Minimum Payments and the Debt Snowball

**HookMan** · 09-28-2011, 12:56 PM

Hello everyone,

My family has $44k in CC debt on 6 cards. We have been robbing-Peter-to-pay-Paul to pay the minimum payments. The total payment on the minimums is about $850. We only have about $450 allocated for minimum payments.

Regarding starting BS2, is it advisable not to make minimum payments on a few of the CCs in order to pay more than the minimum on the smallest debt to knock it out quickly?

I realize we'd incur late fees and possible collection action but I feel as though we don't have many other options.

We are actively looking for 2nd jobs, selling things, and being more frugal, but it's a tough climb.

We also plan to stay in our home long-term so I am not worried about temporarily harming our credit.

**Greebo** · 09-28-2011, 01:06 PM

Originally Posted by HookMan

Hello everyone,

My family has $44k in CC debt on 6 cards. We have been robbing-Peter-to-pay-Paul to pay the minimum payments. The total payment on the minimums is about $850. We only have about $450 allocated for minimum payments.

Regarding starting BS2, is it advisable not to make minimum payments on a few of the CCs in order to pay more than the minimum on the smallest debt to knock it out quickly?

Generally not. Baby step 0 is to get current on all of your debts. If you did this you would set yourself back to Baby Step 0, and while you're at it you'll get hit by tons of penalties and fees and the collection calls will begin.

If you simply DO NOT have the money to make your minimum payments, then you should look at making prorated payments. Have you got the TMMO book? It's explained in there.

We are actively looking for 2nd jobs, selling things, and being more frugal, but it's a tough climb.

We also plan to stay in our home long-term so I am not worried about temporarily harming our credit.

Have you posted your budget here? We have people here who can squeeze dollars out of pennies.

**HookMan** · 09-28-2011, 01:25 PM

Originally Posted by Greebo

Generally not. Baby step 0 is to get current on all of your debts. If you did this you would set yourself back to Baby Step 0, and while you're at it you'll get hit by tons of penalties and fees and the collection calls will begin.

If you simply DO NOT have the money to make your minimum payments, then you should look at making prorated payments. Have you got the TMMO book? It's explained in there.

Have you posted your budget here? We have people here who can squeeze dollars out of pennies.

Yes, I have TMMO and will review it more thoroughly!

I'm brand new to FV and haven't yet posted my budget.

Thanks for your input!

**Russ** · 09-28-2011, 01:39 PM

Originally Posted by Greebo

Have you posted your budget here? We have people here who can squeeze dollars out of pennies.

True! The hard part is, they squeeze the dollars out of the "fun pennies" sometimes, so be prepared!

**MaryCarney** · 09-28-2011, 02:04 PM

Sad but true - what Russ said. BUT if you're serious, it helps to have a fresh set of eyes look at the budget.

**Lady_V** · 09-28-2011, 02:11 PM

There are no fun pennies if there are no giggling dollars!

Yes... some of us will tell you things you won't want to hear... but it's usually things you know needs to be done but just wanted it said by someone else.

A bit of a heads up... we will NOT sugar coat a crisis budget, and you will want to say no, no, no, can't do this because... can't do that because... remember, you asked us for advice... you don't have to take it.