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debt is more than income please help

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    If you can get a 0% credit card and transfer those balances then yes!!! by all means do that. I would do that before I call the CC companies to ask them to lower the minimums which they are unlikely to do anyway. It would lower your payments significantly and allow you to catch up over the course of a year while working on reducing your other spending.


      They take out 600 in taxes per 3500 gross. My Taxable status is single and exemption is 1. Im going to look into claiming more to get less taken out per month . I just don't want to take to where I owe at the end. But your right I need the money now more than later. Thats for sure. As for the credit cards, should I transfer to a fixed card with low rate or one with 0% intro period and then try to transfer again before it goes up? Im also assuming to do the one with the highest rate first.


        Originally posted by bunnyandabby View Post
        As for the credit cards, should I transfer to a fixed card with low rate or one with 0% intro period and then try to transfer again before it goes up? Im also assuming to do the one with the highest rate first.
        0% for a year if you can get it, otherwise the transfer fees would decrease the value of doing the BT in the first place. And keep transferring until you get them paid off. And yes, do the ones with the highest rate first.

        You should definitely switch your withholding to married. You need the money now.


          How can I find the best credit card offers to do a BT to them? I got one in the mail with a 0 interest for one year but then goes through the roof after that. I'm also thinking of getting two just to get all the cc dept in a lower interest.


            I have heard of listing info on that.

            Remember to stay on top of the credit card payment and pay on time as they use that as an excuse to raise the interest rate in some cases and you sure don't want late fees.

            If you mentioned a student loan that has some potential for trouble down the line - the payments are far higher than 'promised'; people have been taken advantage of with these. Research this carefully and know what you are signing before deciding on that option.

            Paychecks are now chopped into more and more before we get them. Many workers at my husbands ex place of employment dropped their 401ks as they could not afford it. Hopefully that is a temporary measure for most that can be caught up on later.

            Keep searching for more and more budget tips. This forum is great and your wife might find interesting the Tightwad Gazette (a book) as that has some info regarding children/babies and some strict cutting back.

            every little bit and effort helps!


              I don't have a ton of experience of dealing with credit card companies, but recently worked with a couple and I recommended they contact the CC companies. The companies all said they would not negotiate with them as long as they were current on their payments. They said they would have to get 3 months behind before the would negotiate. In this case, the couple had no choice but to stop paying on them as they simply did not have enough money to pay even the minimums. They had to cut off the bleeding.

              What I did was take their last 12 bank statements (this is what you need to do). Create a spreadsheet. Down the first column (Column A) list all your fixed expenses (ie. house payment, car payment, auto insurance, life insurance, health insurance, cable, Phone, electric, etc.) Don't put the credit card payments in there yet.

              In Col B, C, D, etc. list the month of the bank statement. It is important to have all 12 statements. So, if your last statement was in April, then Col B would be May 2008, then C would be June 2008, etc. until you get to April 2009, then the last column should be "BUDGET".

              Now, one bank statement at a time, enter in the fixed expenses. Don't worry about the discretionary expenses because we already know you can't afford to spend as much as you were. But if you want an eye opening experience add up all the checks/debits/withdrawals on those 12 statements and subtract your fixed expenses (after you do my exercise) to see how much you spent on discretionary expenses. Prepare to be sick!

              Once you enter the fixed expenses for the 12 months, then the next step is the most critical. In the BUDGET column I want you to go one expense at a time. Pick an amount that would have been enough to pay that expense 10 out of 12 months. This is important. Do NOT add up the 12 months and divide by 12 to get an average. You will surely fail. Do this for each of the different expense categories.

              Now total the BUDGET column. Subtract that total from your Monthly Income. Assuming you don't write a check for taxes each year and you either pay in the right amount in withholding or you get a refund each year, then take your NET paycheck after all deductions as your income for this purpose. Hopefully, you have more net income than the total BUDGET column. If not, you really need to seek professional help.

              Assuming there is some left after subtracting your Fixed expenses from your net income, divide that remainder by 52. This is how much you can afford to spend on discretionary expenses (ie. haircuts, groceries, gas for cars, clothes, etc.). Discretionary expenses are generally anything paid away from the house.

