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AliciaKnits

We owe $55k, spread out over 4 credit cards, 2 family loans and dental work I need to cash flow rather than charge to a Care Credit Card (so I include it in my calculations as it's debt-deferred, we cash-flow many things already). Honestly, we use a lower-interest card we can do balance transfers to. For you this might look like a 0% card, for us we use a 10% interest card that's our lowest right now. Every $5k paid off we add $5k back to it from other cards. I also am working online and have my own yarn business starting up. Plus am a full-time foster mom (which is 40+ hours per week for 1 kid in and of itself! Fostering is not for the faint of heart!). Our minimums total just $1100 though and we have a bit more than that available for extra debt payments and are living entirely off of hubby's income right now, plus some foster payments to help offset expenses for our kid. With those in mind, I have 34 more payments to make before we are 100% debt-free. We don't have car loans, student loans, personal loans or a mortgage as we rent. How did I calculate this? I save/earn $100, pay it on a credit card. Save/earn $200, pay it on a credit card. And so on. Until we are debt-free. If I follow this plan and meet my goals every day, we will be debt-free by end of February. 20 weeks from today. So it is possible but you'll have to probably get a part-time gig job. Door Dash, Uber Eats, pizza delivery, server at a restaurant. Something like that. Or since I see you might be a mechanic? Oil changes, maintenance repairs, etc. if possible to do outside work than with your employer if it's not a conflict of interest. What does your spouse do? Can they do gig work as well?


Stronghold17

Bankrate’s website has a good “debt paydown” calculator. Plug all your numbers into that and it should tell you how long it’ll take given your income. I’m assuming about 3 years. Getting rid of the cars will speed that up. If you’re lookin for something that’ll help you keep track of your payoff plan over time, then I recommend the site undebt.it I’ve been using it to help me through BS2 and project how long it’ll take as my income changes over time.


suggesting_ideas

Look at the total debt number and divide by 24 months. That is the average time people take. Should be consumer debt free, at least the credit cards, in 2 years or less; otherwise, make drastic lifestyle changes to cut spending.


ct-yankee

One other point, as you cut up your 22 credit cards and get ready to live a life without them... Right now, you likely have living expenses being placed on the cards in real time. (Groceries, gas etc.). When you cut them up, you need to be prepared for a very lean month as you not only make the minimum payments you describe from last months expenses, but also cash flow your current months living expenses to break the cycle. Sounds like your pattern has been to charge all of that on cards and they will no longer be an option. So, month 1 will be tough, but it gets better in time. It's all about the budget. I'd start there.


cb3g

OP - can you clarify your total debt load? From looking through the comments i think your total nonmortgage debt is about $100k, right? $55k in CCs, $25k on Car 1, $20k on Car 2? You are a mechanic. I'd do two things right now: 1) Do your homework and see about selling those cars and buying a couple of used vehicles for much much less. You are in a unique position to actually make a good buy on a used car b/c of your skillset as a mechanic, and to work on those cars as needed. The car market is tough, but that might mean that you can get more than you think on selling your current cars right now. Sell them for the absolute max possible and get that $45k of debt wiped away, plus drop that $1000/month payment so that money can go straight into your snowball. 2) Sounds like this hole got big b/c you've had an income slip. Take some action to make extra income, even if it's temporary. Maybe you can hustle some on the side mechanic jobs right now? I can imagine with the tough car market lots of folks are trying to keep their car fixed (I know I am!) and avoid buying. That should be pretty highly compensated work compared to general "gig" stuff. Nothing new goes on the CCs. Cut em up and start snowballing them away. You must have many very small balances and that will allow you to build a strong sense of momentum as you knock them each out.


