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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Bankrupt or try to 'gut it out'?||Date: 11/14/2012 7:54 PM|
|Author: aoeuid||Number: 306429 of 308881|
AJ wrote about our budget:
I think you are being overoptimistic on several counts:
***Yeah, I thought it seemed a bit 'too good' to be true. But the mountain cannot see the mountain. So, thank you for sharing your thoughts below.
- you haven't said that you have stopped using the cards - if you haven't already stopped using cards, stopping their use is critical to the implementation of this plan, and may not be that easy to do
****We haven't used them in over two months now. But, I do see your point and thank you for the reminder.
- you are not adding BT fees to your debt balances or else assuming that the interest rate (and along with that, the required minimum payment) will go up if you don't find another BT opportunity - this alone will probably add 6 months - 1 year to your plan
****OK. Good point. I can live with that. However, thank you for making us aware of that area.
- since you haven't been tracking your spending, I suspect that the other expenses are probably in excess of $1000
****You could be right. I think the wife has been tracking some lately. But we have not been disciplined in that area. I know. We need to be. Thank you for the reminder.
- you never said if the $1000 was net of estimated tax payments - if it's not, then you won't actually have $1000 or your tax refund may not be as large as you plan, if you get a refund at all
****Hmmm. . . . Interesting. Taxes have always been that 'mystery item/area' to me. So much easier when I was single and did the 10W EZ form. I was just hoping that sense we are poor (Lets says we claim 55,000K gross) and have three kids under the age of nine, we'd be getting some money back. How much? That is that mystery place to me...
- do you really think that 14 and 26 year old vehicles will last another 6 - 7 years? And is your plan to go back into debt to replace them when you pay off the non-mortgage debt?
*****Excellent point. No, I doubt they will 'live' another 6-7 years. It is is the realm of possibilities . . . but doubtful. We are good on routine maintenance and have a friend that owns a repair shop. He keeps us going at a cheap price when we break down. But lets say we need $1,500 for a new tranny . . . Hopefully we will have enough cash in our emergency fund to take care of that. Also, I'm not too proud. I have bought and own many cars that I paid in full, with cash, for 500 bucks. They exist. For three years before going to college, I was an autobody replair man. I have a good idea what to look for when I buy used cars. I have probably bought about 20 of them over the last 35 years . . . and they all served me well.
****One more point, she did not factor end that I am willing to work this summer. I don't know what my odds of finding a job are if I tell them that I am a teacher and will have to stop working for them around mid August. Anybody got any ideas? I thought of putting an aid in the paper as a "personal trainer for overweight kids". Maybe that would take off. I'm lean and that is the subject area I teach. Physical education.
****So AJ, do you think 8-10 years would be a more realistic time frame? Man o man . . . that is a long time to be a slave . . . But I keep telling myself, "I got too much junk as it is any way..." When our three daughter are all in their teens during that 8-10 year period, that could get expensive.
****Is the 'best' plan to try to get out of this ourselves over the 8-10 year period, rather than to throw in the towel now (or, in a year) and declare bankruptcy? A judge would probably kicks us out of his court in a hurry saying something like, "three pets, dance and gymnastics for three girls, a Wii, Netflix, $50 bucks a month for mental health therapy and you can't pay your creditors what you owe them? Drop all the things that I mentioned and you can have them paid in 6 years. You are not trying hard enough. Get out of my court-room!"
****I just think bankruptcy at times to protect our few assets, our home and my 401k that has 20k in it, and my teacher's pension. We have still yet to miss a payment on anything . . . but it seems like we are just one emergency from being in hot water. While we send all this money to unsecured debt, we could have been building up our cash reserves to higher levels, to insure protection of the above mentioned assets.
****Thanks again for your time and input AJ. I really appreciate it.
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