So I realized this week that my monthly bills are greater than my income, leaving me with no $ for food, gas, emergencies, etc.
Plus I’m going to have to stop working and go on disability pretty soon, which will further reduce my income.
I’ve currently been prioritizing rent, car insurance, and credit card bills, making sure those get paid and juggling internet, phone, electric, and gas - all are behind but nothing’s getting shut off (yet).
I don’t know what to do next. I’m considering going to a nonprofit credit counseling org, but I have no idea how to pick one or what to ask/expect.
I would love advice on possible paths or ideas - I’ve tried to whittle down my expenses as much as possible but there still just isn’t enough money to go around.
Maybe off-topic, but I’ve always thought it doesn’t make sense to think of “credit card bills” as bills in the same sense as all those other things.
Rent, car insurance, phone, gas, etc. are all things you pay for. Credit cards are things you use to pay for other things. Credit card bills aren’t really bills for credit cards; they’re bills for the things you paid for with the credit cards.
You’re about to receive a lot of advice, but the hard truth is you need to generate more income, or further reduce your expenses.
I see you’re in CA… expensive state. Is moving an option? That’s a serious question. I grew up in MA where cost of living is sky high. Moved south to the Carolinas 15 years ago where live like a king.
What’s the nature of your disability? Could you find work doing phone customer service, or something similar?
Just keep in mind: CH 7 Bankruptcy may be an option, and it is reasonably looked at as a financial tool as opposed to the mortal sin it’s played up to be. Nobody tattoos BK on your forehead or anything. I ended up doing it in like 2002 after resisting for years. It was a huge relief leaving all that debt in the courtroom. After a year or so we had a sudden family emergency and I was pleasantly surprised to find I was again eligible for an unsecured loan with decent terms. It’s like a bomb going off on your credit report, but it’s hardly as crippling as being unable to buy necessities.
Cut the credit companies loose first. As you start to fall behind, they become increasingly like sharks competing with each other to take bigger bites out of your wallet while it’s still available. Then they wander off when there’s nothing left of you. They don’t love you, and you’ve already gotten what you need from them. Show them the same sort of mercy you can expect from them. None. Maybe not even BK, just stop paying them and see what happens. Shaking their tiny fists at you, and talking nasty about you to each other, is about all they can do about it.
Oh, that’s bad. Get what you NEED first. Food, utilities and meds. Will you qualify for Medicade? The CC company will hate you if you don’t pay, but damned if I would worry about it. Any family able to help out? I am sorry for you.
Stuntman Mike:
She has Stage 4 colon cancer, see her thread (which unfortunately she hasn’t updated in quite a while):
OP: you might ask for specific advice (giving all the details of your income and expenses in a support group devoted to that–or perhaps here), such as
You might do things like switch your car insurance to liability only if you have a fairly old car, or switch to a cheaper cell phone provider (an MVNO Straight Talk for example), drop cable TV and use Netflix, buy clothes just from thrift shops, for grocery shopping switch to Aldi’s or other discount grocery stores, no longer eat out…
Since you are a long term regular here you should certainly be eligible to have a financial assistance request thread–contact the Mods. Set up a GoFundMe.
In case anyone didn’t catch it the bad news is not primarily that Maggie has financial problems; instead it is that she is going on disability–meaning her stage 4 colon cancer is worse.
Prayers and best wishes for your situation and hopefully all will turn out well.
Call and try to get a lower interest rate or special transfer offers on your credit cards, explaining your situation. You may have to agree to stop using the card(s) during this special rate period, but it will give you some relief on monthly payments.
I used a credit counseling years ago to clear my $28,000 CC debt. It took 4 1/2 years @ ~$500/month to clear it and my credit rating was trashed, but it felt good to be done with it.
My credit rating was already done for because some my cards were sent to the collectors and all but one were severely (>90 days) overdue, but using a service pushed it down further and it takes up to seven years for the credit rating to recover. This is because credit counseling services buy out your credit card dept for pennies on the dollar for the outstanding amounts. Their ‘fees’ are hidden in the difference between what they paid for the acquired debt and your monthly payments.
Your credit card debt doesn’t have to have been sent to the collectors, but typically has to be severely (>90 days overdue, which already trashes your credit score). Also, you’ll have to agree to close all your credit card accounts (they agree keep one card open for emergencies) and because of your lowered credit score will have a hard time getting new ones.
The good news is that inquiring is usually free and during your first call, they’ll ask for your monthly income and expenses and they’ll work out a budget for you.
How much do you use your car? Could you sell it, pocket some money, and lose the insurance payments completely? For groceries you could uses a delivery app. And Lyft/Uber for absolutely necessary travel like going to see the doctor…although maybe there’s a cheap/free medical transit option too.
However, for delivery apps and ride services you’ll need a credit card, and one you can clear every month. If you are running balances you are almost certainly paying too much in interest, so try a credit union for a consolidation loan, though your income might not qualify you.
Call the electric and gas companies and explain your situation. Utilities have programs for people with medical issues, especially if low income.
Some people will howl at this, but you know those zero-balance cash advances credit cards will offer you? Those are a possibility too. You’re upping your total indebtedness because of transfer fees, but it may help you kick the can down the road if you’re squeezed for money right now. Note that you’ll still have to make a payment every month and you’ll still need a second credit card for ordinary expenses.
Same caveat with selling the car. Perhaps in X months there’s a point where selling it will turn out to be a losing proposition, but meantime maybe you’ve bought a little breathing room.
If there’s work you could do online or by email, let us know. Maybe one of us could hire you for something, or put you in touch with someone who could.
I’m sorry about your health and hope the advice others have given helps.
One small point - credit cards charge around 25% interest, so are an expensive way to borrow money.
Bank loans, bank overdrafts and credit unions are all much cheaper.
Check out fiveer.com to get ideas of what others are doing from home. All services start at $5 and increase in increments of $5 for additional work. I’ve used several translators from fiveer (totaling a couple hundred dollars of work) and am really happy with the results.
You might also think about offering things on ebay or Etsy. You may be able to sell off things you have or able to get or make cheap. Just be aware that asking prices usually aren’t what the actual sold prices.
It will take you a while to become an established/preferred seller on any of these sites, but if you focus on something you have an interest in, it will seem like less work.
Most credit cards are unsecured and I believe are very low on the collection list in a bankruptcy or other legal actions. They’ll probably probably sell off your debt to a collector before taking you to court (likely small claims). After all, unless you’re paying off your entire balance every month, the interest is coming off the top of your monthly payment, since the minimum payment is almost all interest.
That said, if you’re concerned about maintaining your credit rating (which you should be), paying your credit card bills (even if it’s the minimum) is important. Late (>30 days past due) credit card payments make a big hit on your credit scores (counting for as much as 30% of your score on some).
From my experience, until your CC debt is sold off to a collection agency, the CC company won’t harass you. Once it goes to collection though, the calls will start. They probably won’t sent any emails or letters because they don’t want documented proof of what they tell you (which can be very harassing). The last call I got from one of the collectors threatened to take me to court if I didn’t pay off debt in full immediately. When I said that the best I could do was pay $50-100 that month, she hung up on me. Thankfully, the caller before her was really nice and suggested I look into debt consolidation / credit counseling and after the next call I did just that.
With that in mind, prioritizing credit card debt is lunacy. Unless a credit card is essential for some specific use, there’s no way it should come before gas and electricity let alone food.