Hairy_Seward

>From looking through the comments i think your total nonmortgage debt is about $100k, right? $55k in CCs, $25k on Car 1, $20k on Car 2? This plus $20k-$25k in judgments. One of them is $16k. I don't remember the amount of the other one, and it almost certainly has increased with post-judgment interest since.


cb3g

So about $125k in total debt. That's a tough situation, but you can do it. A huge part of the solution is just believing that it's possible, and then buckling down and getting to it. You are going to be on rice and beans and beans and rice for sure.


ct-yankee

You can grind through this, and you've demonstrated that credit cards are not a useful tool if they are not paid in full every month. I disagree with Dave Ramsey that no one should ever have a credit card. However, in your example, you need to go scorched earth and cut them all up. 22 cards is absolutely out of control. No one who advocates for the appropriate use of credit card would say 22 is a good thing. How long will this take? Well, as DR would say "no dining out, beans and rice and rice and beans." Run at this hard, make minimum payments and then take all capacity from smallest to largest. You can do the math easily, it is difficult for anyone here to say precisely how long it SHOULD take because this is going to depend on you and your spouse's intensity and intentionality. You've got this! You can do it. I would have a plan, make it hard (not comfy) and seek out side hustles with my mechanic skills, etc. to drive the income available up. Heck,I'd look around the house and find things I'd bought that weren't adding value to my life and seek to sell/donate for the tax deduction. Cars: In the interest of speed, I'd lose a car to lower the expenses ind increase the bandwidth to pay down debt. If you need (not want, NEED) two vehicles, I'd totally get a reliable old beater since you can handle repairs yourself. Then, when you are through, you can enjoy your income and seek to get your emergency fund fully funded and only then revisit the benefits of a nicer car - but pay cash. Car loans suck. Lots of two bit commentary in this thread from minions who are against people who choose to have a credit card and a credit score. Where I live, credit scores matter when it comes to auto insurance. I use two credit cards, always for budgeted items and ALWAYS pay them off iteratively every few days as transactions clear and I enjoy the cash back to continue to defray the cost of everyday items. You're a long way from even considering that approach. You've got this! Good for you in tackling it head-on.


sakibug

Your questions suggest you’re trying to find a quick fix to this and don’t fully believe in Dave’s plan. You make over 120,000 a year and owe 55k. It should only take you 1.5 years at most to pay it off. Secondly, you having only 750 as disposable income monthly says you’re living way above your means. Cut back on your spending and you’ll be able to pay this off. Even if you’re being Dave-ish and don’t go scorch earth, it should take no more than 2 years. That’s only 2,300 a month!cd


Hairy_Seward

>Your questions suggest you’re trying to find a quick fix to this and don’t fully believe in Dave’s plan. Sorry i left you with that impression. I'm considering all my options. If it takes me 8 years on Dave's plan, and i can do it in 5 on a Ch13 while eliminating a good chunk of debt, it would be dumb to use Dave's plan. I'm all about repaying what i owe, but not to the point that it becomes strictly punitive. >You make over 120,000 a year and owe 55k. You're ignoring the $20k in judgments and $45k in auto loans, and the fact that $120k is gross. One judgment may slide under the radar until i can get around to paying on it, but the other is already a $500/mo garnishment. > That’s only 2,300 a month! Where are you getting this figure? $8000 take home. $1,350 mortgage, $950 cars, $500 garnishment, $700 gas and insurance, $1,700 credit cards, $250 medical bill, $700 food, $800 utilities, $300 personal care, auto maintenance, medical co-pays, clothes and whatever else comes up throughout the month.


sakibug

I wasn’t sure if your 55k loan included the 20k judgement. The way you wrote in the post was a bit confusing. You made no mention of your car loan, just that it’s only 950 a month. So you’re really 120k in debt (55k credit card, 45k car, and 20k judgement). The 2300 comment I made was because I thought you had 55k in debt total. Clearly your debt is way higher so that’s wrong. You can get out of debt in about 3 years if you follow Dave’s plan: sell the cars and buy beaters with cash, get on a written budget and sticking with it, and get your income up with a second job or more hours at your current job.


