I’ve completely messed up my life in the last four months. I went from having zero debt to almost 100k, and I don’t know what to do.
$38k Capital One — 28% interest
$22k Chase — 24%
$6k Chase — balance transfer until end of year
$8k Citi — balance transfer
$19k Discover — balance transfer for 12 months
I make around $125k a year, but I can’t think straight because of this. It’s always on my mind, and I’m barely sleeping.
What’s the best way to handle this? I don’t even know the minimum payments for Capital One and Chase yet since they just hit this cycle.
Should I file for bankruptcy?
Should I just pay the minimums and save whatever’s left?
Should I stop paying altogether?
I feel completely stuck, and I could really use some advice. Any guidance or encouragement would help. I’m at one of the lowest points in my life, and I don’t know where to start. Thank you.
I’ve been in a similar situation. Last year, I had $91k in credit card debt, plus some 401k loans. It was overwhelming, but I got into a debt program, and now I’m down to $59k. It’s been tough—my wife had to start working full-time for the first time in 20 years, and I picked up three jobs.
Here’s what I’d suggest:
Look into a therapist if gambling is part of the problem (there’s a whole section of this forum that might help).
Cut up the cards and don’t use them anymore. I struggle with impulse spending too, so I get it.
Create a budget. List all your bills, debts, interest rates, and minimum payments. You need to know where your money is going.
Talk to a bankruptcy lawyer (they do free consultations). Check out what options you have.
Contact a financial counselor through https://nfcc.org. They can help you figure out a plan.
Decide between bankruptcy and a debt management program. I don’t recommend debt settlement plans.
Be ready to put in the work for the next few years to get back on track.
Most importantly—don’t take on any more debt until you fix the root problem.
@Wylie
Make sure you at least consider bankruptcy too. I didn’t look into it because I was too anxious, but sometimes I wonder if it would have been a better choice.
Talk to a lawyer or financial advisor. Some might suggest bankruptcy, others might recommend debt consolidation or settlements. I went with Chapter 7 because I had no other option. But if that feels too extreme, there are other ways. The first step is talking to someone who knows what they’re doing.
Not trying to pry, but is there anything you spent the money on that you could sell or get a refund for? If it was stuff like medical bills or house repairs, maybe not, but if it was something else, maybe there’s a way to recover some of it.
@Camden
Gambling. I tried flipping accounts with prop firms to hit it big. I know I messed up. I could probably dispute some of it, but I don’t want to cheat the system. I used the services—it just didn’t work out. I can pay it back if not for the insane interest. Just trying to figure out my next step.
@Wylie
Man, that’s rough. If it was a scam, you might have a shot at chargebacks. Otherwise, I hope you can find a way out of it. Wishing you the best.
Kenan said:
I went with National Debt Relief, and it’s been good so far.
I looked into that. The forgiven debt is taxable, and people on this forum seem to warn against those programs. But I’ll check them out and see if it makes sense for me. Thanks!
Kenan said:
I went with National Debt Relief, and it’s been good so far.
How long have you been with them? And how’s it been dealing with creditors?
18 months in. They’ve settled half my debt at about 50%. I’ve paid close to $30k so far. They handle the creditors, which is good for me because I tend to avoid dealing with that stuff.
I’d look into Dave Ramsey’s plan. It helps build better financial habits so you don’t end up back in the same spot.
First, call each credit card company and tell them you can’t afford the payments. Some might work with you. I got Discover and Amex to put me in their financial hardship programs, which lowered my minimums and interest rates.
Then, start the debt snowball method. Pay off the smallest debt first, then move to the next. It keeps you motivated and speeds up the process.
I used this method to pay off $18k in 13 months while making $48k a year. It was tough, but it worked. Now I don’t have any credit cards.
@Teal
Thanks for sharing. That’s really inspiring. I think if I get out of this, I’ll keep only one card with a low limit.
I tried calling Capital One, but they wouldn’t lower my interest. Since my two biggest debts have the highest rates, I think I need to focus on those first. I still need to calculate my total minimum payments to see what’s realistic.