Community Chat

[missy1]

On 8/26/2014 muttmom said:

On 8/26/2014 missyw1 said: Better to file bankruptcy IMO.

The OP did not say she could not afford to make payments.

She charged frivolous things. She needs to pay back not file bankruptcy and be absolved of her overspending.

she won't make a dent in 40,000 debt with minium payments. You have bad credit either way. Start with a clean slate.

[birddrops]

On 8/26/2014 missyw1 said:

On 8/26/2014 muttmom said:

On 8/26/2014 missyw1 said: Better to file bankruptcy IMO.

The OP did not say she could not afford to make payments.

She charged frivolous things. She needs to pay back not file bankruptcy and be absolved of her overspending.

she won't make a dent in 40,000 debt with minium payments. You have bad credit either way. Start with a clean slate.

I don't agree. This is frivolous overspending, not like she incurred medical bills and is unable to pay because of health. Bankruptcy is entirely too easy in this country. Man up, work hard and pay your bills like everyone else! Why should she or anyone else get a "clean slate"? This really chaps my hide.

[muttmom]

On 8/26/2014 birddrops said:

On 8/26/2014 missyw1 said:

On 8/26/2014 muttmom said:

On 8/26/2014 missyw1 said: Better to file bankruptcy IMO.

The OP did not say she could not afford to make payments.

She charged frivolous things. She needs to pay back not file bankruptcy and be absolved of her overspending.

she won't make a dent in 40,000 debt with minium payments. You have bad credit either way. Start with a clean slate.

I don't agree. This is frivolous overspending, not like she incurred medical bills and is unable to pay because of health. Bankruptcy is entirely too easy in this country. Man up, work hard and pay your bills like everyone else! Why should she or anyone else get a "clean slate"? This really chaps my hide.

I could not agree more. She spent frivolously and now needs to pay the piper. Clean slate? Why does she deserve one?

[Sister Golden Hair]

NO, she needs to quit spending and pay off her credit cards.

Has she talked to you about this problem?

[missy1]

Yes she brought this on herself according to the op. How does her husband/so want to handle this? He is responsible to pay, if she can't. With that much debt its really almost impossible to resolve it. other than filing BK. I don't know how much the family income is. Maybe they can get a consolidation loan. I do not recommend those credit counseling places.

[muttmom]

$40,000 is a fraction of most student debt. Stop spending and get a second job. She should be able to pay it back within a few years.

[Love4cats]

On 8/26/2014 missyw1 said: Better to file bankruptcy IMO.

This person spent her way into debt and the responsible thing to do is, PAY off the debt. It would be nice if everyone who shopped their way into debt could just throw their hands up and file bankruptcy and "start with a clean slate". To do what....shop her way into debt again and go through bankruptcy again?

[------]

I still want to know how her husband, the OP's brother, feels about this.

[LaterGator]

Not enough information to even discuss this.

[Irshgrl31201]

On 8/26/2014 rhinovodka said:

I would highly recommend she buy or borrow Dave Ramsey's book The Total Money Makeover.

I agree with this. He is really great not only with ideas for how to pay off debt but also learn to spend in a way that you don't make the same mistake again which is imperative for people are in debt simply because they live beyond their means and not in debt because of medical bills or other more valid reasons. From what you have said she is 100% responsible for why she is in debt and without a real change in her thinking and how she spends her money, she will find herself in the same position.

Also, there isn't enough info in the OP to know what she can do about it. Like, does she already work and if so, how much, full or part time? If she works part time, it is time to get another job and take every single cent of that to pay off her bills. If she works full time then she needs to get a part time job and put every cent of that towards her debt.

If she is paying just the minimum payment of her CC debt that is a huge problem and if that is all she plans on paying, she will literally never get out of debt.

Dave has a lot of great ideas for getting debt free but she has to really be serious to do this because it will be difficult especially for someone who overspent like she did, living way above her means but doing it anyway knowing she couldn't pay it off.

Also Dave Ramsey has said for years to start paying off the CC's with the lowest balance first instead of the one with the highest interest rate first. Many people thought that was crazy but according to studies, that is the most successful way to stay on course for being debt free.

Many people have pointed out that it actually makes more mathematical sense tackle the debt with the highest interest rate first. But a recent study by two associate professors at Northwestern University’s Kellogg School of Management proves that getting out of debt isn’t about math—it’s about changing behavior.

<h2>Forget Logic—It Just Works</h2>

The researchers examined the records of thousands of people enrolled in a credit-card debt settlement program and found that those who used the debt snowball approach were more likely to pay off all their debt. Even folks who paid a larger portion of their debt first were not as successful at ultimately eliminating their debt as those who started by paying off a higher number of smaller balances.

It’s true, the math doesn’t make sense … but if we had been paying attention to math, we wouldn’t be in debt.

As the study found—and as Dave has said for years—quick wins change behavior. When you pay off your smaller, nagging debts, you see the benefits instantly. Those quick wins motivate you to continue the behavior. Your wins keep adding up until you reach your goal of becoming debt-free.

<h2>Make It Work for You</h2>

The debt snowball is only the second of seven Baby Steps Dave teaches in FPU. Each Baby Step is built on the same idea: Small wins with money will lead to a long-term change in your money habits. Thousands of families have used this plan to dump millions of dollars in debt and change their financial futures forever.

I would get her "The Total Money Makeover", it is just so informative.

<h1>The Seven Baby Steps</h1> <h2>Begin your journey to financial peace</h2>

New to Dave? Learn about Dave and his company.

Get out of debt the same way you learned to walk—one step at a time. Dave has taught these principles to millions via radio, books, Financial Peace University, live events and online.

Four quick ways to get started on Dave's Plan:

The Total Money Makeover Book - Dave's NY Times bestseller
Dave's Starter Pack - Two best-selling books, two DVD lessons and a starter envelope system
Online Tools - Budgeting, commercial-free mp3s, and more! Free 7-day trial to MyTotalMoneyMakeover.com.
The Getting Started Guide - A 7-part email series (one each day) on how to get a running start into Dave's plan.

Here's the process:

Baby Step 1
<h3>$1,000 to start an Emergency Fund</h3>

An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen. Learn more

Baby Step 2
<h3>Pay off all debt using the Debt Snowball</h3>

List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Learn more

Baby Step 3
<h3>3 to 6 months of expenses in savings</h3>

Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund. Learn more

Baby Step 4
<h3>Invest 15% of household income into Roth IRAs and pre-tax retirement</h3>

When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. Learn more

Baby Step 5
<h3>College funding for children</h3>

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

Baby Step 6
<h3>Pay off home early</h3>

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7
<h3>Build wealth and give!</h3>

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more

Sorry this post was so long, I just wanted to give you and idea of what this is about.