sierra financial solutions? way to go?

[minnie1928]

I am looking over my cell plan now. I think I can def. cut that down.

If I had to be late on a bill which one would be the safest? I am guessing auto loan is something I should try not to be too late on. I don't know at what point they would repossess a car, but i don't want to test my limits on that. I have recently been about a month behind on it.

From your stand point am I completely screwed? I feel like my life is over. It is a real depressing feeling. I understand that it is my own fault, and I alone bear the burden, but still I like to hope for some sort of way out at some point.

If things are really that bad, then you should be canceling the phone, the gym, and Netflix. I think your parents would understand if you had to cancel the Netflix . Call to see if you are getting the best rate on your car insurance. Sell the car and get a cheaper one (with cheaper insurance?) if need be. If things are that tight, then you are going to have to do something dramatic. Keep in mind that the changes you make don't have to be permanent. Once you are out from under this debt (and having learned from your mistakes) you'll be just fine.

Would you be able to defer your rent payments to your parents in order to get some of the other things current? Explain that you would pay them back (plus interest) for the few months you need deferral. Draw up a contract if it makes everyone feel better.

[Metric6]

Since my car is an SUV, the value took a nose dive lately. The trade in value is about 10k, and I still owe 13K on it. I am half way through the 5 year loan on it.

I might be able to defer my parents rent. I haven't told them about my troubles yet so I have been trying my best to not alarm them.

[minnie1928]

Since my car is an SUV, the value took a nose dive lately. The trade in value is about 10k, and I still owe 13K on it. I am half way through the 5 year loan on it.

I might be able to defer my parents rent. I haven't told them about my troubles yet so I have been trying my best to not alarm them.

Come clean with your parents...it will probably take a great deal of the load off your mind. Right now, along with dealing with everything else, you are trying to keep them under the impression that everything is ok. Keeping up a facade like that has to be stressful on you. Come clean, maybe they will even have some ideas to help your situation.

[kork13]

If I had to be late on a bill which one would be the safest?

From your stand point am I completely screwed? I feel like my life is over. It is a real depressing feeling. I understand that it is my own fault, and I alone bear the burden, but still I like to hope for some sort of way out at some point.

I can't say anything to which is least critical to be late or underpaid on... that's risky no matter what, but others can advise you better there...

Are you in deep? ... well, yes. Too deep you can't recover? Not at all. Here are my recommendations for you, take them for what you will. This is going to take some time, but you're in a place where you CAN make it work.

From what you've said, it seems you have an average income of $3025/mo, and expenses are $2560/mo (at current levels). This means that you make $464/mo above your current expenses. This is GREAT NEWS (you aren't going further in the hole each month).

Step 1: Work with your debt holders and try to negotiate lower interest rates for your debts. You can also try to get them to decrease the monthly payment. This would stretch out your debt over a longer period of time, but free up more money each month to put toward debt reduction. It will help if you can explain to them that you're having trouble making the payments as they are, but with a lower rate and/or with a lower monthly payment, you will be able to pay everything off over time. Guarantee them that you can and will pay everything off, that it will just take some time.

Step 2: Reduce your expenses as much as you possibly can. Get creative. You can (should?) also look at selling some stuff you can't/don't use on eBay, Craigslist, or in a yardsale to give you some extra cash.

Step 3: Open (or designate) a savings account as an Emergency Fund for yourself. Look for something that will give you 2.5-4% interest on your money. You need an EF no matter what, because it provides a security backstop for you if something happens. Send $100/mo to your EF, at least until it is $1000 strong, or better. Also, ensure you keep no less than $500 in your checking account at any time--this is your buffer, and will prevent you from paying any more overdraft fees.

Step 4: Reserve enough in your accounts to pay your monthly expenses. Take ALL remaining funds you have and pay down your debts' principle balances. Focus in on one debt at a time so that you can eliminate them one by one. When one debt is totally paid off, take all of that money and now pay all of that toward your next debt.

Two options here: you either (A) pay down the lowest-balance debt first (this will lower your number of debts faster, which for alot of people can be encouraging); or (B) pay down the highest-rate debt first (this will save you money on interest charges over the long run).

Follow step four until all of your debts are gone. This will likely take up to 3 years from when you start, but remember... If you do this and stick to it, all of your debts WILL be gone, PAID IN FULL, at the end of that 3 years.

Step 5: Congratulate yourself. You are debt free! Now, you need to build up 3-6 months' worth of expenses in your EF. At your current expenses, that's $4200-$8400. That will help you make sure something like this doesn't happen again, because instead of going into debt when something happens, you will have cash available to you.

