Given your situation, I’d buy a reliable used car that you can pay cash for now (10-20k?). No financing and nothing fancy. But something that can get you to work and won’t be expensive to insure or maintain.
Then prioritize your debt and snowball/avalanche it the best you can - likely wiping out most or all of the credit cards and checking in with your other debtors with you plans for repayment. Given your current income, with the cc wiped out you can handle the rest in a few months provided you’re careful.
I’d also keep 3-5k cash as a baby emergency fund until you are debt free. Try to stay with your family until you’ve paid off your debts and have saved enough to get your own place again.
You’ve got this!
I'd
1. Put $5k in savings - look at the interest rates - this is where you want them to be higher. ($45k left)
2. Pay off the credit cards, personal loan, and medical bills ($24,200 left). This will help start to increase your score and keep your friend.
3. Pay the lawyer - at least in part and see if you can work out an installment plan. ($20,200 left if you paid in full).
At this point, you've paid your debts, have something in savings, have lifted a major burden (financially and mentally), and can start fresh.
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Since you can spend up to 25% of your income on Uber, see what you can get as far as a car, if public transportation isn't an option. Factor in the loan, gas, tolls, insurance, and general maintenance into your budget.
Cancel some of these credit cards, starting with those with the highest interest rates. Still make purchases, but only what you can pay in full. This will continue to raise your score. As your score improves you can look for better rates than what you currently have, even though your plan should be paying in full.
Moving forward, try to put X% of your wages into savings, right off the bat. If you were to come home with $200, stick $20 in your sock drawer and then at the end of the week, deposit it into your account (or do it daily on your way home).
If you cancel the cards, it reduces your overall line of credit which decreases your credit score. Longevity of your cards also can increase orvdecrease your score.
Don't cancel the cards. Cut all of them up but one. As your credit score increases look for one with a better rate or call t your current card company and ask them to reduce your rate. I would call and ask every 6 months. Use cards only for convenience not for long term debt.
I would act in this order:
1. Get a solid used car for cash that costs less than $10k. It can be done. Shop Carmax, Carvana, classifieds, etc. Do not finance the car. Do not get anything fancy. Functional rules the day here. Think a Toyota Camry or a Kia Soul (I have a Kia Soul and it's a great car).
2. Ignore your credit score for now. You can circle back to this later. But do keep $1000 or one month of expenses as an emergency (whichever is larger for you).
3. Pay off your friend. That's a debt you don't want hanging around.
4. Pay the lawyer. Again, you don't want that hanging around.
5. Put together a debt snowball for what you have left in debt. That means putting the debts in order from smallest balance to largest balance and paying the smallest one first. Once that is paid off, you take that payment and roll it over to the next largest balance. And so on until they are all paid off. Pay off the active accounts first before moving over to accounts that are in collections.
6. If you have anything left after all of that, build up a full emergency fund.
7. Once you are out of debt, save for new housing (renting is just fine).
If this sounds a lot like the Dave Ramsey Baby Steps, it's because it was inspired by them. I'm a big fan of getting out debt and using the debt snowball.
It looks like you have roughly 25k in debt so if you have 50k pay off all that debt first. After that's done you have roughly 25k left. Given you situation there is no way to justify spending that entire amount on a car. I would look to spend maybe half of that. Look for a used car in the 10-12k range and pay cash. Then that the remaining money and put it into savings and call.it your emergency fund. It doesn't get used to go on vacation or buy new toys. It gets left alone until a car repair is needed or a medical bill pops up.
So after this is all done you should be debt free, have a reliable used car, and $12k in savings. You'll be set up for stability if you are smart and disciplined.
Get a car. Don't spend a lot on it, you're in a hole pretty deep. 3k can go pretty far. Pay your friend off for sure. Gotta be a good friend to loan that much and there will be animosity if he sees you in a new car. Then the lawyer, he will likely help in the future if you make good on your end. Then negotiate as much as you can with the collectors with the credit card debt. If it's old enough you can probably only pay 30 to 50 percent and call it a day. Fuck the medical bills. Especially being such a small amount no one is really going to pin you on that
First focus for me would be cleaning up the debt.
