I have excessive balances on credit cards as well as a mortgage and car loan. What are my options?
Well, you have made the first step and that is acknowledging that you have a problem. The next challenge is to stop the cycle. If you have not already done so stop using the credit cards, cut them up if necessary. Watch out for the “Credit Counselors”. Often they are scams and get you in worse shape than you were to begin with. Contact your creditors. It is best to be proactive. Know what you can afford to pay and discuss a payment plan with them. There are two schools of thought when it comes to selecting which cards to pay off first. One is to pay the highest interest cards first to minimize the money you spend. This is best if you are disciplined and will see it through the long road. If you need more immediate gratification consider paying off your lowest balance and apply the extra money to the next card. You will see progress quickly with this method and my clients have had much more success getting out of debt with this method. Finally you need to address what got you in the mess. See what you can eliminate from your budget. I suggest starting with prioritizing with a 1, 2, or 3 all of your expenses with 1 being an essential expense and 3 being discretionary. Eliminate all 3’s and start working on the 2’s. Apply your extra income towards the debts. If you can get a second job do so and apply this money towards the debt. You can stop when this is paid off. This will accomplish two objectives the first is that you will minimize your budget and when you get out of debt you will be on much better footing and less likely to repeat your situation. Also know that you are not alone and you will get through this. Don’t make a second mistake and file for bankruptcy unless absolutely necessary. Best of Luck.
I would also add you research bankruptcy as an option. If you don't have many assets it could be a better option for you to get out debt and build your life. I would not look at bankruptcy as a last resort. Then you wont have much leverage. A good advisor should be able to tell you the pros and cons. When you try to work with creditors, they will put on a payment plan, reduce your interest and also report on your credit report that you are on a payment plan. This will prevent you from getting any new credit, that is sometimes good and sometimes not so good.
Steven and Tunc make great points. It's overwhelming when you face all of the debt. I would build a plan. Then take it one step at a time. That plan would start with figuring out how much you spend per month and how you can live more simply. What expenses can be cut or reduced? It took a while to get into the situation you are in and it will take a while to get out. Consistent right actions of spending less than you earn over time and using the excess to pay down debt will produce good results. Establish the discipline of tracking your spending each week. Evaluate all major purchases by asking yourself "Do I really need this?". Then if you think you do, wait three weeks and see if you still feel the same way. Often, the time will change your thinking. You can get out of this. One step at a time over time.