Debts, debts and stress, who understands this?

I am under a lot of stress at the moment. I trained to become a pilot full time approx 3 years ago and this cost me a lot of $$$. It was at the time where banks were giving away loans like candy. I applied for a credit card (being totally honest with my income or lack of) thinking I would be denied or maybe a small $500 limit. On the unlikely event they actually approved this with a 10k limit. I was about to take the limit RIGHT down when I lost all income support for my training, I couldn't work part time because my hours were anywhere from 6am - 11pm and it changed daily I tried to find casual work but no luck. My mum didn't have extra money to help me, she kept a roof over my head and fed me. It was a decision I had to make, I was 2/3 the way through my training and I either quit and got work or had to live off the credit card. I continued training.

When I finished I was in too much debt to get a flying job as they pay minimal wages and I wouldn't be able to keep up with loan repayments. So I got an office job, in the end it didn't pay much more and I regret not just sucking it up and taking a flying job and another part time job to cover bills. But it covered minimum payments (although it barely made a dent in the total).

I decided at the beginning of the year to move for my career, with the recession flying jobs are still tight. I am still working in an office but had about 8 weeks of no work and couldn't pay some payments in full, things are still a bit tight. I explained to them what happened and I agreed I would keep paying payments as normal, I missed $16 on 1 payment and they sent it to a debt collectors saying I made an agreement when I wasn't aware this would happen ( I would have borrowed $20 from my partner to cover it if I knew that would happen) and they want the whole lot paid in full. I am so stressed, I have been trying to apply for debt consolidation loans but I dont seem to be getting anywhere. Because I am not in a flying job I feel like I have made a complete mess of my life, I have been getting a bit homesick and I dont think this has been helping.

I know when I get a flying job its minimal pay for around 3 years then you get into the big money, but I can't help but feel like its way out of my reach now.

Anyone been in similar siutations? or kind words would really help at the moment.

Never, Never, Never have a credit card.  They will bring nothing but stress and bills that never end.  The interest charges will just keep going up and everytime you are late or miss a payment they will raise the percentage.  As you go through life you will realize that you cannot predict the future.  Even if you are sure you can pay these off something always happens that throws a wrench in things.  It's a very shaky economy and you can't trust it will get better.

You may have no choice but to file bankrupcy.  That isn't the end of the world, sometimes it is the only way out.  Just remember whatever you do don't ever, for any reason, get in this position again. 

I speak from experience learned a long time ago.  Don't let this drag you down just learn from this experience, do what you have to do and go on.

Good Luck

Some people can manage credit cards, shalem. 

Sounds like you are just on tough times. If being a pilot is your dream don't give up on it especially now that you have acquired the necessary skills. Credit Cards(CC) aren't a bad thing when managed properly and even then things can always come up. To address the CC issue I suggest speaking with a credit counselor and see if there is some way to work out the payment issue b4 considering bankruptcy. Without all of the info IE how many CC, how much debt, income, budget etc it's hard to say what you can do. Most of the time there is somewhere a person can cut back. 1 cup of coffee from starbucks a week 4 times a week is about $16-20, maybe bringing your lunch instead of eating out, renting a movie instead going out, etc.

BTW if possible never only pay the minimum on a CC, it's always best to pay off CCs ASAP.

Take a close look at your debt/expense/budget and see what you can cut back on. You can dig yourself out of Debt.

do you have your budget in a spreadsheet? thats step one - writing it all down and tracking it every month and planning.

In my experience (and lately I am experiencing some unforseen expenses) the way to deal with the debt is just what someone said above - start keeping track of your expenses.  I use a spreadsheet (in excel) that is easy to plug in the information and its helped me see where my money is going and where I needed to change to maximize my cash.  I have used it for a year.  If you want I can send you a blank shell and you can plug away.

I have been where you are!  I'm only just now beginning to crawl out of crushing debt, and that's only because my mortgage company is modifying my payments!

First of all, do not worry about the collectors.  They get commission for the money they collect, and there is almost no regulation on the tactics they use, so some of them can be down right hateful!  If you have the bill, and know how much you're supposed to pay, just stop answering their calls.  There's no law that says you have to let them threaten you!

Definitely find a good credit counselor in your area.  Look for a not for profit group.  There should be NO FEE for this service.  If there is, go elsewhere.  These credit counselors will negotiate with creditors on your behalf and work out a payment arrangement that you can live with.

You're not the first person to get in over their heads, and you certainly won't be the last!  Dealing with debt is a lesson we all have to learn in life (or those of us who weren't born Hiltons or Kennedys, anyway!), and it's better that you can get it squared away now, so you can start rebuilding.

