Letters to the Editor
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Four words...
Consumer Credit Counseling Service...
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prioritize your debts
I think Cary's advice on this is good. I would add, if you're trying to decide which debt to pay down first, the first priority should be to pay off your former landlord. Competition for housing in New York is tough, and nothing's going to make you look worse to a prospective landlord than stiffing your previous one.
It's also worth negotiating with creditors to accept offers in compromise. So you owe your former landlord $2,500. Would she take a lump sum of $2,000 instead, cash on the barrel head instead of having to get it in payments over the next two years? Can you tap relatives for this money up front and then pay them back over time, so you can get clear quicker? Can you pay off smaller credit card debts with lump sums before they get sent to collections? There are some great books out there on strategies for dealing with debt. Good luck.
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Quick and easy is always slow and painful in the end
Bankruptcy would be the dumbest thing to do. I'm not an expert on bankrupcty, but it ruins your credit for years (I believe at least 7) and even after that your credit is still terrible. Forget about getting an apt in New York after the landlords check your credit history. Besides, $4500 in credit card debt and another $2500 to landlord debt is really not that bad. If you're serious about moving to New York, pay down the debt. Talk to your old landlord about working something out so that he or she doesn't call a collection agency. Talk to your credit card company and see if they will work out a lower interest rate.
Most importantly, have a plan. Have a plan to save money, even it means making sacrifices. And finally, have a plan on when you are going to New York and what that means. Worry about the 'hows' and 'whens' rather than the 'whats'. While I don't want to sound like a plug, read David Bach's "Smart Women Finish Rich". My girlfriend, along with other women I know, felt it really did speak to them. At 25, you're still young and in pretty good shape, just pay off your credit card and landlord debt and don't make things worse by declaring bankruptcy.
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NEGOTIATE!
Save up money to pay back your creditors in lump sums and then negotiate to pay less than you owe. Most credit companies will accept exactly what you owe them minus ALL of the interest they have added on. Before you pay them - this is important - make them give you a letter promising that when you have paid them the agreed upon amount they will clear your credit. Do not pay them without the credit clearing agreement.
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Talk to a credit repair counselor and don't move to NYC
I get the impression you're looking for an quick way to move on from the nasty situation you got into with your ex. Bankruptcy might seem like an easy out but it will haunt you for a very long time. Your credit will be damaged for 7 years and you'll have trouble getting a card to TJ Maxx, let alone a car or home loan.
You might try calling some local banks and seeing about talking to a credit repair counselor. 6,500 in debt is not insurmountable, and with some creative consolidation you will probably be able to pay it down.
Also, don't consider NYC; I haven't lived there but know folks that do; it is painfully expensive. Have you considered Austin? I live here; its a pretty culturally rich city, and you can still live close to downtown for a pretty reasonable price. It doesn't have the quite the cosmopolitan and fantastical lure of NYC; then again, you might actually be able to afford to see a show or eat out occasionally in Austin.
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$7000 debt?
Putting things in perspective, $7000 will pay for a New York apartment for about 8 months, maybe more if you take on a roommate.
So, take the advice Cary, and other writers have provided - work for a goal, pay down your debt, and save some money. Even if you don't wind up moving to New York, you'll have accomplished something. Perhaps working towards a concrete goal, counting up your quarters and knowing how long it will take, may make it easier to avoid the panic attacks, since you'll be very sure of what you're doing next.
And stay away from guys who will "take care of you". You deserve better than some jerk who wants you to be his pet for a while, and then dumps you at the side of the road when he's bored.
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Forget about bankruptcy
The change in bankruptcy law last year changed things. Your debt won't be erased when you declare; I believe all that happens is you're put on a payment plan.
If you do declare, you'll still be able to get credit, though at exorbitant interest rates.
I tried to use Consumer Credit Counseling Service with a debt load that was similar to yours and they told me I wasn't far enough in debt. So be aware of that possible outcome.
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OK
I always read carefully before I post. In this case, I'm posting first, just after reading the headline, "I'm drowning in debt and dreaming of New York," which I just heard is the 12th or 14th most expensive city in the world, according to a recent study. Sure, you might get a job of your dreams there (they do have a buttload of great jobs, I suppose, to go with the cost of living)...
So I was instantly moved to write: "I'm just about out of gas, and I'm thinking of revving the car up to 9000 rpms!" Sure, it might give you just that extra nudge you need to get to the gas station...
Now to read (sorry if this doesn't pertain at all to the article, but I bet it does)
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OK, now I've read it
And my advice stands. Cary's advice was great too:
I think you would be better off if you committed to spending a couple of years more in Texas trying to get stable financially. New York is such an expensive city, and such a challenging place, I think you'd want to be in a stronger position financially and emotionally before you made the move.
Perhaps, too, it would be good if you moved or commuted to a mid-size Texas city, as a platform from which to spring. Letter-writer: you may get ripped for your choices from others, but not by me. That's a run of crap luck, and sorry to hear about it.
The good news is, $7000 is a lot of debt, but that's really not so much that it's impossible. I do think that New York is a leap for which you want to have some booster rockets (i.e., several thousand in savings to tide you over for rent, if you need it) before you go. Otherwise, it could be a spectacular wipeout, and instead of being a beautiful experience, as it could be, it would be a blip of sourness on your life's radar screen. You can get your $7000 paid off. Do that, save some more, then go. Good luck, you sound like a good person, and probably not an irresponsible one.