Best way to handle 12k debt... what would you do?

Debt Management
1

Keeping it simple here. I’ve tried checking out advice on this forum but still stuck. My girlfriend has $12k in debt spread over multiple accounts. Here’s the breakdown:

$4.6k on one account
$4.3k on a second
$1.5k on a third
$0.8k on a fourth
$0.7k on a fifth

Should she just pay it off, go for a debt relief program, or try negotiating? What would be the best route to cut this down?

For some background, she got into this debt when she had to support her family after her father passed. She’s back on her feet now, just dealing with the debt.

Thanks for any advice on the best way to clear this!

2

Got a few questions. What’s the interest rate on these? Any chance some of it is tax deductible? Also, what’s her income like, and does she have monthly expenses she could cut? Some people do better with the snowball method for motivation.

3

What’s her overall financial situation? Does she have a steady income, any fixed expenses, or a history with debt?

4

Blake said:
What’s her overall financial situation? Does she have a steady income, any fixed expenses, or a history with debt?

She makes around $2.5k a month, with about $2k in expenses. No past bankruptcies or big debts.

5

@Zev
Alright, bankruptcy doesn’t seem necessary here.

  1. Set a tight budget to cut expenses.

  2. Focus on paying off the highest interest first.

  3. Always cover minimums.

6

Blake said:
@Zev
Alright, bankruptcy doesn’t seem necessary here.

  1. Set a tight budget to cut expenses.

  2. Focus on paying off the highest interest first.

  3. Always cover minimums.

Thanks, so paying off the $12k in full is the best call? No point in negotiating?

7

@Zev
She could try negotiating if she’s struggling, but it’s better to set a budget and stick to it. If she’s consistent, it’ll be manageable.

8

Blake said:
@Zev
She could try negotiating if she’s struggling, but it’s better to set a budget and stick to it. If she’s consistent, it’ll be manageable.

Good point. I don’t want to just pay it off for her either—she needs to feel in control of it. We’ll figure it out.

9

She’s considering bankruptcy for $12k? If she has an income, just stick to a budget and pay it down. Maybe share meals or cut some small expenses together. I’d personally want to see a partner making moves to get out of debt.

10

@Shan
She didn’t have many options before, but yeah, paying it off seems like the best move. Thanks.

11

If you’re sure she won’t just end up back in debt, just pay it off. $12k isn’t worth the hassle of collection calls or bankruptcy.

12

Noe said:
If you’re sure she won’t just end up back in debt, just pay it off. $12k isn’t worth the hassle of collection calls or bankruptcy.

Thanks for the advice.

13

If she can get a loan from a credit union, it might help. Pay off the credit cards and just have one payment. A $12k loan over a few years should be manageable.

14

Ash said:
If she can get a loan from a credit union, it might help. Pay off the credit cards and just have one payment. A $12k loan over a few years should be manageable.

Thanks for the tip! Just found out that $4.6k, $0.7k, and $0.8k have gone to collections. Does that change anything?

15

@Zev
If it’s in collections, they might take a reduced payoff. Just know it’ll hit her credit for about 7 years. Might even be able to negotiate for less than the full amount.

16

Ash said:
@Zev
If it’s in collections, they might take a reduced payoff. Just know it’ll hit her credit for about 7 years. Might even be able to negotiate for less than the full amount.

Just because it’s in collections doesn’t mean the bank sold it off.

17

@Noe
True, though usually by this stage, it’s written off.

18

Ash said:
@Noe
True, though usually by this stage, it’s written off.

About half the time, they’ll use collectors first before fully writing it off.

19

Noe said:

Ash said:
@Noe
True, though usually by this stage, it’s written off.

About half the time, they’ll use collectors first before fully writing it off.

Learning something new every day!

20

Ash said:
@Zev
If it’s in collections, they might take a reduced payoff. Just know it’ll hit her credit for about 7 years. Might even be able to negotiate for less than the full amount.

If it’s already going to hurt her credit for 7 years, why not just file for bankruptcy? Am I missing something?