I would say declare bankfuptcy – screw the credit card companies – they lobbied the government for a. bail out money AND b. to make it harder for you to declare bankruptcy –
in other words they have made the government their ‘agent’.
now the government is inflating its way out of its own debt thus making saving harder.
In other words you’re penalized for being responsible, so don’t be. Use the system

I am 44, I had a similar amount of debt when i was your age and wasted years paying it off – for what? i just made greedy dishonest bankers rich.

Economist: hey pal, what seems to be the matter?
Investor: I own nine properties, and my mortgages are strangling me, I’m financially screwed.
Economist: I see. Certainly, you have options, no?
Investor: well, I could take money from my son’s college fund and pay off the worst one, the messy one that’s causing me three-quarters of my stress. As far as allocations go, that’s the easiest fix. But obviously I can’t do THAT.
E: you can’t?
I: of course not. Everyone knows that your kid’s college fund is sacred. I could never touch it. It’s common knowledge.
E: could you take out a personal loan with the college fund as collateral?
I: I suppose, but that means talking to the bank. That’s too scary of a thought right now for me. I’m a little rattled, as you can obviously see. Thinking about this is tough, which is why I want to act on something now.
E: yes, indeed, I see that. And your son is how old?
I: He turns four tomorrow!
E: astounding. So instead of utilizing something that you can easily start to rebuild in the next few years, you are going to let one debt that represents 75% of your stress eat you alive?
I: well, wait just a second. Obviously, it can be rebuilt. And yes, I have lots of time before I need it. And yes, I’ll have more financial versatility and power once I satisfy this strangling debt. But I’ve had at least ten friends tell me I can’t touch the fund, and they all tell me it so passionately! Surely, they can’t all be wrong? Can they?

PATIENCE….it didn’t accumulate overnight and won’t go away overnight. Just keep working it and keep looking for those deals.

I started off EXACTLY where you are ($30k in debt0 and 7 years later I had $7 Million in the bank; I write about my experiences on my own blog, but encourage you to keep reading this one regularly, as you will need to do everything right if you want to do the same.

BTW: In my opinion – and, I’m only a multi-millionaire, so what woudl I know? – you should treat ALL use of money as an investment and compare the return that you can get: so, pull out that money and pay off that debt, unless you find an investment that return better than 13% in the meantime!

Im 23, attached and have 85k in school loans and I cant get a job more than 14 bucks an hour. Whats my advice?

* For the only job you entered (which has a projected salary of $80,000): 1 allowance.
* Check the “Single” box on your Form W-4.

Assuming these recommended allowance(s) are in effect for all of 2009.your expected refund should be about $900 Following this recommendation will ensure that the amount withheld from your wages will cover all of your projected tax liability while minimizing your refund.

Alternatively, you can claim 2 allowances, which will result in an underpayment of about $25, which you can pay with your tax return or throughout the year as an additional dollar amount to be withheld by your employer (to do so, divide $25 by the number of paydays remaining in 2009 by the number of paydays remaining.

@Verdant Green
If he claims more than two allowances he is probably on his way to an audit or his employer may receive a ‘lock in’ letter from the IRS forcing him to lower the number of allowances.

http://www.irs.gov/individuals/article/0,,id=139412,00.html

1. Request from your employer to change your W4. On your W4, claim the maximum number of withholding allowances, which is either 6 or 9 or 10 or 99, depending on your employer. This will result in little or no money being withheld from your paycheck for federal taxes. This is money held from you without interest so you can pay federal tax in the future. (Why give the federal government an interest free loan when you are in credit card debt?)

2. With this extra $1000 or so a month, pay off your credit card debt with the highest interest rate, although a credit card with a somewhat lower interest but lower balance which can be paid off quickly may be preferable, because that will reduce a bill payment, which will allow you to tackle a higher credit card bill after that.

For example, if I have a $1000 credit card at 10% for which I am paying $50 a month and a $10,000 at 22% for which I am paying $100 a month, it would be better to pay off the $10,000 as quickly as possible. But another point of view is to pay off the smallest balance first so that it gives you a positive feeling of accomplishment and gives you more cash flow to roll into the next credit card bill, i.e. you can pay the $1000 credit card right away with the extra $1000 a month and then pay $1050 a month for the next $10,000 credit card bill.

In the end, you will have gotten rid of a good chunk of your credit card and hopefully have money left over to pay your federal taxes. The government may charge you a small fee for not withholding your federal taxes, but this will be less than the interest you would have to pay on your credit cards.

Some people are scared of doing this because they may not have money to pay their federal taxes. But I argue that the worst case scenario is you pay your federal taxes (which is usually much less than what they would withhold) using your credit card, which makes you not worse off than you started since this amount would have been on your credit card the entire year anyway.

This is not illegal. Putting in an incorrect W4 is tolerated as long as you pay the correct tax in the end.

He should be able to put $1,000-1,500/month towards paying down debt on that salary. I put $1,200/month towards mine while still making my car payment and going to the theater once in a while. Even if liquidating his IRA would take care of everything (which it won’t), you don’t *want* a quick fix for this. A lot of that debt can be attributed to the divorce, but not all of it. He’s going to need to change his spending habits to keep from sliding back into debt.

Calling your credit card company to lower the interest rate will work, but only if you are in serious financial trouble to the point where they think you might declare bankruptcy. A friend of mine got his rate lowered from 23% to 4% last month, but only because his rent + utilities + minimum payment on the card + food nearly equaled his take-home pay.

The first thing I would do would be to start creating an amortization chart. You can download one for Excel or use one of the million that are available on the web. If you can put $1,000/month towards your credit card, then it can be paid off in just 3 years (37 payments) with fairly little pain. If you can come up with $1,500/month, then you’ll be paid off in less than two years (23 payments) without touching your IRA. Remember, if you liquidate your IRA now, you are locking in all of those losses, plus paying a 10% penalty. You have a good long time to recover from this downturn in the market; why cash out now when you don’t have to? Cutting back/eliminating your IRA contribution probably makes if you’re not getting an employer match, but I’d look for other ways to cut back first– reducing your cell phone/cable packages, getting a roommate, increasing the deductible on your car insurance and cooking instead of eating out are all good ways to reduce your expenses. Even little things like skipping your morning Starbucks and not getting soda/candy from the office vending machines will add up over time (and be relatively painless).

There are also some good credit card deals out there if you have a really good credit score (in the high 700s). Chase had a balance transfer deal where your interest is 3.9% until you pay off the loan as long as you keep making your payments on time.

Good luck!