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My husband and I are living paycheck to paycheck. I owe $ 14,000 in debt while my husband only owes $ 600. We are going to pay his off. We really want to get a house. Is there a way out of this mess and get past my mistakes from before?
Even married, you have seperate credit reports. He can apply for credit without my credit being an issue. So, please do not give me the “You Both Owe” talk.

4 Thoughts on How do I clean up my credit when I am broke?
  1. Reply
    Rick B
    February 16, 2014 at 1:46 pm

    If you are married, you don’t owe money and your husband other money. You are a couple. You both owe the money.

    Call all of them and work out a payment plan and try to get your interest lowered or stopped.

    Then, make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.

    You probably need to cut your expenses back to the bare minimum. Get rid of cable, cell phones, internet, etc. Lower your electric bill, gas bill, water bill, etc. Don’t eat at a restaurant until your debts are under control. Take a sandwich for lunch. Cancel the gym membership.

    Try to increase your income by getting a second job. If you have a car with payments, get rid of it, and buy a good dependable used car for CASH.

    Go to the library and get “The Total Money Makeover”. Read it and follow it carefully.

    Go check out Dave’s website as well. Yahoo is blocking his site again, so take out the spaces in the following:
    www. Dave ramsey. com

  2. Reply
    Nick Z
    February 16, 2014 at 2:15 pm

    There is no easy way out of indebtedness. Because it’s not just a matter of paying off your debts. It’s also a matter of paying the interest on your debts.

    You have to be ruthless in cutting your expenses and foregoing the comforts of life in order to pay off your debts. Living beyond your means is the way into indebtedness. And the way out of indebtedness is living below your means.

    Sell your car and ride a bicycle to work if you have to. But save as much money as you can. And pay off your high interest debts first.

    It’s not pleasant to live below your means. But that’s what it takes to get out of debt.

  3. Reply
    pumpkin head
    February 16, 2014 at 2:26 pm

    Depends on what youre willing to do. First thing, get rid of all unecessary spending. That include eating out, cable, pampering, brand name foods etc. Then find cheaper alternatives to the necessities. Make a budget so you know where youre money is going. Put the rest in a savings account. Dont touch it.

    Option 1: Negotiate interest, etc
    Request a reduced interest rate, removal of fees, etc. There are programs for temporary suspension of payments. These let you to skip a few payments for no extra fees, some will reduce the min payment (never use long term), and some will reduce the total balance. Do this with ALL bills so you can save the extra money.

    Option 3: Settlement
    Start with the largest debt. Save 1/2 the balance even if you have to live without. Ask the creditor for a settlement. If you owe 3000, they may offer 2500. Counter for no less than 1250. You’ll probably settle around 2000. (I got 20,000 down to 4,000, Yay!) You have 3-6 months to pay it. Stick to the settlement plan or you may have to start over from scratch. Continue saving as before. Settle the next debt.

    Option 4: Bankrupcy
    This really is a last resort, I dont even recommend it. However, this is what to expect. New laws have made it harder to be approved. The judge will get a full financial disclosure, and will oder you to pay a certain amount to certain creditors. You will also have to attend financial counceling classes. If all else fails, you will have your debts wiped clean. However, your credit will still be awful… for the next 4-7 years. You wont be able to get a mortgage or any other loan.

    Extra tip:
    To build good credit fast, ask your bank for a secured line of credit from your saved money. Make payments to creditors from it. When youre finished paying off the debt, have the bank nullify the line of credit with the saved money. Voilla, youve paid debt and established good credit history simultaneously.

    Heres what I recommend, call all your creditors and make an organized chart of what you owe, when its due, interest rate, grace period, etc.
    Cut out luxuries. Make a budget, determine how much can be saved and when youll be able to arrange your first settlement. Write it on your calendar. Stick to the plan.

    When youre debt free for two years (and making good credit) start house hunting. A few tips: good credit = good interest rates. However, you can buy into a better rate. This will save 3-15 thousand over the life of the loan. Also, make your first mortgage payment on time, then make another the following week. continue making payments at least 3 weeks early. this will reduce the accrued interest, allowing you to pay off the house in 1/3 to 1/2 the time. Double payments will pay it off within 10-15 years.

  4. Reply
    Cherry S
    February 16, 2014 at 2:37 pm

    get your debts paid the amount you can afford. then find a job that would give you income for you to sustain.

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