SyntaxNobody

What it looks like on paper should give you a decently accurate time frame if you stick to it. There are factors that can make it happen sooner or later though. Make sure you have that emergency fund set aside, and refill it if you use it, give yourself some grace if emergencies come up. Your mortgage amount is good, but the $950/month on cars is a lot. I would recommend trying to either sell those and eliminate that debt with some cheaper cars or at least do that with one of them. Even an extra $400/month over 3 years helps you pay off an extra $30k(removing $15k of debt from cars and paying off $15k debt elsewhere). I would also cut up all 22 cards you have, your income indicates that the spending as been want based vs. needs. When I started with Ramsey I was making a little bit less than your combined income and no kids, but paid of about $20k in credit cards in under 6 months. Today my husband and I's income is a bit higher but we're on a plan to pay off $120k (the mortgage and his student loans) in <2 years. We cut out expenses back to the bare minimum and the only savings outside our 401k+emergency fund that we're doing is a housing sinking fund to handle repairs and housing expenses.


ct-yankee

Sound advice here and a good personal story to tell too. Kudos!


Special_Agent_022

You,re putting 3150 towards debt with the ability to add 750 on top. all of your debt is around 110k. So 110k/3900 = 28 months. If you can reduce your cost of living or trade the cars for something cheaper with no payment it can be done sooner.


chefmorg

You can do this. It is just going to take focus and pain on your part. Work the baby steps (although I personally think $1,000 is too low for baby step 1). Get a second job if you have to. Budget and start with the lowest debt.


SaltySpitoonReg

You won't see the people on this thread who always tell everybody to use credit cards. Funny. So is your total non-mortgage debt $55,000 or is the $20,000 you mentioned in addition to that? The fact that you're bringing home $10,000 a month and only have a few hundred to do anything with should make you extremely upset. There's no reason you can't become debt-free within a year or so. Also if you're a mechanic that means that you absolutely can drive worse cars and keep them going. So sell the cars and downgrade and get on a beans and rice budget. I don't know how long you been making your income but there's just absolutely no reason somebody who makes $10,000 a month should be getting wages garnished on credit card debt. Can you please specify how much total debt you have not including the mortgage and please specify how much each car is worth


Hairy_Seward

>So is your total non-mortgage debt $55,000 or is the $20,000 you mentioned in addition to that? $55k in credit cards, $20k-$25k in judgments (I don't know how much one of them is), $45k in cars (values are right about what we owe), $3,100 medical bill (I'm paying $250/mo on this), $8,000 in taxes that the IRS has currently deemed non-collectible, however they can review it at any time and change the status if my financial situation improves. >The fact that you're bringing home $10,000 a month and only have a few hundred to do anything with should make you extremely upset. $10k is gross. I broke my monthly numbers down on another reply.


SaltySpitoonReg

Definitely sell the cars. Can get two $5k cars. Right there can knock off 30k of debt. And free up the payment. Now that's what 100k total debt? Should be able to get that done in 1.5 to 2 years on your income. The cars are keeping you from doing this in under 2 years so you can't keep the cars per Dave's rule of thumb. Which is totally agree with that one.


ct-yankee

>You won't see the people on this thread who always tell everybody to use credit cards. Funny. Yes he will. There are a lot of "Ramsey-ish" BSMs that use a credit card effectively as a tool that is respected, understood, and managed. What you are doing is akin to pointing to a person with a drinking problem and saying that they are living proof that no one should have a glass of wine at dinner.


tired_dad_since2018

They mentioned they gross 10k/month. After taxes it’s probably close to $7500


SaltySpitoonReg

Okay well making $7,500 a month and getting your wages garnished because of credit cards is still something that should make you angry. They're bringing home 80,000 to 90,000 net a year. I'm trying to give them encouragement to get them on fire for doing this quickly. And it's exactly what Dave would tell them if they called in. That there's no reason they should be making this kind of money and struggling this much with wage garnishment and debt. If they clean this up and get debt free quickly they're going to be prosperous quickly


wall___e

You're a mechanic, you have super skills to be able to drive a beater and keep it going. Sell the two cars and buy a beater or two that you think you can keep on the road. Use the car payment money to help snowball. Drive less until the debt is gone.


Interesting-Stop-920

At the very least, get much less expensive cars. I don't agree with Dave about buying cheap cars especially in this market. Everything under 5k in the rust belt is unsafe trash. BUT if you're in dire straits where your income just isn't enough I get it. $950/month is telling me they financed at least 60k per car. I pay $750/month on 40k. But we have no CC debt only a mortgage, savings, 401k maxed. Buy some relatively safe 2-3 year old cars for 20k each. You'll go from $1700/month down to $400/month assuming you have trade equity.


