You aren’t going to like what I have to say

You aren’t going to like what I have to say; but please bear with me. For $64,000 of credit card debt, paying $111 per month; you can’t get there from here. The minimum payment you offer of $111, and assuming an interest rate of 15% (which is low as the low/late payments will cause the interest rates to increase) means it would take over 50 years to payoff those credit cards.

No creditor will work with you under those circumstances; unless you only owe them a couple hundred dollars.

With a net income of only $2,000, it is hard to live, save for emergencies and try to payoff the debt you have. I don’t know what state you are in, but the minimum credit card payment required will be doubling soon (from the standard 2% up to 4%), this will occur in a gradual sweep from West to East; starting in California.

If you, or your husband, can’t increase your income soon (2nd jobs, different jobs with better pay, etc.) you have few options:

  1. sell everything you can to help pay down the debt and/or
  2. sell the house, rent or buy with lower monthly payments (not always possible, I know) OR
  3. file bankruptcy and start over

To get the credit card debt paid off in a little over 5 years, would take a minimum monthly payment of about $1,300-$1,500; over 50 years is unreasonable and I don’t see you doing it in less than 10 or 15 to be honest; and that’s too long also. I don’t even think 1 and 2 will help you much at this point; as you would also have to substantially increase your income to make any headway to making payments Creditors will accept.

If you still want to try however here is what I would suggest:

Do 1 & 2 above, plus

Look for other/supplemental jobs to increase income,

Sell your cars too if they have loans against them, get cheaper cars with no loans against them

Cut expenses to the absolute bone, if it isn’t needed for the two of you to SURVIVE, it doesn’t stay in the budget at all. No gifts, no eating out, no extras… this also means cutting your grocery bill, eating cheaper meals prepared at home, taking your lunch to work, this also means cutting down and getting less expensive toiletries, household cleaners, etc.

Negotiate with your mortgage holder to see if you can lengthen the term of the mortgage to lower the payments (do NOT take out an equity loan, or other secondary mortgage to try to pay these credit cards)

Contact your creditors and ask for a deferment; set a reasonable time for the deferment (several months to a year). I don’t hold out much hope for them granting this; but some may and that can provide a little breathing room.

You could try to work through a Credit Counseling Service but to be honest with you, I don’t think they can do anything for you either; you just don’t have enough income for the amount of debt you have.

Sometimes, you just have to bite the bullet and file bankruptcy; there is no reasonable expectation that you can pay off these debts within a reasonable time unless you can dramatically increase your income.

Now, for the next thing you need to think about… Lisa, how are you and your husband getting along? How are you two feeling about yourselves? Are you stressed, depressed, not feeling right? If you are it is to be expected under the circumstances and you really, really have to think hard about this … do you want to feel this way for the next 10, 20, 50 years? Is this how you want to live your life? If not, and I hope you understand I am not chewing you out; I am seriously concerned for your health and your marriage… please talk with a financial counselor or bankruptcy attorney now… it’s great to be able to pay off your debt but there needs to be reasonable expectations (and income) in order to do it.

fleadmin