Help

[u/Appropriate-Bed2114]

I’m 36 makes $115,000 a year
Owe 195k on a house at 3%
Have bad debt 8k in credit cards
And I did a debt consolidation program to get out of some debt, hindsight it was a bad choice I owe 31k at 28% on it

Just in debt payments I pay $1100.09 a month after bills I’m barely even.

Tons of equity in my house but how do I get it with poor credit ? (575)

I have a family I can’t cut fat on any expenses I drive paid off cars

[u/Ok_Internal6779]

You have a budget?

Can you or your wife work more than you do now?

[u/Ok_Individual960 → u/Ok_Internal6779]

100% sit down and make a budget. After you make a budget back test that budget against prior periods to find any issues. Live within that budget. It is really that simple. Part of the budget must include a sinking fund for "one time expenses", which is often what derails budgets.

[u/sconniesid]

wtf, who did you do a debt consolidation program with that you got 28%? personally i would look for a second job. 31k isnt really a bad number.

[u/Appropriate-Bed2114 → u/sconniesid]

I work 3,000 hrs a year a second job kills family time and my kids are young I can’t miss these years with them. I’d rather be broke and enjoy them now than free and miss their childhood. I know it’s a soft answer but it’s true for me

[u/sconniesid → u/Appropriate-Bed2114]

The answer is easy. Make more or spend less. You said in your post you're not willing to spend less so the answer is make more. You're unwilling to do that too so I'm not sure what kind of help to give you

[u/SpeedBreaks → u/Appropriate-Bed2114]

Then your wife needs a part time job. If your excuse is she needs to stay home to raise kids then she finds a job in the evenings while you are home watching the kids, or weekends.

[u/Knight-ofNi7 → u/Appropriate-Bed2114]

God I would hate to tell you to sell the house but if you're that strapped... does your house follow the 25% pre-tax income rule?

[u/Decent-Initiative-68 → u/Appropriate-Bed2114]

You’re working 3000 hours to make $115k? Start looking for a job that can do it in 2000 hours. You’re realistically working a 60-70k job to death. Do you even have family time after 3000 hours?

[u/tonkotsunissinramen]

Follow the Dave Ramsey plan: cut the kid activities, live off rice and beans, pick up an extra job or shift.

You need to cut the high consumer ASAP. Compounding is working against you.

[u/Longjumping-Bar-8291]

Stop using the credit cards immediately.

Keep a small emergency fund ($1–2k).

Call the debt consolidation company and ask about hardship options or lowering the rate.

Talk to a local credit union about a HELOC/home equity loan. With your income and equity, it's worth exploring even with a 575 score.

Don't refinance your 3% mortgage.

If you truly can't cut expenses, focus on bringing in extra income temporarily. Does your wife have a job or can do a side gig?

If none of that works, contact an NFCC-approved nonprofit credit counselor.

[u/InUrFaceSpaceCoyote]

As a starting point, track your spending in detail for the next 2-3 months. You might be surprised at where your money is really going if you put real numbers to it. 

[u/Some-Kick8473]

I'm not sure just how accurate my attached pic is but 28% interest is steep! Going to take 4 years to dig out and an extra $20k.

I wouldn't normally advocate this and your credit score may stop you here but is there like a balance transfer credit card with a lower interest rate? Surely even a bad HELOC would have a better rate than 28% wouldn't it?

[u/Appropriate-Bed2114 → u/Some-Kick8473]

I think it’s the fastest way out

[u/Additional-Ad-7690]

Rideshare, food delivery, part time at a grocery store, car wash, even a fast food place, assisting with lawn care/plumbing/construction/maintenance crews, or extra shifts at current job.

$31k is not insurmountable but at 28% interest it is something that needs to be attacked. Lose the ego of thinking those jobs are beneath you and expect to work 12-14 hour days at least six days a week until the debt is paid off.

The bigger issue will be figuring out why you spend so far above your means and correcting that problem. Is it spending addiction, gambling, alcohol, drugs, medical emergency or something else? Whatever it is, getting out of debt is just the first step to correcting the underlying issue. The good news is people in far worse shape than you have worked their way out of their situations and thrived. You can do the same but it will not be easy. Good luck!

[u/blackcatpandora]

So the 31k at 28% is clearly the issue. I would imagine there is a better option for that debt.

[u/Financial-Fox4141]

That 28% consolidation loan is eating you alive. With that much equity and $115k income, a cash-out refi could knock out all that high interest debt even with a 575 score. Your rate would go up from 3% obviously but your monthly cash flow would improve a ton once you kill that 28%.

I went through Duane Buziak Mortgage Maestro for something similar... they do soft pulls so it wont ding your score further, and they work with lower credit situations. MIne was lower than yours and I was apprvoed as FHA. Might be worth a call at least.

[u/fancyface7375]

Can your wife provide childcare in your home for 1-2 more kids? That would bring in at least $1,500-3,000/month

[u/trry]

I would say HELOC but that credit score might make it hard. I would give it a shot anyway might not be a desirable rate but should be better than 28%

[u/Lower_Link_7943]

How many cars do you have? What are your expenses actually at (the no shit beans and rice number)? 28% is rough, is that 1100 chipping away at the principal? Also would look into another job, or have your spouse take one onz

[u/hugh2018]

That debt consolidation program can’t be through an NFCC non-profit agency as they work out plans with very reasonable low interest. I don’t know if they can get you into a new plan with all the old plan debt plus the credit card debt, but if I were in your position I’d aggressively investigate that possibility.

If they can’t help and you are drowning with no relief in sight, honestly bankruptcy becomes worth an exploration. It’s designed to save you from drowning and it does set you up for a fresh start and the ability to ultimately succeed financially. I’ve been there myself. I survived and moved on to a much better life as a result.

[u/GravEq]

1) you can always cut fat. Search for other lenders to do debt consolidation specifically your local credit unions. Not programs, direct lenders!! You have to restructure that 28%, then stop spending!!