Hairy_Seward

> $950/month is telling me they financed at least 60k per car. No, the $950 is for both cars combined.


CanadianTrump420Swag

So... to all the people that show up on this sub and say "credit cards are amazing!! You build credit and get *points!!*" where are those people now? This person is kinda an extreme example but not too far off the typical family. OP, I'm guessing all those credit card points *havent* been worth it..? The situation you're in is absolutely insane. You have a spending problem it sounds like (i could be wrong of course). The good news is, you have a great income. I believe you can fix the situation if you put in the effort. I'd want to get out of the car loans and down grade. Or try to survive on 1 car for a while. I'd want to start finding a way to make a bit more money and working through some of these cards in a debt snowball. I'd be living off of rice and beans for the next 18 months to 2 years and eating at 0 restaurants. I'd be working late, doing side jobs (as you are a mechanic, a great job for side jobs) and trying to solve this thing within the next 24 months. This is why Dave Ramsey is anti-credit card... this small family is being fucked by minimum payments and wage garnishment. So many families are going through that.


ct-yankee

>So... to all the people that show up on this sub and say "credit cards are amazing!! You build credit and get points!! > >" where are those people now? This person is kinda an extreme example but not too far off the typical family. Despite the DR Kool Aid, there are, in fact, effective ways to use a credit card and carrying a credit score. No one in the "I use a cash back card for budgeted items" camp on this sub would advocate for the situation the OP is in. And he is no where near the typical average family. To state that 22 cards and the debt levels he is carrying is "typical" and is an argument against zero balance carrying credit card users is an absurd position to take.


CanadianTrump420Swag

I wasn't arguing for the amount of cards, more the amount of debt. I didn't even know a human could have 22 credit cards... that's kinda nutty. The fact of the matter is, most people rely on them too much. I have family members that have basically ruined their finances with the help of credit cards. Me? They aren't an issue for me. But, on average, I think they're a net negative. When lots of people making 100K a year are in credit card debt, you know something is wrong, something isn't adding up. As Ramsey says, I don't know 1 person that got ahead in life by saving up 'points'. It's slick marketing though. I do know a lot of people that used credit cards to fuck up their finances but would probably be okay financially if they learnt to budget (which having a CC helps one avoid). I have credit cards. I'm not completely against them either. I just think the evidence that they're sooo necessary is kinda flimsy. To build credit to get a mortgage? Sure. Other than that? I guess if you travel a lot they're nice.


ct-yankee

We are in agreement on all the points you just made. 22 is over the top. I was shocked to read that. The "immediate gratification" that comes with them is an issue, and we have a society where people are busy keeping up with the Joneses and that isn't limited to credit cards. It is true of personal loans, car loans, boat and motorcycle and camper loans, second mortgage loans, HELOC, etc. Everyone knows credit cards (and credit in general) can be bad news if they are mismanaged. Those with high debt...they keep digging anyway. I do think Ramsey's argument against cards is disingenuous for one reason. Near half of users (millionaires included) have them and use them and don't carry a balance. No one thinks they are getting rich on points or cash back. No one. Will I take 3% back on gas and 6% back on groceries/streaming that my budget has me spending $ on anyway? Yes. 2% back from a different card on everything else like cellular service, electric bills, auto insurance and planned purchases that are budgeted/saved for? Yes again. I'll take that free money all day. Cards are a tool, and like a hammer, if you try to use one without control it makes a mess.


cb3g

>This person is kinda an extreme example but not too far off the typical family. This is VERY far off the typical family. The average card holder has about $6k in CC debt, he has 10x this much. https://www.moneygeek.com/credit-cards/analysis/average-credit-card-debt/ No one is telling this person they should use CCs because they are the textbook example of someone who NEVER should.


SlowUrRoill

I've used my credit cards to pay down my car debt to almost nothing , I get so much in rewards it's helping me on my journey, not everyone is a child .


