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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: Bankrupt or try to 'gut it out'? Date: 10/30/2012 9:37 PM
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Having read through this thread, once again this board has focused on blame and judgement and lost track of the original problem. I realize that part of getting out of debt is identifying and addressing the underlying problems, but I think some practical advice has been lost in the process.

First, I don't want to get into the whole area of marriage counseling. That's not my area. But I do think OP and DW should make an appointment with a NFCC (National Foundation for Credit Counseling) affiliate. You can find one at http://www.nfcc.org.

Through the NFCC, a local Consumer Credit Counseling Service will sit down with BOTH of you for free and help you analyze your income and expenses and explore your options. They can help you identify ways to cut your expenses and boost your income, and they can often contact your creditors on your behalf and help you enter into a legitimate debt repayment plan (not one of the rip-off debt consolidation services).

Secondly, OP talked about cutting things out like internet and phone, but I don't think that's the right approach. I think you should consider reducing where possible. This is something the two of you need to do together. Look at your cell phone minutes usage and make sure you are not paying for more minutes than you need, or that you are not paying overage charges. With online bill presentment and charging payments directly to a credit card, it is easy to not catch gotcha charges.

Similarly, basic cable internet should only cost about $40-$50, so if you are paying $90, there is probably more to it. Cut out any premium services, reduce internet speed to it's basic level and if you have local phone service, explore reducing from an unlimited plan to a limited voice plan. That will last at least until your youngest becomes a teenager and gets glued to the phone.

One extreme option is to leverage your internet connection by dropping local phone service all together and getting Ooma. It has an up-front cost of about $179 ($129 at Costco) but the basic phone service is free forever (I pay about $4/month in taxes). And the voice quality is terrific. Easy to install, uses all your existing phones, could save you $30-$50/mo depending on your phone bill.

If you don't shop at a warehouse club like Costco, you should consider it. Buying in bulk with a family of 5 can save you a ton of money. Clipping coupons today is not a passive experience in today's world. Go to web sites like Coupons.com, SavingsStar, etc. where you can get printable coupons, coupons tied to loyalty cards, cash back rebates delivered to a Paypal account. I use all these to save money on groceries. Check out Alice.com to see if you can get better pricing online than in store.

And if you have an Aldi's nearby, definitely check it out. You will have to bag and carry your own groceries and pay cash (no credit cards), shopping cart rental costs a quarter, and you won't recognize any brand names, but their variety is good, lettuce is fresh, and their frozen meals delicious. My last trip to Aldi's cost me $84 and would have easily cost $100 or more at Kroger.

As for refinancing, you should ignore the banks and talk to a credit union. As a teacher you almost certainly have access to one. See if they can offer you a loan product that you can make work for you. It is a risk getting a fresh valuation of your house, but worst case is you don't refinance and your original bank loans remain the same.

I am not saying you don't need to address your relationship issues, but I am not hear to point fingers or play psychologist. I am only interested in what you and DW can do going forward to get your debt situation under control and plan for your family's future.

Fuskie
Who strongly encourages you to start with a consumer credit counseling service TOGETHER as a way of ensuring that both of you buy into whatever plan of action you put together...
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