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How did you get yourself out of debt?

I've got credit cards, some medical and student loans. I don't have to start paying for the student loans until after I graduate but then I'll owe a ton more just from interest..Any ideas? Credit card alone is about eight thousand (I know I got carried away, it was my parents card). I'm paying on it now but feel like i'm gong to be doing it forever.

Any ideas?

Answer Question
 
Anonymous

Asked by Anonymous at 1:07 PM on Mar. 3, 2010 in Just for Fun

Answers (13)
  • Pay the lowest one first. Then when you are done go to the next lowest one. Add on what you were paying for the other one plus that payment. So you will be addiing extra money to each one. Then the same for the next. I hope I explained that right.
    Anonymous

    Answer by Anonymous at 1:10 PM on Mar. 3, 2010

  • Buy a house and get the $8000 first time homeowner tax credit. You don't have to be debt free to buy a house and sometimes you don't need a downpayment.
    Gailll

    Answer by Gailll at 1:12 PM on Mar. 3, 2010

  • That was the stupidest suggestion I've ever seen. Why buy a house and get more into debt just to get 8000 dollars back? Gaill really? Do you think about the answers you give to people or just say the first thing that you think of?
    SaraP1989

    Answer by SaraP1989 at 1:18 PM on Mar. 3, 2010

  • DO NOT buy a house. Get OUT Of debt first! The tax credit is only in effect until April. And to not have to have a down payment, you have to have immaculate credit in today's economy. Your det to income ratio has to be like 80/20 right now. You have to have income to support a mortgage, and have to be in the same line of work for at least 2-3 years.


    I recommend a book... and a work book... "The Total Money Makeover" by Dave Ramsey. It will change your life! It is not an instant fix, will take some hard work and determination. But it will work and help you change your habits now, while you are young.

    RutterMama

    Answer by RutterMama at 1:18 PM on Mar. 3, 2010

  • I filed for bankruptcy in 2005. It was the smartest thing I ever did.
    Anonymous

    Answer by Anonymous at 1:22 PM on Mar. 3, 2010

  • oh yeah buy a house! lol no, seriously that's not a good idea.... funny but not good. but anyway, here's how i paid off my credit cards (i had one for 10,000 and a couple of smaller ones). i made a budget of my 'must haves'..... bills you must pay like utilities, food, etc. and whatever money was left over i paid on the credit card. so no new clothes or eating out for a while, but i sent payments in with every paycheck and it paid it down pretty quickly. and the other thing is to obviously stop using the credit card bc you don't want to undo all your hard work. also if you've been paying on the credit card good and no late payments you can call the credit card company and ask them to lower the interest rate. sometimes they will do it then and there and sometimes they will tell you to call back again after x amount of months of no late payments. gl
    princessbeth79

    Answer by princessbeth79 at 1:28 PM on Mar. 3, 2010

  • The "snowball" method is the best method out there. You pay off your smallest debt first. Once that is paid off, apply that payment (plus your normal payment) to your next lowest. All the while you're still paying minimum payments on EVERYTHING. As you continue to tackle your smallest debt, you'll be eating away at that debt. If your debts are in collections at all, it is a good idea to contact a reputable credit counseling company. They will negotiate with your creditors to get lower interest rates & help stop late fees from accumulating. I had to do this several years ago (got stupid while in college). I paid off almost $10,000 in debt in just over 3 years! It felt good to do the right thing & pay thing off. Never go into debt to pay off another debt (ie. buying a house!) & bankruptcy is VERY difficult now ... and a lot of times you still have to pay the debt, but your credit is ruined for years.
    charity987

    Answer by charity987 at 1:29 PM on Mar. 3, 2010

  • My son bought a house with a pool in Tucson, is out of debt, and his house payments are $320. The house across the street that is not as nice and is without a pool rents for $900. In 3 years he can rent his house for $1000+ if he wants to.

    You have to live in the house 3 years to get the tax credit, that was the rule when he bought. Some things have changed.

    To the mean "know it all'" I think it is a good idea to buy a house to get out of debt. You get $8000 free money and you can own for cheaper than renting if you get the right deal.
    Gailll

    Answer by Gailll at 1:42 PM on Mar. 3, 2010

  • What I mean by live in the house 3 years to get the tax credits is that you agree to live in the house. If you rent it or sell it you have to pay the tax credit back.
    Gailll

    Answer by Gailll at 1:44 PM on Mar. 3, 2010

  • Yes because 50000 dollars debt is so much better than 8000. If she's already filed taxes she wouldn't even get that until next year anyway!
    SaraP1989

    Answer by SaraP1989 at 1:55 PM on Mar. 3, 2010

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