I recently landed a job paying 80k / year, wife also works making about 60k, I also have 45k / year military disability. I have a few credit cards that are close to being charged off, I cannot find anyone to lend me a consolidation loan (I'm not even sure that's the way to go).

We own our home, $900 monthly mortgage, 1 car payment at 850. Our bills are all covered by what we were bringing home before I got this new job, so none of the new incoming money is covering previous bills, etc. What is my best route to get out of debt and back into the green?

The credit cards were under control until Covid hit, and we took a significant cut in our income. We used the cards to put food on the table.

Before you flame me about having such a high car payment, we were in a situation where I was paying for 2 cars, but I developed epilepsy and the second car never got driven (because of the epilepsy). We traded in both cars to get into a single payment. This new payment is ~ 500 less than the two cars combined.

Total credit card debt is less than 20k between the wife and I. We want to be able to pay off the credit cards as quickly as possible, fix some of the issues in our home, and hopefully sell the house within a year.

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SpiritualQuokka t1_iy4grta wrote on November 28, 2022 at 6:04 PM

Make a budget, minimize your expenses so that you can focus on your stated priorities of paying off debt, fixing issues with your home and preparing to sell your home. Look at everything - the fact that your car payment is lower than it was does not mean it is as low as it can be. Before you commit to spending money, ask yourself - is this expense more important to me than my debt pay-off, home repair and home sale goals?

Then, apply your money as follows:

Get all debts current
Pay minimum payments on all debt to keep them current
Direct all other funds to the highest interest rate debt until paid off, then rinse and repeat with the next highest rate debt
Fund home repairs
Fund costs to sell home/move

[deleted] t1_iy4o160 wrote on November 28, 2022 at 6:51 PM

[removed]

Baby_Hippos_Swimming t1_iy6ph3x wrote on November 29, 2022 at 3:39 AM

Y'all have $185K/year salary and it's less than $20K. Just pay it off using the avalanche method.

ihateretirement OP t1_iy8pzh6 wrote on November 29, 2022 at 4:21 PM

Not sure what this means, but I just got my first paycheck today, paid off one card in full, half the balance of card #2, $500 to card 3, and $500 to card 4

Baby_Hippos_Swimming t1_iy8s4q7 wrote on November 29, 2022 at 4:36 PM

Yeah that's how that works. If you want to pay off debt you just...pay it off.

ihateretirement OP t1_iy8q808 wrote on November 29, 2022 at 4:23 PM

oh! also, the wife got paid last week, we also threw most of her paycheck at her balances. my retirement covers the "mandatory" bills, so we should be able to knock this out quickly!