Throwaway account because I am absolutely horrified that I have gotten to this position. I am only 26 and while I could whine about how life has sucked I have ultimately made incredibly poor financial decisions where I now owe about $26,000 in personal debt (credit cards, loans, etc) and now just completed my taxes and owe another $10,000. I was forcibly switched to a 1099 position and did not take out my own taxes correctly or pay them properly. I have no idea where to go from here or how to even tackle this debt. The worst part is I was let go from the job after putting in my 2 weeks and the build up to making a livable income at my new job has only just become which resulted in 4 months of making sub $1000 a month. I currently am working four jobs, (I work 7 days a week doing several remote jobs) that now bring in about $2000 every two weeks starting this month.
I feel so overwhlemed and I want to fix it. I work hard, I want to be stable, and I understand that I have made errors. Does anyone have recommendations on how I could proceed or changes I could make to address this?
I am drowning in debt and don't know what to do
byu/LoanThis4108 inpersonalfinance
Posted by LoanThis4108
12 Comments
IRS repayment plan.
Hard to help on the rest without your full budget.
You can post your budget, income and debts with interest rate and minimum payment amts.
With such a vague description, all anyone can tell you is earn more, spend less, throw more at debt. It’s not such a a huge amount but we don’t know what your expenses are.
You cannot legally be “forcibly switched” to a 1099. That is your employer doing tax fraud.
https://www.usa.gov/job-misclassification
Report them immediately. You already left, but find and keep whatever documentation you had for their fraud. The former employer owes the IRS and also you. So that tax bill is not actually yours. Call the IRS and explain it after you report the misclassification.
2000 every two weeks when you are working 4 jobs for 7 days a week is not enough. Find one job that pays well enough. What is the job market like where you are at? What can you do?
Although it seems like a huge deal you can pay this off in the right steps. look up the snowball method to pay off the highest interest first. Look into balance transfers with 0apr for long periods of time like the Wells Fargo reflect card. I dont know about bankruptcy but I know that is an option as well you just kind of take it on the chin but your credit get better after like 7 years I think (don’t quote me I’m not educated on the subject but i know it’s an option) the biggest one I think you’ve already been working on it which is increasing your income. You have to live below your means for a little bit but it’s not as scary as it sounds! People pay off cars that cost more than this all the time so it can definitely be done! I hope it helps! Also that financial guy Caleb, on YouTube, might have similar situations on his podcast that you can listen to. You’re so young and that is a large but manageable amount of debt! Best of luck!
From patreon to crunchy roll cut all but one and rotate them monthly. I would say cut them all but you need entertainment and going out costs more.
If you havent shopped for car insurance in 3 years or more now is a good time to do so
Honestly, I don’t see anything changing.
Looking at your budget, there are margins that can be cut, but I suspect there will be a lot of resistance due to mental health justifications. So good luck, I guess.
can you roll the credit card sent into 1 bill? consildate the interest on tax debt is no joke that would be my priority and not to repeat that again.can you get a roommate to offset expenses?
What do you mean by you didn’t do your taxes correctly??
I can’t help more than anyone else is already other than just saying do not spend money on anything that isn’t absolutely necessary and do whatever you can to increase your income. Those are the only 2 real things you can do.
What I can say though is when I was 26 I was in a fairly similar situation with about $30k in CC debt and it is absolutely possible to get out of it. I just turned 30 and for the first time in my life have no active debt and a properly funded emergency fund.
Your work situation obviously really sucks right now and burn out is a real possibility, the landscape isn’t good right now and it’s easier said than done but I’d really push to find a single main W2 job, and maybe one side job that can take the place of the 4 your struggling to juggle right now.
I’m not sure what the consolidation loan landscape looks right now but if you can get a consolidation loan that pays off all of your CC debt with a much lower interest rate that would be your best bet, but you have to be disciplined because most people do that then max the cards out again and end up in a deeper hole.
Declaring bankruptcy is an easy way to start fresh.
While that probably feels awful and insurmountable, it’s not.
You just need to be aggressive about solving it.
Most people get paralyzed with fear and do nothing and the problem persists and compounds.
There are tons of tools. From debt renegotiation, to consolidating, to zero interest rate balance transfers, to saving more, and hustling for more.
You CAN do it. Will you?
Get rid of your entertainment expenses including subscriptions except one to keep your sanity. Or all of them and watch YouTube.