Step 6: Never let yourself get into serious debt again. Act responsibly, and this will not be a problem for you.

Good luck! You CAN dig yourself out. It's just gonna take time and dedication.

[disneysteve]

Since my car is an SUV, the value took a nose dive lately. The trade in value is about 10k, and I still owe 13K on it.

The car payment is killing you (among other things).

Sell the car for 10K. Get a loan for 3K to pay off the balance. Buy a used car for 5K (or less). That will reduce your debt from 13K to 8K, lower your payments and reduce your insurance costs.

[Metric6]

Yeah, I know the car payment is one among many large payments. The thing is is that I have kept it in excellent shape as far as maintenance. My warranty is good up to 100,000 miles and it covers virtually everything. I am half way through paying it off, it is reliable, and it gets me through the winter snow. I know I could save $$, but I feel like selling that for something that could potentially break down and not be covered by a warranty could potentially negate any money saved by getting rid of my existing car.

[kork13]

Yeah, I know the car payment is one among many large payments. The thing is is that I have kept it in excellent shape as far as maintenance. My warranty is good up to 100,000 miles and it covers virtually everything. I am half way through paying it off, it is reliable, and it gets me through the winter snow. I know I could save $$, but I feel like selling that for something that could potentially break down and not be covered by a warranty could potentially negate any money saved by getting rid of my existing car.

I'm glad you at least have a good warranty on a good car, and take care of it... So many people don't care for their cars and it's a shame. So we'll just assume you need to keep the car. What is it, just out of curiosity? How long does that model tend to last (driving it into the ground)?

You haven't given details on your car loan (date of initiation, initial amount, rate, term, current balance), so i made some assumptions... 2.5 years ago (said you're half-way through), $20k (why not?), 9% (bad credit), 5 years (normal), and $10.8k currently (through an amortization table). I understand that this may not be exactly correct, but my recommendation below is still valid even if I'm off.

Given all of that, my recommendation would be to try to refinance your loan. It might be hard to find someone who will do it for you given your current debt level, but try local credit unions or banks, online, etc. Find SOMEONE who will refinance for you. Even if you refinance for the same $10.8k @ 9% for 2.5 years, your payment will go down by about $15/mo. If you can refinance to $10.8k @ 8% for 3 years (3yr term is more common), your payment would be only about $340/mo. If you can get an even lower rate, your payment will go down even further.

Basically, you need to try to refinance your car to a lower rate if at all possible. Even a small decrease will help. Also, a slight extention on your remaining term from 2.5 years to 3 years will also reduce your payments further, without costing you significantly more interest. Doing this will give you a bit more each month that you can plow into your credit card debt. I know this isn't the best answer, but it's doable and it will help.

[Metric6]

I'm glad you at least have a good warranty on a good car, and take care of it... So many people don't care for their cars and it's a shame. So we'll just assume you need to keep the car. What is it, just out of curiosity? How long does that model tend to last (driving it into the ground)?

You haven't given details on your car loan (date of initiation, initial amount, rate, term, current balance), so i made some assumptions... 2.5 years ago (said you're half-way through), $20k (why not?), 9% (bad credit), 5 years (normal), and $10.8k currently (through an amortization table). I understand that this may not be exactly correct, but my recommendation below is still valid even if I'm off.

It is a Nissan Xterra 2006. I hope it lasts a long time, but the 2nd gens (2005-present) aren't old enough yet to really tell for sure. I know my friends dad has a 1st gen and it has close to 200,000 miles on it. All he has ever done is changed the oil and it still runs perfectly. no problems at all.

I have a 5 year loan and half of it is paid off. I still owe about 13K on it.

[albertknowles09]

sierra financial solutions? way to go?

hey dude,
it is good that you are seeming to get out from debt quickly, just plan your debt as your income and look for anymore debt.

[devid fox]

It is a Nissan Xterra 2006. I hope it lasts a long time, but the 2nd gens (2005-present) aren't old enough yet to really tell for sure. I know my friends dad has a 1st gen and it has close to 200,000 miles on it. All he has ever done is changed the oil and it still runs perfectly. no problems at all.

I have a 5 year loan and half of it is paid off. I still owe about 13K on it.

It's good that you have a good car that satisfy you I hope. You do not wish to sell the car for tackling the unwanted circumstanced you are in. I appreciate you decision. I am keen to more about the type of your lone if you don't bother.

[Radiance]

Kork13 has the right answer!
It is not a scam, but it is also not needed, you can do it on your own, I did it!
Also helped that I got a regular personal loan to consolidate debt from my credit union. That would be your step 3a!
I also dedicated every tax return and work bonus to pay off debt.