140 000 cc debt

[Trace]

Hi everyone. Need some advice. Married and we have 140 000 in lines of credit debt. All are under lower interest either special rates or fixed rates under 7%. Three children 1 grown out of the house one in University one at home. Our household income is $210 000. Gross yearly. We have a mortgage of 270 000 2.2 interest rate house is appraised at 375 000 but realistically we would prob get around 330 000 to sell in market now. We have a car husband just bought worth about 44 000 so car payment of 600 per month.
The mortgage includes 100 000( from home reno mostly.)
I had a bit of a mid life crisis 48 we both are..He bought car I got caught up in gambling. About 50 000 is accumulated gambling debt. I know very very bad stupid on my part (feel very guilty). I really want to get things turned around feeling very stressed and anxious
about all this debt. Do you think it's doable with our income to get this paid down or am I just treading water? I pay all our bills on time and we have a good credit rating. We make decent money but never have any..crazy. Needed new roof this year (line of credit) ..We have about 100 000 in rrsp for retirement that is all...The gambling thing is just so out of my nature..Opinions anyone ? Would just like to know if it's feasible to pay that amount of debt down with our current income? Thanks in advance.

[Nutria]

I don't think you mentioned how much actual CC debt you currently have.

Good news: paying down your CC debt is always doable.
Bad news: paying down that much CC debt always causes some pain.

So, both you and your husband need to ask yourselves how much pain you're willing to suffer, and when. Because of course eventually the Piper must be paid.

Thus, some pain now, or lots of misery later (like in your retirement years).

-------

First you need to know where all your money is going. Not just the big stuff, but all the:

• mocha frappuccinos,
• purchased breakfasts,
• lunches & dinners out,
• gym memberships you never use,
• cable channels you barely watch,
• over-priced cell phone plans,
• spa treatments,
• high-end makeup and pedicures,
• etc, etc ad nauseum.

It really adds up.

Make a modest monthly budget (that allows for some entertainment) and stick to it.

I'm 100% positive that you can ruthlessly slash your monthly expenses with only a modest amount of First World Discomfort, and put that towards your CC debt. (Heck, we ruthlessly slashed and barely noticed it.)

Then go for the bigger stuff: that $48K car on a 6(?) year loan. Trade that for a gently used $20K car paid by cash. Take the balance and put it against the CC.

[Trace]

Break down

Line of credit 52 000 6%
MBNA line of credit 48000 0.99 % 10 more months reverts to 19.99 after that but I will re do it back at a special rate again...account always has offers
td visa 19000 1.99 for 5 more months..reverts to 10 % but usually has offers for 1.99 for that account.
line of credit td 19000 currently 1.99 % 9 more months then reg interest rate 7.9 %.
td line for 6000 2.99 9 more months. hubby's
Visa 3000
bmo 3000
We have taken trips once per year and we like to eat out once or twice per week nothing too expensive.
We have always bought cars out right this is the 1st car loan we have had in 20 yrs its a summer car..as I said hubby mid life crisis. He drives new vehicle provided by his company. We have an older suv for winter and son to drive.
The gambling crisis I think really is what put us over the edge..My fault for sure. Everything else we charge is paid off monthly. Our house payment is 324 per week property taxes are 410 per month..We don't have over the top cell plans etc. hubbys is also paid by company Helping our child with University of course.

[Nutria]

Line of credit 52 000 6%

"Line of credit" means how much you can borrow, not how much you have borrowed.

Anyway... we rationalized a lot, too.

You won't start knocking it down until you analyze your complete spending patterns and decide what's most important to you and your husband.

Bottom line: we can advise and share what we did, but you and he have to want to take the time and effort to live within a modest budget while paying the Piper for your indiscretions.

We've done it, and so can you and your husband. But it's going to take long-term effort.

