conversation: User (pfdebtthrowaway2018): "I have been dreading making this post because then it's "real".  I don't even know where it all started to go so wrong.  Currently I am in ~43k in bad debt (CC's or personal loans).  I am the sole earner currently as wife just had our baby.  I am completely embarrassed that I've even let things get this bad.  It's me, wife, baby, and her 2 kids visit 50% of the time.  \n\n**Income:**\n\n37.83/hr - 40hrs/wk - paid bi-weekly ~78,686 annually\n\nChecking balance: 2506.24\n\n**Monthly Obligations:**\n\nMortgage 1817.32 (Bal 253,360.59@3.375 FHA loan amount 260k)\n\nAuto 643.79 (Bal 34,120.87@0% 53 payments left)\n\nAuto insurance 170.82\n\nWife Auto 349 lease ~10 months left\n\nWife's Insurance - 463/month\n\nAuto gas - 160\n\nElectric - 90\n\nNatural gas - 130\n\nPhone - 96.25\n\nTV/Internet - 176.33\n\nWater - 66\n\nStudent Loans - 276\n\nFood - 400\n\n**Bad Debt**\n\nSofi Personal Loan - 722.78 (Bal 26,979@14.24% 49 months on term)\n\nCC1 - 215 (Bal 9238.98@15.49%)\n\nCC2 - 239.47 (Bal 9003.89@20.49%)\n\nCC3 - 231 (Bal   @20.74%)\n\nCC4 - 104 (Bal 3824.41@19.49%)\n\nCC5 - 150 (Bal 5477.23@16.87%)\n\nCC6 - 173 (Bal 6174.39@19.99%)\n\nMonthly Total 6673.76$\n\n\nWhen I put the numbers together I honestly am not sure how I've even survived up to this point.  Everything is current as it stands today no missed payments ever and my credit score is in the mid 600's.  Wife returning to work will add daycare to this list and she makes 14/hr as a medical assistant.  Currently she's been using her tax return to pay her car and insurance which is nearly gone.   Completely ashamed of myself for recklessly letting things slide to this point and any advice is much much appreciated.\n\n\nEdit: Thanks everyone for taking their time to give ideas to a stranger.  Lots of things to consider here.  Just trying to take it all in."
  Self: "People have already given you advice re: your budget items and car expense, but I think it's key to examine what the credit cards/loan were used for, because those were "budget items" too that need to be cut. Was it stuff for your house, clothing, meals out? What was the money spent on? Examining those expenditures and cutting there will keep this from happening again once this debt is handled, otherwise it'll just come back. I've seen this time and again with people who use credit a lot -- they pay off the bills and don't quell the spending habits that caused this to occur and find themselves back in that space again later."
  Rwk27 (Rwk27): "Get rid of one car and if the wife needs a car during the day she will have to drive/drop you off at work. See if you can turn in the lease early (if turning in early means a loss, remember you are saving what looks like 4900 on insurance over 10 remaining mo).\n\nFixing your situation will need a change in lifestyle (ie not 600/mo or 350/mo Auto pmts). Is your wife aware of that? If you are afraid to admit that to her and think you or her need to be driving expensive cars, you won't be able to fix this. \n\nA thousand extra a month (plus some saving on cable/internet that you seem to have acknowledged) will get one or two of those smallest cc debts paid off quicker than you'd imagine. Once you have some breathing room, sell the flex asap and get something CHEAP AND RELIABLE (older Toyota sienna mentioned below, highly recommend). \n\nOnce the incidents are off your wife's record, you can buy a slightly less cheap (but still relatively cheap) car if she absolutely needs one.\n\nThen snowball the rest of the CCs and move on to that personal loan.\n\nLike I said above, the only way this can happen is admitting to yourself and wife that you can't afford to drive 40k new cars/350/mo leasers. "
  nee14986 (nee14986): "As a former car salesman, it’s not so easy to just drop one car and figure out the rest. Those are very nearly what I’d consider necessary payments now. If he’s got 53 payments left on a 60-84 month loan, he’s likely to be “underwater” meaning his car is actually worth less than what he owes, so he’s got negative equity there probably to the tune of anywhere from $1k to $8k, I’d be flabbergasted if that wasn’t the case and that’s assuming he didn’t roll any negative equity into his current loan. Keep in mind as well, ~$633/m is an average car payment these days. As for the lease, most companies won’t just let you turn in the lease early. They’ll either owe the remaining payments or a hefty lease termination fee or both. I wish it was easier for people to just get rid of car loans easily. I once met a guy who paid $1500/m on his truck and he owed that much for a remaining 5 years! That’s twice my rent!"
  GoldenRamoth (GoldenRamoth): "633/m on a 60\-84 month loan is normal? Dear god what kind of cars are people buying?? That's not normal. That's like a $40\-50K vehicle!  \n\n\nThat's insane unless you're comfortably wealthy!"
  CagyBasilisk (CagyBasilisk): "Cheap new vehicles are starting around 17k, and you can’t put three car seats in a sonic.  A decently optioned small SUV can easily be 35-45k, pickups get 50-60k quick, a Yukon or similar starts over 50k.  "
  Rwk27 (Rwk27): "Why would somebody in dire straights be buying or needing a new car? I'm flabbergasted that that's the assumption, he could (and needs to) get a used minivan for 10-15, due to attempting to live  above his means new cars aren't an option (and really should never be for people who aren't already very comfortable)"
  nee14986 (nee14986): "It gets really weird with credit-challenged customers. Sometimes they HAVE to go with a cheaper new car rather than a used car because the banks won’t lend on it otherwise. They may want to buy a used cheap car with a ton of miles but the banks won’t lend on that, or if they do it can be up to 21% interest (in Colorado at least). The banks would rather lend on a new car that comes with rebates and promotional APR’s than a used car if the client is really credit challenged. The thought behind that is that the bank would rather not have the consumer ever have to choose between paying for maintenance on a used car and making their car payment. They want their money dammit! New cars come with a warranty and banks love that. \n\nBut that’s sort of neither here nor there. This guy’s situation is a little different. He got into “too much car” from the get-go. However, if he is credit challenged, he’d likely face what I described above.\n\nThey should also shop around on his wife’s insurance—$490/m is a car payment in itself!"
  Rwk27 (Rwk27): "Regarding the insurance, he said in a separate comment they're in Michigan (no fault insurance is higher) but more importantly that his wife has several recent incidents (and she's leasing a new expensive car). But yes frankly for 6k a year in insurance you need to figure out a way for her not to be driving (or at least the primary insured on a vehicle) until the incidents aren't affecting ins as much "
  