              Here comes the big question...out of that weekly amount, how much can you afford to use toward debt reduction? Whatever you determine you can afford, see if you even have enough to pay the minimums on your credit cards. If the answer is "NO" then you have to call the companies and negotiate. You can't do that until you stop paying on your credit cards.

              Not paying on credit cards will hurt your credit, but I'm one that believes that is not always a bad thing because then you won't be able to get any more debt. You don't need any more debt. If you can't pay your debts, you will have to do something and all the solutions (ie. bankruptcy, etc.) will most likely negatively affect your credit scores too.

              Assuming you have enough to pay your minimums and then sum, then you do as others have said and each month pay the minimums on all cards except the highest interest rate card. Take your debt reduction budget minus the minimums on the other cards and the result is what you send to the highest interest rate card. Do this until that card is paid off. Then, using the same budget amount, repeat the procedure with the next highest interest rate card.

              Do some projections and if it is going to take you more than 4 years to pay off the debt, then you have a very serious problem. Increasing income and reducing all unnecessary expenses will help. Get rid of cell phones, cable, satellite, and anything else. We think of cell phones as a must have, but they aren't if you are broke.

              The key to this plan is also to provide yourself with a weekly cash amount that pays for all discretionary spending. When you are out of cash, you are out of money ....for that week. Don't cheat. This is going to be a drastic change in your life, but you have no choice.

              Hope this helps.


                I just wanted to take the time and thank everyone that has helped me here. It is very appreciated. I managed to get slightly more income from work and changed my tax status which will give me more per paycheck. I also stopped my 401 k for now. My wife is working more hours after I get off so we spend less time together but that extra income really helps. The ratio is really close now which is good compared to the major deficit I had. I tried to apply for a new card to transfer the highest interest over but apparently I was made a user of some of the cards so they are on my credit now. So I was declined because of the balances being too high. Which kills me that my wife with little to no income could go out and get 4 credit cards with $25000 credit. And yet I can't get one just to do a transfer. Everyone I talk to tells me that I couldn't get a refi which would be the best thing I could get. I'm not sure whether I should waste my time trying for that or not. Hopefully I won't have to let the credit card payments go until I can negoiate. The hassel with phone calls and the bad credit for my future worries me a bit. I'm going to try to make that my last resort. I feel that I will have to come up with a way to lower my payments and interest in order for me to ever have enough extra money to pay off any of this debt. In the mean time I hope I don't need extra cash for a breakdown, repairs, or anything like that cause I'm done then.


                  debt is more than income please help Reply to Thread

                  i will suggest that go for less debt as income is low. save as much as you can.


                    I was in the same situation about two years ago. We were not at a point to increase our income, so we decreased our spending. We turned off the cable, we had Verizon Fios and were spending about $200 / month. We also decreased our budgeted amount for groceries from $300 to $150. My wife is awesome at finding deals and loves to shop. If your wife is the same way you might give her a challenge. Hand her $150 (cash) and see if she can buy groceries for the month on that.

                    I would also recommend making the credit cards wait. I know it sounds crazy but make sure the house is paid for, you have food to eat, heat to enjoy, and electric to survive.

                    I personally would cut up the credit cards. I did that and it has not hurt my credit at all, and here is why. I still pay on the credit cards and I pay the mortgage every month. My wife and I were too tempted with the credit cards so we got rid of them. Now we buy everything out of our checking account. Google "dave ramsey" you might be able to find some great information from his site.


                      Your mortgage is too high. For you to prosper you will need to downsize your mortgage.

                      You need to sell everything you do not need. This could mean jewelry as well. It is better own things and not have them own you. I would sell everything to become debtfree then build it back without debt.

                      Find extra income where ever possible.

                      Stop using your CC's. Do not ever use them again until they are paid off and you can pay in full each month.

                      Selling your house and unnecessary things will lift a massive burden off your shoulders. It will allow you to rapair quickly and build real wealth much sooner. Good luck.

                      If you are stubborn enough to keep your excessive mortgage you should look into a refi to lower the payment.


                        I sure do wish you the best of luck. It's a long process but you'll get there. Positivity is key.


                          This has been an interesting thread. I wonder how bunny and abby are making out?