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Old 09-09-2011, 11:51 AM
DreainDebt DreainDebt is offline
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Join Date: Sep 2011
Posts: 1
Default 25 in debt and hating it!

I am trying to figure out the best possible way to get out of debt. I bring home 2500 a month.

Monthly expenses are as follows...
Rent:538
Car note:327
Insurance:154
Cell:120
Fuel: 200
Loan:220 (balance 1100)

I do not have any open credit cards and the debt I have consists of medical, old cc's, car loans and pay day loans.

Revolving Delinquent accounts: 1,116.00
Installments: 14,714.00
Collections: 2,141
Total Debt: 17,971.00

My APR on my car loan is 21%. I just bought my car in March 2011 and I plan to refinance it in April 2012 for a lower interest rate. I can say since I purchased my car my FICO score has gone from 486 to 508. Which is still terrible!

I made the mistake of living on cc I couldn't afford and payday loans I didn't need while I was in college bc I didn't have the ability to obtain student loans like most kids. I paid for my degree in cash and it took 1 year to find a job. So while I do not have student loans I have a 5 pay day loans totaling almost 2 grand that I juggle every two weeks and delinquent cc's. If it weren't for the pay day loans I could start paying off my debt. I am in the process of looking for a second job so I can pay of the pay day loans but that may take a while to obtain. Meanwhile, what's the best way to start knocking this debt off. I would like to be debt free by 2013.

I am moving in with my boyfriend so that will reduce fuel expenses to about 100 per month and rent to 300 per month. Also, I just turned 25 and my insurance policy will be reviewed and reduced this month.

Any and all positive feedback is appreciated!

Last edited by DreainDebt; 09-09-2011 at 11:55 AM.
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Old 09-10-2011, 04:12 PM
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DavidBibby DavidBibby is offline
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Join Date: Jun 2010
Location: Palm Bay, FL
Posts: 415
Default Re: 25 in debt and hating it!

DreainDebt,

Thank you for telling us about your situation.

With the move in with your boyfriend you will be saving about $338 dollars by reducing your fuel and rent charges.

You have to seize those dollars and put it to good use.

Now.. I'd start with the $1100 loan that you are currently paying $220 a month for. If you added the $338 to the $220.. that's $558 per month. This means that the loan can be paid off in 2 months!

Now you have $558 a month you can kill debt with.

Do you go after your payday loans first or your car?

I would try to tackle the payday loans next while you continue to make your regular car payment.

It may take you 5-6 months to kill the payday loans... but once they are gone... you can start towards the car. At that point you can be putting the $558 + the $327 car payment for a total payment of $965 a month towards the car.

I agree with you that a 2nd job is a good idea to help get the payday loan spiral under control. So I would use every penny of that 2nd job to work on those.

After the payday loan is done... I think you can probably quit the 2nd job. As your regular income should be more than adequate to pay down the rest of your existing debt by your 2013 deadline!

What are your thoughts?
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