Advice needed

[Lynnlee22]

Hi all. Hope everyone is gearing up for a good new year. This year I'm really hoping to dig myself out of the hole I'm in. For a little bit of background - I have chronic kidney disease and had to make the decision to leave my job in public school administration about five years ago. For the first three years, I did very well working from home as a virtual tutor and educational transcriptionist. When COVID hit, things were initially okay because students were learning from home, but soon families were having to cut all nonessential expenses which often meant me. My income was reduced by about 75% in 2020. I racked up quite a bit of credit card debt to cover living expenses with the expectation that things would improve quickly and I would be able to pay off the debt. As we now know, that simply hasn't happened. I owe about 15K across a number of different cards and a personal loan. As of now, everything is current, but I cannot continue at this rate.

 

I want to pay my creditors, but I cannot afford the current minimums. I'm considering contacting the credit card companies individually and asking about hardship plans, but I know they are often unwilling to help until you are behind.  My creditors are: Capital One, Discover, Dell, Ollo, Opportun, Credit One, Aspire, Merrick Bank, Target, PayPal, and Upstart loan. 

 

I live in South Carolina. The debt collection laws here are rather consumer friendly. I do not have the any property other than about $45,000 equity in my primary residence. I'm really trying to determine what the best course of action is. I know not paying the cards in hopes of qualifying for hardship programs involves a risk of suit, but even if there was a suit, I don't believe there's much they could take. 

 

I also know there's the option of debt consolidation, but I know that would be yet another bill that I don't need and I might be able to accomplish the same thing myself. Does anyone have any experience with this process? What is your opinion/advice? Thanks so much.

[hegemony]

Do you have a budget?

 

There are a lot of ideas on how to reduce expenses in the money management subforum.

 

15K is not a lot if you can rework your budget and go completely barebones. Hardship programs vary a lot from one issuer to another. I would wait to ask for such an accommodation until you exhaust other routes.

[Lynnlee22]

12 hours ago, hegemony said:

Do you have a budget?

 

There are a lot of ideas on how to reduce expenses in the money management subforum.

 

15K is not a lot if you can rework your budget and go completely barebones. Hardship programs vary a lot from one issuer to another. I would wait to ask for such an accommodation until you exhaust other routes.

I do.  I've cut pretty much everything I can reasonably cut.  I work from home virtually tutoring and providing educational transcription services, so I do have to have a fast, reliable internet connection and router.  That's probably the one area that I could cut more, but I'm afraid it would be detrimental to my business as slower internet really does make it difficult to stream and interact with multiple students.  

Right now, I can manage about $1400 a month and my budget looks roughly like this:

 

150  electricity

150  TV/router/WIFI/internet

 80  Cell phone/Hotspot (back up internet connection)

40  Water

100 Property tax and homeowners insurance

  50 Dentist payment

  100 Prescriptions

  55 IRS

  50 Gas

200 Groceries

 

Total Monthly:  $975

 

Credit Card/Loan Minimum Due on all accounts combined:  $605

Total Monthly Expenses: $1580 (-180)  

 

I have been juggling for a while and honestly there are times I'm not sure how I've been able to keep everything afloat and current, but I have.  I just don't see it happening anymore.  I don't live a luxury lifestyle by any means, but my health makes it impossible for me to work outside of the home especially with the current public health situation.  I don't know of any way to increase my income other than working as hard as I can with the clients I have and hoping the last few months of a slightly positive uptick continues.  

If things do pick up, it's possible I'd be able to keep things going.  Several of my accounts are structured so that they pay off in about 3 years, so even though that means the minimum payments are higher, it will not lead to perpetual debt.  Honestly, I'm just wondering at this point if anyone has had any experience getting any of these credit card companies to lower interest rates or reduce monthly payments.  It's certainly not my first choice and not something I'll enter into lightly, but I'd like to know if it's something that's even a possibility.  I'd call the companies and ask, but the last thing I want to do is tip them off that I could be defaulting soon.  Thanks for any help and advice.