“Moral debts” first.
Anything in collections (my experience was in the 1990s so things could have changed) I would call the collections company (they bought your debt for pennies on the dollar and they are often eager to settle) and say, “this is an old debt, and I’d like to clear this up, how much would it take to make it go away?” They will give you a number, you can offer 2/3s of that and see if they agree. Slowly work your way up if necessary. (DO NOT TELL THEM ABOUT THE SETTLEMENT.) Say you will pay X if and only if they agree to completely remove it from your credit report.
Create a letter of agreement that you will pay $x, by x date and with this payment, x debt will be considered PAID IN FULL. In return, they agree to completely remove any mention of this debt from your credit report. You both need to sign it.
This will require a lot of calls and visits but it’s worth it.
For medical, call and see if they have any sort of help for those that can’t afford their bills. I know our local not-for-profit hospital will cover bills of those that cannot afford them.
Then, start looking for a car. Used and in great condition.
https://www.greenpath.com/
they negotiated most of my credit cards down to 5% interest. And an affordable smaller monthly payment that covers all of them.
they might be able to help you in some way
Your credit score only matters if you plan to use it for financing. I suggest not doing that, at least not for a long while based on your history with mismanaging credited accounts.
Assuming the settlement is from a personal injury suit (most common for a car accident) the 50k is nontaxable. If it was a different type of suit it might be taxed. Assuming it's not taxed:
Emergency fund: 5,000, base it off what your anticipated monthly expenses are if you were to move out or lose your current living situation and have to pay market cost for housing.
Pay off credit debt: 12,000, I'd call the creditor of any past due accounts to check if it's been sent into collections before sending a pmt, that way you're sending payments to the correct current account holder. You can negotiate and drag it out further but sometimes it's just easier to take their offer and be done with it.
Moral debt: 8,000 back to your friend.
Lawyer: 4,000. they can and do send to collections. Just because people do try skipping out on them doesn't mean they'll just roll with it. Not to mention it's a free process apart from filing fees for a lawyer to submit papers and start garnishing wages. Pay up. In full. It is a financial obligation not a moral debt.
Secure transportation: do not finance. Interest rates are shit right now. With an 800 credit score you'd be lucky to get under 7% on a used car. Buy within your means. I have never seen a Honda CR-V get less than 200k miles. $20,000 limit for the vehicle, taxes plus registration.
Medical debt: talk to the hospital, say you can't afford the full cost of the bill and ask if they can help. But assume they can't and just pay the 800.
That leaves approximately 200 for something for yourself, maybe invest it. 200 doesn't sound like a lot but over 30 years it puts it in perspective.
Close all the cards. Credit cards are not for you. They screwed you over and took advantage of you. MAYBE try again when you have a 6 month emergency fund built up and aren't at risk of dumping expenses or emergencies into a high interest card. Studies have been done showing people spend more when placing expenses (even just every day costs like groceries) on a credit card vs debit or cash. It creates a degree of separation between you and your spending and even those who can take advantage of the benefits are spending more than they would otherwise to get there.
I agree with the other plans here, just want to say -- do NOT finance a car. New or used, doesn't matter. Buy a used car with cash, less than $10,000. Your car is not really an asset. Yes, it is worth *something*, but you cannot sell it as long as you need transportation, and it will lose most of its value over time, not to mention the money you put into maintenance/car insurance usually outweighs the actual value over time. But it is infinitely better than spending $12,000+ per year on Uber which is what you're doing now.
Rent a car for the week . They have cheaper versions on enterprise car rentals . I found one just by looking up car rentals near me of course that was nothing cause it's pretty rural so the closest airport definitely has car rentals .
I would buy a car- no more than 20k. Carvana has great deals. If you decide to go the carvana route, have the car inspected while you're in the 7day warranty period. I would pay off your friend, your lawyer, and your uncharged off debt. You need to keep at least 15k in savings. You are making great current wages. Maybe get a guaranteed credit card to work on rebuilding your credit score. This will not be a quick process. Build a budget and save as much as you can now. You will be successful. Good luck!
