Pay off huge debts in a hurry

I used to have credit card debt, car note, rent and all other expenses. I am not one of those people that had a great paying job and I still don't. What I did was I got a second job. I know a lot of us have two jobs, but for some reason can't make ends meet. Here is my story short and sweet. I took my paycheck from my primary job and divided it up. I paid myself 20% that went into a savings account. The rest was spent on rent, utilities, monthly expenses and bills.(Including cc and car). My Paycheck from my second job was divided in half. I paid myself 50% which went straight into savings and the rest was used for credit card and car. Within a year I paid off my credit card debt which was close to 10,000 at 27% APR and my car loan on which I still had about 18,000 at 14.5% APR left. Doing this I saved myself thousands of dollars in interest, and I ended up with almost 10,000 dollars in my savings account which was a nice surprise. After I paid off my debt I quit my second job, because it had served its purpose. Now almost 6 years later I still pay myself 20% of my paycheck, but I do not have any credit card debt, and the money that I would be paying to the credit card company I put in my savings. I do still use my credit card for purchases (which is equal to the amount that I have in my checking account), but I pay it off each month in full.(just like cash, but without the interest) Doing that also helped improve my credit score, which is now at 812 which was also a shocking surprise. I hope that my story maybe can help some of you look at your finances in a different way and you can find a way out of debt.

My Wife and I had 7 credit cards between us, 2 car loans, and 3 small loans for recreational toys. I make good money and my Wife makes decent money and we both liked to spend and our credit scores were very good.

Well one accident at work for me and losing a large amount of money as a result and than my Wife's company doing a small layoff and than offering the remaining employees a 10% pay cut or they will have to do more layoffs...well everyone agreed on the 10% pay cut.

Long story short, we ended up having more money going out than was coming in. We signed up with a debt consolidation company that turned out to be a big scam. We than negotiated our debt with our 7 credit cards and paid less than owed (debt settlement). Also sold one of the toys, paid another toy off and almost have the last toy paid off. Also, paid off 1 of the car loans.

We still have our mortgage, 1 car loan and 1 loan for a recreational toy (that will be paid with in 2 Months). It took 28 Months to do this and it wasn't easy, but it wasn't as hard as someone might think either.

Most credit cards will offer you a debt settlement fairly easy, but be warned that your credit rating will be hit hard as a result. You don't need any company representing you in this either. These companies you hear on the radio and tv do the same thing you can do yourself, but they charge you. Just call your credit cards and explain your financial situation and ask them if they can do a debt settlement with you. Most will be glad to work with you rather than risk you going into bankruptcy where they won't get anything.

Cut out the extras.... movies, going out to eat, large vacations and spending money on things you "want" but don't really "need". A movie or going out to dinner once a Month is fine, but every week, not so good. Vacations are a must, but you don't need a cruise or an air plane flight to go on vacation. Find something that is relaxing that is much more inexpensive.

If you have car loans or loans for toys as we did, look at selling what you don't need. Keep in mind though as we ran into this. If selling something is going to get you far less than you owe on it, well you are stuck with it unless you have the cash to pay off the difference from the sold price to what you actually owe.

One other thing we did and perhaps I should've mentioned this first, we put all our credit cards in the shredder. We currently do not have any credit cards and have not charged anything in at least 3 years. We now live by the old saying "If you can't pay cash, you don't need it". Still don't have any significant savings to mention, but we pick a different bill to tackle every time something is paid off and slam it until it is gone and than move onto our next.

We currently have 1 more loan we want gone and than we are going to start banking the Wife's entire paycheck and living completely off mine. Our goal/plan is to have all our debt (including mortgage) gone in 10 years and have over $250k in the bank. If we don't succeed, we will be really close to it.

The first step for getting out of debt is to accept it and
take full responsibility for your situation. It does not matter how you got
there and all that counts is the willingness to get out of it and more
important learn from it.

My family lost a substantial amount of income and we found ourselves
with $170k of debt which was part private and part business. This debt was
between five CC and the first thing I did was calling each company, asking to
cancel all of my cards and tell them I have no money to pay. That was the most
relieving moment I had and step one towards dealing with the matter. The first
six months were challenging due to all the phone calls I received. I made sure
I picked up each one of them and explaining my situation and trying to discuss
a settlement. All of the companies were initially offering unsustainable
settlements like paying the debt over a period of sixty months which to me it
did not make sense. Being a slave to the CC for halve a decade was something I
did not want as a single setback such as a missing payment brings you back to
the situation you were in before.

What I ended up doing was negotiating a fixed amount which
was between 15% and 40% of the outstanding amount to be paid in three monthly installments. I did this with one CC at the time and after a year of negotiations, law suits and nasty phone conversations and letter exchanges I am debt free and paid on average 25 cents on the dollar. No law suit made it ever to the judge, no bankruptcies and all the debt in my credit reports are listed as settled.

It took me a year doing all of this by myself. Important is
don’t lose it, stay calm and in control. Your credit rating may be shot but
trust me you don’t need a high score to get by in life. We now live almost
three years on a debit card with the money we have and we are a very happy
family who has changed its lifestyle and will never go back to a financial situation
we cannot control!

Page 7 should have been the first:
You're going to have to cut back!

The economy NEEDS people to overspend and PAY OFF their debt.  That's reality.

Other than your mortgage, pay CASH/Debit Card for everything.

It's amazing what we find we DON'T need after we leave a store and the impulse to buy is gone.

Once you get out of debt, stay out and fund a 401k and Roth.

Send me anything you have left.

First U need a budget,regardless of income. Second you need discipline. And last but not

least U need commitment to your financial plan. Too many of us have the urge to keep up

with Joneses without the necessary $$$. Here comes the credit card to offset the negative

cash flow. Now we get punked. Simple math will tell U that U can't spend what U don't have

without going into debt. I retired at 47 without a mortgage,car payment or debt of any kind.

We were not rich raising 3 kids on a modest income,but we denied ourselves some of the

pleasures others enjoyed. Now during retirement we enjoy the things others can't afford.

It's really simple: "Pay me now or pay me later". NOTHING IS FREE IN LIFE MY FRIEND.