I’ll keep this short and simple. I tried finding help online from previous Reddit pages but seems like they’re not helping me. Please read in full, I appreciate any help/input.
My girlfriend owes $12k in debt.
Let’s assume she’s single and needs to do this on her own.
$4.6k in one account
$4.3k in second account
$1.5k in third account
$0.8k in fourth account
$0.7k in 5th account
What’s the best way to eliminate the debt? I’ve heard of debt relief programs. I’ve heard of negotiating tactics. I’ve heard just paying it off. Wouldn’t the first two be the best options as opposed to paying it off in full? Downsides?
Now let’s assume we will one day get married. My credit is 790, no debt. High income earner, enough to provide for both of us without her ever working again. I Can qualify for a home, cars, etc on my own.
In this case, what would be the best course of action?
Bankruptcy? Debt relief? Negotiate? Or just pay it off?
Any help is appreciated, thank you!
Edit #1: Background: She accumulated debt on necessities since her father passed and her mom was unable to work. She just got back on track this past spring but is now just dealing with it. Also, respectfully, I came here for debt advice, not marriage advice. Thanks
More info required. Interest rates on the debt. Tax deductibility (if any) on the debt. Gf’s income level and expenses (monthly). Ability to change where she lives to alter rent payments. Also some info on gf’s willpower and ability to sustain reduced spending would be good. Some people just can’t do it and thus the proliferation of certain monetarily non-optimal but psychologically supportive/reinforcing methods (i.e. snowball method).
Kipp said: @Oli
Thank you. So it sounds like the repayment of the full $12k is the best option right? No negotiating?
She should negotiate as soon as she has trouble making payments. Things get tricky once the debt is moved to collections. Best course of action is to build a budget/repayment plan and stick to it. If she cannot commit, then it may be a hurdle in your marriage.
@Oli
Thanks. I’ll keep that in mind. Very unfortunate but not one to throw a relationship away for this. Well overcome it. At the end of the day it’s only $12k but since we’re not married, I don’t wanna go and pay the debt for her. I have enough saved to do so.
But at the same time, I cannot just buy her out of this. I don’t mind helping but she needs to dig herself out this.
12k and bankruptcy is an option?! Does she not have any income? Pay it off-snowball, budget, share meals/groceries etc. I would make sure a future spouse of mine also understood how they got into debt and want to observe what changes they were making before meshing finances as well.
Just pay it off, but only if you’re confident she won’t run up the balances again. Bankruptcy for $12,000 would be insane, as would dealing with a year of collection calls to try to save a few thousand.
I would go to a credit union. Take out a loan. Pay off all CCs and have 1 monthly bill. 12k is of course a lot of money but when spread out over 3-5 years, it should be very manageable to pay off. Also then all the cards will be at zero and can be closed with the exception of 1. Yes it will hurt the revolving credit but can’t go into debt again. You sound like you are also saying she won’t hurt for money once married so she will be fine.
Kipp said: @Clancy
Thank you. Also, just got word that some accounts have been sent to collections.
The $4.6k, $0.7k, and $0.8k.
Same suggestion or does it change knowing this information?
In the US it means the bank no longer owns the debt. Also a 7 year hit on her credit report. Could also lead to being sued. Not sure of your laws. It’s unfortunate especially for two being under 1k. Might be able to offer them say 75% to pay it off. Might take it. Worst case is they sue you imo. Once it becomes a legal matter, you will have no choice but to pay it all off. She’s pretty far down the road where other solutions are just not available anymore. You guys will get through it. She just needs to make the calls and try and get as good deals as possible and pay them off. When dealing with US collections sometimes you can get them to remove it from the report if that is part of the agreement which I would definitely recommend asking about.
@Clancy
I’m in California. And let me ask, I’m new to all this. If it’s a 7 year hit since it’s in collections, why not just file bankruptcy? Seems like it won’t matter? What am I missing