + car and student loans which she is stuck with. needs the car, and its really not the amount but the interest all her cards have reverted into the 29% interest range and I know from researching this alot while there are options to lower that they do more damage to credit than a bankruptsy.

only reason i'm even caring tbh is I really care for her and things are about to get more serious I have my own financial goals paying 20k of that debt off would set them back, and if we did end up getting hitched down the road tbh she would be better off ethier way having things sorted now rather than later.

I know there are some non-profits that do debt negotiations for a minimal fee.

 

[Falloutboy]

I know there are some non-profits that do debt negotiations for a minimal fee.

from what I've heard those are mostly a sham, and just non profit in name, while they'll lower interest the effect on credit is more long standing then a bankruptcy in the first place.

 

[AznAnarchy99]

from what I've heard those are mostly a sham, and just non profit in name, while they'll lower interest the effect on credit is more long standing then a bankruptcy in the first place.

Well technically what they do is call up the credit card company and deal with them. They basically say "hey, I cant pay this anymore but I can give you $10k and lets call it even?" Bank can either agree or disagree but if they do, you'll be set on a payment plan and your debt will be considered "resolved" on your credit statement.

Technically you can even do this yourself by calling the bank yourself, but if you do find a good debt consolidation company, they might be working side by side with a law firm that may (or may not) get you a better deal in the end.

 

[HamburgerBoy]

her lifestyle is basically paying the debt and surviving. and yeah I know its not bankrupt but its also non sustainable for her. and yeah she doesn't make bank, she really had other priorities in life and big career.wasn't one of them.

Sounds like a great investment. :thumbsup:

 

[dirtboy]

If you care about her debt more than she does, you're wasting your time. Is she doing anything more about it than going to work and making her payments? Has she sought out help? Has she asked for your help?

 

[SMOGZINN]

If you care about her debt more than she does, you're wasting your time. Is she doing anything more about it than going to work and making her payments? Has she sought out help? Has she asked for your help?

Pretty much this.
If she wants out from under this debt it is going to take a lot of work. She is going to have to spend a lot of time and emotional effort dealing with the credit companies, working deals to get her interest or premium reduced. If you are consistent at it you can get something worked out, it is in their best interest to get a working payment plan in place and not have her file bankruptcy. But you have to work though the corporate bureaucracy and that takes a lot of effort.

 

[catilley1092]

I say look into Chapter 7 Bankruptcy, before the two of you gets really serious. When my wife became disabled in the early 90's, we had no choice but to do it.

It sticks with her for 10 years, but as long as one of you has good credit, no problem. Here's a good site to get info from, remember to count only HER income & expenses. Nolo has a "means test", which includes some items, whether or not she uses them.

http://www.nolo.com/legal-encyclopedia/bankruptcy/

Good Luck!

Cat

 

[LookBehindYou]

Pics of GF? That will help determine if help should be offered...

 

[ThePresence]

Make a settlement with the CC companies. They will put her on a payment plan for a lot less per month. Sure, it will harm her credit somewhat in the short term, but nowhere near the harm a bankruptcy will cause.

 

[mvbighead]

She obviously needs to do something to get the interest rate lowered.

In addition, if she's making only 20k per, she needs to find another part time job and work on finding a better long term job/career. Heck, I think a waitress in a typical restaurant could clear that easy with tips.

 

[SandEagle]

why bankruptcy? stop paying and go for a debt settlement instead

 

[JeffreyLebowski]

If her credit is totally fvcked maybe it's not worth even trying at this point. Still, $20k really isn't much money, even though it is a year salary. Maybe she can make more money at some point.

She has to options.
Stop paying the debt now, change phone numbers, and never return their calls when they find her. Wait it out 7 years to fall off her credit.
Pay everything she has into it for the next 2+ years, and wait another 7 years for all those items that are still negative hits to her credit to fall off.

Maybe this is just payback for so many women screwing men over in divorces.

 

[ShawnD1]

Make a settlement with the CC companies. They will put her on a payment plan for a lot less per month. Sure, it will harm her credit somewhat in the short term, but nowhere near the harm a bankruptcy will cause.

I don't know why people rag on bankruptcy so hard. Would you rather have bad credit or would you rather be a debt slave for the rest of your life? Negotiating the amount down as you suggest (or just saying "fuck this") is the correct answer.

OP said she's barely making the minimums. If you look at your own credit card statement, you'll notice the minimum is so low that you'll never actually pay off your credit card. Just to throw out some simple numbers, it works like this:
Interest accumulated this month is is $10
Your minimum payment is $10.000000000001 (rounded down to just $10)

If you're only making the minimum payments, you're not actually paying down the debt. You're only paying the interest on the debt and maybe a tiny fraction of a penny more. She'll end up paying $10,000 for every $1,000 of borrowed money. It's retarded. Either negotiate it down or file for bankruptcy. There's no reason not to. It's not like anyone is going to lend her more money at this point anyway, so how is bad credit going to hurt her?