$50k credit card debt and $26,000 auto loan

I’m in a tough spot financially and could use some advice on whether bankruptcy might be a viable option for me. I’ve got all my minimum payments organized and know what I need to pay each month. I get paid twice a month, on the 1st and the 15th. Here’s a breakdown of my finances:

Income:

  • $2,820 deposit on the 1st
  • $2,820 deposit on the 15th
  • Total monthly income: $5,640

1st Paycheck:

  • Rent: $1,000
  • Credit card: $203 (balance: $5,312)
  • Credit card: $180 (balance: $7,996)
  • Internet: $132
  • Credit card: $140 (balance: $4,689)
  • Car insurance: $68
  • Total expenses: $1,823
  • Leftover: $1,097

15th Paycheck:

  • Car payment: $580 (balance: $26,653)
  • Credit card: $80 (balance: $2,028)
  • Credit card: $234 (balance: $17,956, 4% interest rate)
  • Phone: $140
  • Utilities: $140
  • Credit card: $250 (balance: $8,649)
  • Credit card: $150 (balance: $5,039)
  • Total expenses: $1,624
  • Leftover: $1,246

I’m not including gas and food in this breakdown. I’m trying to figure out if bankruptcy is something I should consider or if there are other options to explore.

Making the minimum payments will cost you a lot in interest and prevent you from getting out of this debt for many years. At least half of what’s left over after taxes should be used to your credit card debt.

Consider consolidating your debts. Every month, you have $2300 left over. You shouldn’t have any trouble making ends meet with $500–750 a month and putting the rest towards your credit card. Pay down the lowest balance first, working your way up, using the snowball method.
Avoid declaring bankruptcy. You make a lot of extra money. Rethink downsizing automobiles as well. Do you own any equity in the car you currently drive?

Is the auto insurance typographical? Since you have to have full coverage on a car for which you have a loan, I would assume it would be more.

How are you utilising the “left over” funds? Get a second job, pay off your credit cards, and sell your automobile.

Consider consolidating your credit card debt with a low-interest loan. Alternatively, try the snowball method: focus on paying off your smallest balance first, then use that payment amount to tackle the next highest balance, and continue this process. Your car payment is quite high. For cell phone plans, we use Google Fi, which offers unlimited everything for three lines at $90. Our internet bill with Xfinity is $70. I filed for bankruptcy a few years ago with less credit card debt and lower income, but I managed to keep my car because it was almost paid off. My payments were $300 a month. You should be able to contribute more towards your debt. Consider cutting back on takeout and reducing subscriptions like Netflix.

To pay off credit card debt, you can also take out a personal loan. Compared to credit cards, personal loans have cheaper interest rates. You should also consider switching to a less expensive phone and internet package. It’s far too much, $272. Keep in mind that saving $100 also helps you get out of this situation.

Bankruptcy is not necessary. You must exercise some dreadful self control. You wouldn’t have a math problem; rather, you would have a money behaviour issue, which would put you straight back in debt. Give up using credit cards to spend money you don’t have. Get a beater automobile and sell that blasted car. You just made $580 a month available. Take that and use it against the other debts. What is the destination of all your money? You have a sizable amount of extra cash. Pay off debt with any savings you may have. When you have debt, you are not saving money. All of this is already known to you. Simply get started.