[Trace]

when I refer to line of credit that's what we owe not our limit .Line of credits and credt cards all the same thing really...ours are all unsecured debt except for car and house.
I guess what I'm asking is with our income Of 210 000 annually and our 150 000 in accumulated unsecured debt iis it possible to budget and pay this much debt off.....I look at it all and it feels impossible.
Yes sacrifices will have to be made for sure I understand ...just wondering if we reached the point of no return....Is it just too much?

[Nutria]

when I refer to line of credit that's what we owe not our limit .Line of credits and credt cards all the same thing really...

You're mistaken, but that's not relevant to this discussion.

I guess what I'm asking is with our income Of 210 000 annually and our 150 000 in accumulated unsecured debt iis it possible to budget and pay this much debt off.....I look at it all and it feels impossible.

Sure it's possible. You just need to want to. Not just now, but:

• every morning when you spend $5 on a Venti Caramel Frappuccino (it adds up!)
• every day when you see that $48k car sitting on blocks for 10 months out of the year
• next month, when you're stressed and deserve a spa day,
• in 5 months when a trip to Bermuda sure looks tantalizing.

Yes sacrifices will have to be made for sure I understand ...just wondering if we reached the point of no return....Is it just too much?

It sounds like you're talking suicide.

[GoodSteward]

Welcome to the forums Trace.

You really have only given us part of the picture to give you more definitive answers. To help it's better to know typical expenses you carry such as monthly bills, payments on that debt, and income after taxes/job retirement.

As for if you can, that really depends on you. My parents make around $65K a year and somehow have managed to slowly manage and pay down $120,000 in credit cards over many years. They are still paying it down, but also still surviving. You have a really big shovel(income), and it sounds like you already live more sensible as far as monthly expenses.

Once we have a more comprehensive list of bills vs income we can see what you can theoretically do and time to pay them off. You do not need to consider bankruptcy, that isn't an option. Finances are mostly emotional, and you need to hurt some from the choices you guys have made so you learn not to make those choices again.

[GoodSteward]

It sounds like you're talking suicide.

I think she is talking bankruptcy. I hope so anyway.

[msomnipotent]

Hi Trace. I had about half of your debt and half of your income, so I would say you can definitely dig your way out of this. It just takes time and discipline. I know most people would say to tackle the debt with the highest interest first, but I found that paying off the smaller debts first helped me more. The more accounts you juggle, the more likely it is to forget one and then the fees, interest rate increase, and hit to your credit score really add up.

Make a realistic budget. There isn't any use wasting time drawing up a strict budget if you are not going to stick to it. People have a tendency to pay too much of their debt and wind up using the cards again to make up any shorts in their budget.

[sblatner]

Check out Dave Ramsey. He is great for paying off debt. Seven baby steps.

Before the baby steps, is the gambling a thing of the past and not happening now?

The baby steps are:
1. $1000 in an emergency fund - sell stuff, cut bills, etc., to get this done gazelle intense.
2. Pay off all non mortgage debt - list in order of smallest to largest debt. Don't worry about interest rates. Start with the smallest and pay it off. Then go to the next.
3. Save your true emergency fund - he says 3-6 months expenses. I say at least 6.
4. Save 15% of your household income in retirement
5. College funding
6. Pay off home
7. Build wealth and give

This system works. If you have savings, take $1000 and put it in a separate account and don't touch it except for an emergency. Put the rest towards your debt. He says this because if you have larger savings, only having $1000 will be uncomfortable and it will make you want to get out of debt faster.

He would also say to sell the car and buy a used cheaper car (if you need to have this car - maybe you don't because your husband drives a company car). No time for mid-life crisis. Think of the future of your family!

Check out his videos. Millions of people have done this system and it works!

[disneysteve]

Welcome to the site.

Your situation is certainly not hopeless but both of you need to seriously change your mindset and approach to handling money.