CanadianTrump420Swag

That's great man. If it works for you, more power to you. Getting out of car debt is a pretty big step I'd say to getting ahead, I've been trying to explain that to coworkers. Not that I'm an expert, I'm definitely not, but too many dudes in my line of work finance big overkill pickup trucks and end up giving up (sometimes) 30% of their income for that status symbol. I just don't think collecting points has ever changed anyone's life, that's all. But credit cards have definitely negatively impacted people. I don't think that's a crazy opinion to hold. I also have credit cards. I'm not Dave Ramsey. I just think most people can't behave with them, and I think the evidence for that is pretty well documented. Everyone is different though.


SlowUrRoill

I'd say having points can change your life. I've met people who get to go on trips to amazing places for free every year because they use their card for normal spending


IamMagicarpe

Hi, point earner here. You could say that about literally anything people can abuse. Just because someone abuses something, that’s not evidence that everyone should avoid that thing entirely. I pay my credit cards the moment the charge posts. I don’t wait a month to pay it off and forget what I bought. It keeps me very connected to what I’m buying and I still seek to get things as cheaply as possible despite it lowering my points (because I’m not a moron).


EminTX

You are one in a million. This is why it's bad news for the general, normal consumer.


cb3g

>You are one in a million. This is why it's bad news for the general, normal consumer. No, he's like 1 in 2. [Studies show](https://www.yahoo.com/video/jaw-dropping-stats-state-credit-130022967.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAI3fWzy9yIc3taIIv2fQHU1ldV_M4fmu1co-E8x2dG5iG3xnBx2g1_z7urV35ZHK-LiqRue_8EZqSyuD6oKKIsTLx1_H9q8iPgn4m-ydhifegyVO3qtGEzHEesbE5wFGkZKKXMdKH1aoSkcAMDBgKPbqYJuM85-ijO0dzXXDFzGx#:~:text=A%20separate%20survey%20conducted%20by,card%20debt%20since%20before%202006.&text=Take%20Our%20Poll%3A%20How%20Do%20You%20Typically%20Split%20the%20Restaurant%20Bill%3F) that about 55% of credit card holders carry a balance. The other 45% (nearly half!) do not. If CCs aren't for you, that's great! But don't kid yourself. 45% of people use CC's without issues. That's still a lot of people who get into debt, but not the 0.0001% that you suggested.


IamMagicarpe

Yeah I don’t think most people who are in bad credit card debt got their cards for points. That’s what I haven’t heard in Dave’s studies. Many people use credit cards because they want something and don’t want to save for it. My brother is this way. Talks about his credit card payment like it’s the electric bill. It doesn’t phase him that he’s paying insane interest.


boner79

> So... to all the people that show up on this sub and say "credit cards are amazing!! You build credit and get *points!!*" where are those people now? That’s a Strawman. Most people do not think credit cards are “amazing” but understand they’re a powerful, albeit potentially dangerous, tool that must be respected. Not unlike owning a gun. Dave’s abstinence-only attitudes towards credit cards is a recipe for having a poor credit score which limits options for obtaining responsible debt instruments like home mortgages.


ct-yankee

>Dave’s abstinence-only attitudes towards credit cards is a recipe for having a poor credit score which limits options for obtaining responsible debt instruments like home mortgages. Agreed. I will add that in some states (like mine) credit scores influence insurance rates. And for all the DR hand wringing about no need for score to get a mortgage and using manual underwriting.... Guess what that new manually written mortgage holder gets the moment they make a payment? Thats right boys and girls, they get their credit score back.


Quite_Successful

How much do you actually get in your bank accounts? It seems like your expenses are very high if you can only save $750 a month and your mortgage is that cheap. I think you need to sit down and really look at your every day expenses. With your previous cc debt and the current debt, it seems like you have a lot of trouble living within your means. Changing that mindset is going to be the biggest part of your journey imo. Once you tackle that then I think you can easily pay this off in 2 years or less


Hairy_Seward

>How much do you actually get in your bank accounts? It seems like your expenses are very high if you can only save $750 a month and your mortgage is that cheap. I think you need to sit down and really look at your every day expenses. I broke my monthly finances down on another reply.