I have an Excel spreadsheet made of up my monthly bills. List every bill you have, the date it's due, the amount due (fill in if changes monthly), and the check number you use to pay it and a check box to show it's paid. That's how mine is set up. Leave space for unexpected bills like doctor's appointments, etc. I put mine in order of due dates. Also, I have spaces to the side that record my monthly income (2 pay days seperately and one total) as well as total bills so I can see, side by side, how much I make vs. how much debt and how much money I have left over for gas, food, excess. It makes it REALLY easy to sit down and go, "My bills = this, my income = this, I need at least this amount to survive, what can I cut out?" Entertainment is the first to go. Netflix, cable, internet? Cut them. Extra cell phone (or nowadays, uncessary house phone) cut them. Are you in an apartment--can you move somewhere cheaper?  Once you cut the fat, look again.

People who help other people pay off debt do it like this: Pick the object you need paid off--in your case, the credit card (look at total debt, AND interest rate. I guarantee that credit card has your highest interest rate). Pay MINIMUM on everything else, and throw all your extra money at that credit card bill. (It will feel slow, but that's the only way to make progress) You may be doing this already, but that's how you pay it off. An amortization calculator (search on Google) will help you determine how long you have to pay and how much to get to your goal (it factors in interest), so there is a light at the end of the tunnel. I bet if you calculate the minumum payments against the interest rate, you'll see that your credit card will NEVER get paid off. That's how they get you, and that's how people make mistakes with credit.

Trust me, I understand the stress. I have to find new job to be able to just afford my student loans (and my husband's) once I'm done with school, and right now, the job market is not to promising. We are already on the bottom rung, and the fact that I am going to school to get out of this hole and it might not even help is EXTREMELY frustrating. I was just fuming about it last night. We make more debt to get out of debt, only to continue living the same lifestyle while just making more money and paying more bills. LOL It sucks, but we can't see the future. We all make a mistake here or there. I certainly have, especially with finances.

Focus on that one bill. You're life might be a little boring for a while, but you can dig yourself out of this hole and you won't feel like the roof is caving in on you anymore. Life is too short to always be stressed about money so get it over with so you can move on to the next step. If being a pilot is your dream, do it. Get a well-paying, if sucky, job on the side that pays well. Office jobs are not satisfying (usually). I am getting my degree in Bus. Admin. (because it's the only class offered after work in an accelerated program) and now I'm afraid I will be bored to death for the rest of my life.

That situation certainly sounds extremely stressful! Although I have never been in debt... I was never born into infinite money either. Somehow taught myself the ins and outs of how money works (or doesn't) early on - which when I read stories like yours I am sooo grateful for.

As to how to solve the problem: I agree with the posters before.

Its like calorie counting! You have to know exactly what is coming in (after taxes) and going out to see the results.

Keep track of the interest you are paying on the credit cards in addition to the final balances. That should help motivate you to pay it off. You're likely paying a LOT of interest and none of your actual purchases.

PAY MORE THAN THE MINIMUMS! Otherwise you will never ever ever get ahead.

You'll likely have to reprioritize things for a while until you aren't sinking. Which sounds stressful now - but it will be way better to be in control of your finanaces.

Thanks for all your replies. I have budgeted, cut out unneccessary things, often when we do go out my partner pays for me to make things easier for me. Its my job, the debt is too high for my pay scale currently. I have given up ballet (which I loved) to free up a little extra. I am even looking very closely into getting a 2nd job just to make ends meet and be a little more comfortable.

I talked to the debt collectors and they want it paid in full, they aren't letting me pay it off. The only option I really have at the moment is to keep trying for a consolidation loan, even then with the recession they are knuckling down and not giving them out very easily, so I am hoping some bank will give me a break and help me out with this!

A bank loan will certainly help as long as you have a fixed interest rate. I'll cross my fingers for you! :) Is there any way to do your piloting as the part-time job, perhaps?

I have tried that also just to get my hours up, I have even tried volunteering. Pilot jobs where I live are hard to get anyway, we don't have a shortage like the rest of the world, with the recession its even harder. A friends husband is also a pilot and he has passed my name onto an owner of a company, I am waiting to hear back from them. I hope I get it, at least then I will feel like I am getting somewhere!

Check out Dave Ramsey for some good tips on getting out of debt.

Credit card companies and the collection agencies they work with are scum-sucking bottom dwellers.  Send them whatever you can afford to pay and ignore their nonsense that you have to pay it off in full.  What are they going to do, sue you after you've sent them payments?  Good luck with that.

If they refuse your payment, ignore them.  Let them sue you.  Then find yourself a bankruptcy attorney.

Original Post by nardz4:

I talked to the debt collectors and they want it paid in full, they aren't letting me pay it off.

 The debt collectors are never going to tell you about repayment options.  They'd rather have the lump sum.  Please, please find a credit counseling group!  They have the leverage to work out payment plans that the debt collectors will not offer you. 

Also, please be careful of consolidation loans.  There are a lot of scammers out there, and even reputable banks are offering really awful terms to desperate customers.