New Job, More Money, What's the best course?

[pandamonium]

Hey guys, I haven't ever went through bankruptcy but this forum is extremely supportive and smart so I had hoped that didn't matter. I came really close to going through with it though.

I have about $15,000 worth of debt that has been attached to me since I was 19 (I'm 24 now). Stupid choices when I was young as I haven't missed a bill in the past 2-3 years. However, I haven't been able to put a penny to that $15k worth of debt, only being able to pay my living expenses and immediate bills.

I just got a new job where my income went from $32k to $75k, so I have much more of an ability to improve my credit situation. My monthly bills total amount to $2000 with personal expenses added in as well. After taxes I'd probably have about $3000 to work with and push in any direction I wish.

My $15k worth of debt consists of $3k worth of student loans, $6k from an apartment eviction, $1.4k worth of credit cards from years ago, and the rest $1-$500 tiny things (electric, a store credit card or two, cable), etc.

What's my best course in using that $3k a month toward those bills? Should I pay off the tiny things first, thus relieving many items from my credit report, or should I tackle the larger more expensive items that I owe on first?

After I figure that out and get it paid, I had hoped to get a secured credit card and just use that for all bills paying it off right away to get the credit going in the right direction. Thanks for any tips/feedback. Its so refreshing to finally be able to even consider getting this ball and chain off my back once and for all. Its so frustrating to not be able to do anything until now.

[SMinGA2]

Contact the creditors - see if any accept a 'pay for deletion'. Some might, some won't.

For the student loans - perhaps see if you can get them back in good standing BEFORE you pay them off. That might be a way to ultimately get it changed from a negative account to a positive. ($0 balance negative is still negative.)

[pandamonium]

When you say put the student loan in good standing, does that mean pay the balance due then keep paying regularly what they ask for? Thanks for the tip on pay for deletion, that could save me loads of money and my credit report.

[keepsmiling]

Congrats on your GREAT news.
It's good to be young with a promising future
Keep us posted on your progress.

[SMinGA2]

I was thinking more along the lines of rehab, if that is a possibility for you.

When you say put the student loan in good standing, does that mean pay the balance due then keep paying regularly what they ask for? Thanks for the tip on pay for deletion, that could save me loads of money and my credit report.

[Logan]

Pay the highest interest rate debt first unless it's the student loan. The only exception is something in bad standing-you may consider getting rid of that 1st. Also, I would put something away every month in a savings account--don't put everything towards the debt---if you don't set up an emergency fund and something happens you'll have to take care of the emergency with debt.

Logan

[downthetube]

I agree with Logan:
This is what I would do (gotta have the discipline and patience)
Take $1500 apply it to debt and it should take 10-12 months for it to be gone.
Take $1000 and put in a long term rainy day fund. You goal should be at least 6-9 months of life expenses (so $2K*6 or $2K*9 = $12-18K), You should be there in a year.
Take $250 and invest in your company 401K/IRA or IRA retirement if they provide matching.
Take the last $250 and keep it in checking/savings... separate from the rainy day fund.

I know this doesn't sound like much fun for the first year, but in the long run it will put you ahead of your peers.
Following a 1 year plan like this sure beats following a court ordered 5 year plan :>)

Best of luck!