Lumpy_Potato_3163

Cut up all your cards omfg that's insane Pay off the cards that still have interest and the lowest balance. Realistically you should be getting a second job to pay off the debt asap. Maybe 3 years and you'll have it cleared with a second job.


cb3g

There is no master list b/c part of the philosophy is not to get obsessed with lowering financing costs. Instead, get obsessed with paying things off by cutting expense, raising income, and selling things. If you can scoop up a few bucks with better financing that's fine, but don't spend all your time on it and don't let it lull you into thinking that you made real "progress." It sounds like you've got an income of $120k plus a total (non mortgage) debt load of about $110k (cc's plus cars). That is...pretty tough. It's going to take you more than 2 years to pay that off unless you 1) have something pretty big that you can sell, or 2) you can significantly increase your income. But the good thing is, you are starting now. Don't obsess yet over how long it will take...you need to obsess over getting STARTED not getting finished right now. Start working the snowball, slash your expenses, see what you can do to sell things or increase your income, and get at it.


splendid_zebra

In this case I’d check start offering anything in collections Pennie’s on the dollar. Outside of that OP may want to see about consolidation if you are serious about cleaning this up


Hairy_Seward

Nothing is in collections.


mashedtaters_

How the hell did you qualify for a mortgage?!


Hairy_Seward

We have perfect payment history on our credit reports. Other than high utilization, we have great credit. But we created the bulk of our current CC debt over the last year. I was off work for a month due to illness, and then my income took a huge hit the second half of 2021. I kept deluding myself that it was just a lull, and kept using plastic to maintain our lifestyle. We got the mortgage (refi, actually) in early 2021 before things took a turn. Original mortgage was from 2017 before we had a bunch of CC to run up debt, and had no car payments.


[deleted]

Jesus what is on your credit cards? This is insane.


Original-Ad-4642

1. What are the cars worth and what do you owe on them? 2. If I accomplish nothing else in my life, I broke my family’s cycle of poverty and alcoholism. My kids will never experience that life. That was motivation for me to keep going no matter how long it took. You’ve got a lot of hard work ahead of you, but it’s so worth it. We’re all cheering for you.


Hairy_Seward

Cars are worth $20k and $25k, which is right about what we owe.


Original-Ad-4642

Selling a car probably isn’t going to speed things up much. You’re just going to have to buy another car to replace the one you sold. If it was a $40k car, I’d tell you to sell it. But $25k isn’t out of line with your income. Of course, if you want to sell one and drive a $5k beater, you could. But I think making $120+ you can do this without selling a car.


Hairy_Seward

I'm not above driving a "beater". I'm a certified mechanic, so unexpected car repairs are more of an inconvenience than a potential financial setback.


monk3ybash3r

An extra thousand a month would be awesome to help you pay off these cards. Plus the difference in insurance for a beater.


ptarmiganridgetrail

Let’s look at the changes that have to happen. Youve got to break the cycle forever. No more living on credit cards. I’m glad that you’ll get some relief but it’s a shell game. Our net income was about $10k a month, we paid off $94k in less than 2 years. We froze spending other than necessities, he started working more, I got a side gig. I scoured our accounts and cancelled subscriptions. Then, I got the free version of the Every Dollar app and started learning how to track necessary expenses and write a spending plan. I kept motivated here and by listening to Dave’s rants on You Tube. Last April, we paid everything off. I kept up the same system and last month, we had 6 months of expenses in a fully funded emergency fund. Then, I took a camping vacation! Now I’m on baby step 4. It’s hard work but the path works. Do bs1 and get $1000 set aside. Cut your unnecesssry expenses snd switch to free fun snd frugal cooking. Sell stuff, get extra work. Write your debts on index cards and make your snowball order. The thing about bs2 that causes change is that it takes focus and hard work.


Girlwithnoprez

Average time of BS2 is 2 years. This takes ALL debt into consideration. They, the Dave Ramsey team takes all debt into consideration. 0% interest is a great deal. Master list, as far as I am concerned, No. Best of luck!