1. Obviously, your gambling debt is part of the problem, but the longer you allow yourself to wallow in that guilt, the longer it will take for you to move forward. It's done. Hopefully you are no longer gambling AT ALL. You are talking as if the gambling was the biggest problem, but it only represents 1/3 of your debt. The other stuff is a much bigger problem.

2. You said, "Everything else we charge is paid off monthly." You should NOT be charging ANYTHING. If you are still using credit cards, you need to stop immediately. Lock them up or cut them up. Go to an all cash system until you clean up the debt.

3. "We have a car husband just bought worth about 44 000" Despite already being buried with debt, he went out and bought a 44,000 car. Did he really think that was a good idea? You're probably upside down on the loan, but it might be worth selling it and using your line of credit to cover any shortfall and then go out and buy a cheap used car for 5,000 or so.

4. "We have taken trips once per year and we like to eat out once or twice per week nothing too expensive." Here are the kinds of things that will prevent you from succeeding unless you change your mindset. Going out to eat costs 5-10 times as much as eating a similar meal at home. So going out to eat for 2 meals a week you are spending the same or more than it would cost you to eat home 3 meals a day for a week. As for the trips, I love to travel but if you want to attack the debt, you need to take the money that would have gone for the next couple of trips and put it toward the debt.

5. Your kids need to start contributing financially. The one in university can certainly get a part time job and start paying some of his own expenses. The one still at home might be able to do so also depending on age.

If you and your husband can agree to work on this together, you can get rid of this in a couple of years. If either or both of you can get additional work to boost your income, even better. And if one or both of the kids can start bringing in some money, you'll have this cleaned up even faster.

Please keep us posted and come back with any questions or if you just need some encouragement to keep at it.

[Trace]

More info

Thanks for the responses.
No I was certainly not referring to suicide. I know very little about Bankruptcy and settling debt but was wondering about these or other options available if it was determined the amount would be impossible to pay off.
I'm not sure what the difference is in referring to my lines of credit or credit cards. My lines of credit also have cards attached I could use at a store for purchases or I can use by taking money directly out of them. Our bank refers to them as our personal line of credit all the amounts I posted are balances owing.
Our income may be increasing considerably this year as my husband is taking another step up in his career. Nothing is written in stone yet though. So I can only count on current income. He makes much more than I.
We have a lot of expenses Household fixed.are aprox$ 5000 including utilities taxes mortgage insurance investments university (our son) car payment. Plus
Unsecured debt...52000 payment 150
48000 700
19000 222
19000 85
5800 165 These are min payment only
3500 35
3000 30
4000 85

Sad state of affairs. I've heard about snowballing etc.. after tax income current is 140 000 according to our year end.

[disneysteve]

Our income may be increasing considerably this year as my husband is taking another step up in his career. Nothing is written in stone yet though. So I can only count on current income.

If that does happen, make sure that every penny of the higher take home pay goes toward debt reduction. Don't fall into the trap of increasing spending to match the higher income. It's very easy to say, "Well, we're making more now so going out to dinner isn't a big deal" or "Let's go see that new movie. We can afford a couple of movie tickets now."

[disneysteve]

I'm not sure what the difference is in referring to my lines of credit or credit cards.

There may be some differences in the terms but otherwise they are essentially the same thing. I'm not quite sure what Nutria was getting at there. A credit card account is a line of credit.

[Nutria]

We have a lot of expenses Household fixed.are aprox$ 5000 including utilities taxes mortgage insurance investments university (our son) car payment. Plus
Unsecured debt...52000 payment 150
48000 700
19000 222
19000 85
5800 165 These are min payment only
3500 35
3000 30
4000 85

Those minimum payments add up to $1,322. Add in $5,000 household fixed expenses and that's just 54% of your monthly net income.

Sad state of affairs.

You aren't the first and won't be the last...

I've heard about snowballing etc.. after tax income current is 140 000 according to our year end.

Paying off this debt is eminently doable on your family salary. There's just no magic solution. Make a reasonable budget, stick to it, and chip away at the mass.