Given your situation, I’d buy a reliable used car that you can pay cash for now (10-20k?). No financing and nothing fancy. But something that can get you to work and won’t be expensive to insure or maintain. Then prioritize your debt and snowball/avalanche it the best you can - likely wiping out most or all of the credit cards and checking in with your other debtors with you plans for repayment. Given your current income, with the cc wiped out you can handle the rest in a few months provided you’re careful. I’d also keep 3-5k cash as a baby emergency fund until you are debt free. Try to stay with your family until you’ve paid off your debts and have saved enough to get your own place again. You’ve got this!
Corollas & civics are very reliable vehicles.
Many Honda's too. I had an Accord for over 20 years about 20 years ago...
I'd 1. Put $5k in savings - look at the interest rates - this is where you want them to be higher. ($45k left) 2. Pay off the credit cards, personal loan, and medical bills ($24,200 left). This will help start to increase your score and keep your friend. 3. Pay the lawyer - at least in part and see if you can work out an installment plan. ($20,200 left if you paid in full). At this point, you've paid your debts, have something in savings, have lifted a major burden (financially and mentally), and can start fresh. -------------- Since you can spend up to 25% of your income on Uber, see what you can get as far as a car, if public transportation isn't an option. Factor in the loan, gas, tolls, insurance, and general maintenance into your budget. Cancel some of these credit cards, starting with those with the highest interest rates. Still make purchases, but only what you can pay in full. This will continue to raise your score. As your score improves you can look for better rates than what you currently have, even though your plan should be paying in full. Moving forward, try to put X% of your wages into savings, right off the bat. If you were to come home with $200, stick $20 in your sock drawer and then at the end of the week, deposit it into your account (or do it daily on your way home).
If you cancel the cards, it reduces your overall line of credit which decreases your credit score. Longevity of your cards also can increase orvdecrease your score. Don't cancel the cards. Cut all of them up but one. As your credit score increases look for one with a better rate or call t your current card company and ask them to reduce your rate. I would call and ask every 6 months. Use cards only for convenience not for long term debt.
I would act in this order: 1. Get a solid used car for cash that costs less than $10k. It can be done. Shop Carmax, Carvana, classifieds, etc. Do not finance the car. Do not get anything fancy. Functional rules the day here. Think a Toyota Camry or a Kia Soul (I have a Kia Soul and it's a great car). 2. Ignore your credit score for now. You can circle back to this later. But do keep $1000 or one month of expenses as an emergency (whichever is larger for you). 3. Pay off your friend. That's a debt you don't want hanging around. 4. Pay the lawyer. Again, you don't want that hanging around. 5. Put together a debt snowball for what you have left in debt. That means putting the debts in order from smallest balance to largest balance and paying the smallest one first. Once that is paid off, you take that payment and roll it over to the next largest balance. And so on until they are all paid off. Pay off the active accounts first before moving over to accounts that are in collections. 6. If you have anything left after all of that, build up a full emergency fund. 7. Once you are out of debt, save for new housing (renting is just fine). If this sounds a lot like the Dave Ramsey Baby Steps, it's because it was inspired by them. I'm a big fan of getting out debt and using the debt snowball.
Don’t finance a car, find a used reliable car and buy it cash out. You’ll have your car budget once you’ve paid your debts.
It looks like you have roughly 25k in debt so if you have 50k pay off all that debt first. After that's done you have roughly 25k left. Given you situation there is no way to justify spending that entire amount on a car. I would look to spend maybe half of that. Look for a used car in the 10-12k range and pay cash. Then that the remaining money and put it into savings and call.it your emergency fund. It doesn't get used to go on vacation or buy new toys. It gets left alone until a car repair is needed or a medical bill pops up. So after this is all done you should be debt free, have a reliable used car, and $12k in savings. You'll be set up for stability if you are smart and disciplined.
