Submitted by No_Doubt8136 t3_11ctr8b in personalfinance
My wife and I have a total of $130,000 in credit card debt. We’re both self employed. I usually make about $150,000 a year after taxes. She makes about $35,000. We’re currently paying about $5,000 a month toward the debt which is close to the minimums but not quite. Only about $1,800 is going to principal. We’ve had the debt for 2 years now and just can’t make a dent in it. We built our house 2 years ago which is where half of the debt came from. We charged some materials and used the cards for some living expenses because while I was working on the house I wasn’t out earning money as much as I should’ve been. We do have quite a bit of equity in the house. Currently owe $345,000 on the mortgage and we owe the person we got the lot from $80,000. The property is worth about $600-$650,000. We tried to take out a home equity loan but they only would give us $50,000 at a high interest rate and with closing costs and fees it just made no sense. Our credit scores are not great because all of our available revolving credit is used up. Hers is 620 mine is 640. We are never late on any payments but the debt is holding our scores down. If our scores were over 700 we could probably get a better rate and more money out of the home equity loan but I think we would have to pay off at least half the cc debt. We haven’t been spending carelessly at all. Just the cost of living in our area with 2 young kids. There’s not much we could cut back on. We have no auto loans, no expensive vacations, no expensive hobbies, and we eat at restaurants maybe once a month. Any suggestions?