Advice needed: serious credit card debt!

[scottishmommy]

My best friend $20,000 worth of credit card debt. She only makes about $30,000 a year and can't make progress toward paying off the debt. She also has a lot of student loan debt. What are her options? Are there any debt consolidation programs that won't ruin her credit? I wish I could help her but I don't know anything about credit cards. Please point me in the right direction!

[zebra15]

Can get make more income? Sometimes more income solves the problem.

[smallmama]

The consolidation programs won't do anything she can't do herself. They might help lower the monthly payments, but that just means she ends up paying more in interest over time. For the student loans, she might be able to get on the income-based payment plan, which with her income means her loan payments will be pretty low for now (until she can get the credit cards paid off, and then she should tackle the loan debt). I would advise her to get another job or start selling off stuff to raise her income and pay as much as possible on the credit cards. And, most importantly, cut them up and resolve to not live beyond her means anymore. You can point her in the direction of Dave Ramsey for step by step help.

[scottishmommy]

Thank you so much for your help. I'm going to talk to her about your suggestions. I'm so worried I had trouble sleeping last night!

[phathui5]

You could tell her to check out www.daveramsey.com

[Denvergirlie]

I have to concur with the others as well.

Dave Ramsey's snowball method helped me overcome almost the same amount of credit card debt, along with about $9K car loan.

No, it will not be immediate, yes she will have to sacrifice and she will have to hustle to get rid of it.

For me, additional income in the form of a 2nd job, as well as slashing of monthly budget to bare bones is what I had to do to get rid of the debt.

Best of luck to her

[ILoveMyBabyBird]

first she needs a written budget, she has to know how much money is going out. Then try to find ways to cut the monthly expenses, and throw any extra money at the debt. Then try to find ways to make extra money, with a pt job, yard sales, ask for a raise etc. Lastly try to get her interest rates lowered. I know with one of our cards we closed it and they permanently lowered the rate to 10% (as long as we're not late etc), that could be an option. And is the 30K before or after taxes, HI etc? I assure you things can get paid off. My dh grosses about 86K a year, but after 401K, taxes, Health insurance we only see 56K or so, and have managed to pay off about 27K in debt in the past 20 months or so, so it can be done. I wouldn't do a debt counseling service either, there are plenty of books, websites, etc out there to education oneself on debt reduction, and they are cheap or free to use.

Here's a great FREE website I use for snowballing, tracking debt payoff:


http://www.whatsthecost.com/