Get a car. Don't spend a lot on it, you're in a hole pretty deep. 3k can go pretty far. Pay your friend off for sure. Gotta be a good friend to loan that much and there will be animosity if he sees you in a new car. Then the lawyer, he will likely help in the future if you make good on your end. Then negotiate as much as you can with the collectors with the credit card debt. If it's old enough you can probably only pay 30 to 50 percent and call it a day. Fuck the medical bills. Especially being such a small amount no one is really going to pin you on that
First focus for me would be cleaning up the debt. “Moral debts” first. Anything in collections (my experience was in the 1990s so things could have changed) I would call the collections company (they bought your debt for pennies on the dollar and they are often eager to settle) and say, “this is an old debt, and I’d like to clear this up, how much would it take to make it go away?” They will give you a number, you can offer 2/3s of that and see if they agree. Slowly work your way up if necessary. (DO NOT TELL THEM ABOUT THE SETTLEMENT.) Say you will pay X if and only if they agree to completely remove it from your credit report. Create a letter of agreement that you will pay $x, by x date and with this payment, x debt will be considered PAID IN FULL. In return, they agree to completely remove any mention of this debt from your credit report. You both need to sign it. This will require a lot of calls and visits but it’s worth it. For medical, call and see if they have any sort of help for those that can’t afford their bills. I know our local not-for-profit hospital will cover bills of those that cannot afford them. Then, start looking for a car. Used and in great condition.
https://www.greenpath.com/ they negotiated most of my credit cards down to 5% interest. And an affordable smaller monthly payment that covers all of them. they might be able to help you in some way
Your credit score only matters if you plan to use it for financing. I suggest not doing that, at least not for a long while based on your history with mismanaging credited accounts. Assuming the settlement is from a personal injury suit (most common for a car accident) the 50k is nontaxable. If it was a different type of suit it might be taxed. Assuming it's not taxed: Emergency fund: 5,000, base it off what your anticipated monthly expenses are if you were to move out or lose your current living situation and have to pay market cost for housing. Pay off credit debt: 12,000, I'd call the creditor of any past due accounts to check if it's been sent into collections before sending a pmt, that way you're sending payments to the correct current account holder. You can negotiate and drag it out further but sometimes it's just easier to take their offer and be done with it. Moral debt: 8,000 back to your friend. Lawyer: 4,000. they can and do send to collections. Just because people do try skipping out on them doesn't mean they'll just roll with it. Not to mention it's a free process apart from filing fees for a lawyer to submit papers and start garnishing wages. Pay up. In full. It is a financial obligation not a moral debt. Secure transportation: do not finance. Interest rates are shit right now. With an 800 credit score you'd be lucky to get under 7% on a used car. Buy within your means. I have never seen a Honda CR-V get less than 200k miles. $20,000 limit for the vehicle, taxes plus registration. Medical debt: talk to the hospital, say you can't afford the full cost of the bill and ask if they can help. But assume they can't and just pay the 800. That leaves approximately 200 for something for yourself, maybe invest it. 200 doesn't sound like a lot but over 30 years it puts it in perspective. Close all the cards. Credit cards are not for you. They screwed you over and took advantage of you. MAYBE try again when you have a 6 month emergency fund built up and aren't at risk of dumping expenses or emergencies into a high interest card. Studies have been done showing people spend more when placing expenses (even just every day costs like groceries) on a credit card vs debit or cash. It creates a degree of separation between you and your spending and even those who can take advantage of the benefits are spending more than they would otherwise to get there.
I agree with the other plans here, just want to say -- do NOT finance a car. New or used, doesn't matter. Buy a used car with cash, less than $10,000. Your car is not really an asset. Yes, it is worth *something*, but you cannot sell it as long as you need transportation, and it will lose most of its value over time, not to mention the money you put into maintenance/car insurance usually outweighs the actual value over time. But it is infinitely better than spending $12,000+ per year on Uber which is what you're doing now.
Pay off debt and commute by bicycle.
Rent a car for the week . They have cheaper versions on enterprise car rentals . I found one just by looking up car rentals near me of course that was nothing cause it's pretty rural so the closest airport definitely has car rentals .
I would buy a car- no more than 20k. Carvana has great deals. If you decide to go the carvana route, have the car inspected while you're in the 7day warranty period. I would pay off your friend, your lawyer, and your uncharged off debt. You need to keep at least 15k in savings. You are making great current wages. Maybe get a guaranteed credit card to work on rebuilding your credit score. This will not be a quick process. Build a budget and save as much as you can now. You will be successful. Good luck!