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Author: salsaginger Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308882  
Subject: My Story Date: 11/2/1999 1:07 PM
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I have been lurking for a couple of months now, and I don't have any specific questions, but I thought it might be therapeutic to finally post my story. I come from a family of debtors. My parents are so far in debt at this point, that I think they will never really pay them off. This is while making an income in the 120's. I can't say that it's their fault that I am now in debt to the tune of about $61,000, but it certainly didn't help that I never learned that I couldn't have what I wanted exactly when I wanted it. I started accumulating posessions, and the debt that went with them when I was in college. It all began with a new computer ( I was a computer science major). However, I found that as soon as I charged my first big item, it was easier to continue charging. When my husband and I got married a little over a year ago, We put an apartment full of furniture an other "necessities" on the card. We now have about $24000 in credit card debt, a $15000 car loan, and $22000 in student loans. I feel like I'm drowning in debt and I'll never even make a dent in it. My husband and I wanted to start a family in a couple of years, but I know we can't even think about it until we pay off this debt. We keep going through periods where we spend practicaly nothing, followed by period where we get sick of feeling deprived and start spending again. I know that we need to stop spending before we're going to get anywhere, but at times it seems we have no self control. At this point I just thought maybe I could get some ideas and support. Thanks.
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Author: johnmoni Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18944 of 308882
Subject: Re: My Story Date: 11/2/1999 1:28 PM
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SG,
There is lots of help here - don't get discouraged. You are right, it is going to take some time to get out from under the debt pile, but you can do it. Others wil post a lot more detail, but here are a few "sound bites" of where to start:

- Take a look at your cash outlay vs. income. You need to document every penny of spending, and weigh that against the every outstanding debt. How much is discretionary? Cable bill, cell phone, etc., etc.? If you are serious about doing this, all except the absolute minimum living expenses need to be eliminated.

- You must CUT UP AND CANCEL THE CARDS and stop incurring more discretionary debt;

- What kind of car do you have? Can it be "swapped" for a cheaper/lower payment vehicle?

- Can you sell any of the "stuff" you've acquired to apply toward the debt?

- Can you consolidate the CC debt into a cheaper card, or personal loan? (Assuming that you CUT UP AND CANCEL THE CARDS.

Take a look at the sequence of posts by GeorgiaBoy1 out here (or in the LBYM board - I'm not sure where) to see a real good example of someone in a similar circumstance, and how he and his family are eliminating debt and LEARNING to LBtheirM. Behavior modification isn't easy, but if you want to eliminate the debt, you MUST change your lifestyle, pure and simple. The long term impact of consumer debt will weigh you down like an anvil for a very long time, if you do not take immediate action. Those who are nearly or completely debt-free will tell you it is a glorious, peaceful feeling. Look for others advice out here, it will be very good. Good luck - YOU CAN DO IT.
johnmoni

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Author: BobSch Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18946 of 308882
Subject: Re: My Story Date: 11/2/1999 1:47 PM
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The only thing I'd modofy in Johnmoni's advise is look at the fine print before you actually CANCEL a credit card, some CC will raise your rate if you cancel a card while you're still paying on it.

Definitely stop using the cards (cut them up if it helps with the willpower) but check before you cancel them.

Bob
... been ther, done that, have the CC confetti to prove it.

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Author: wagnerlj One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18949 of 308882
Subject: Re: My Story Date: 11/2/1999 2:07 PM
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We keep going through periods where we spend practicaly nothing, followed by periods where we get
sick of feeling deprived and start spending again.


My SO and I went through this in the early stages of changing the way we look at money. Some very smart Fool on this board pointed out that the desire for the instant gratification of being out of debt RIGHT NOW was the same desire for instant gratification that got us under the claws of the credit card monster to begin with.

I have found that a more moderate approach works at my house. We allocate enough "spending money" to not feel deprived. We feel the change, restricted, but not deprived. The debt payoff is more gradual, but it is much easier to stick to the budget.

Good luck, simply knowing that something has to change puts you on your way to debt freedom.

Lori



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Author: Leviathan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18950 of 308882
Subject: Re: My Story Date: 11/2/1999 2:09 PM
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I have been lurking for a couple of months now, and I don't have any specific questions, but I thought it might be therapeutic to finally post my story. I come from a family of debtors. My parents are so far in debt at this point, that I think they will never really pay them off. This is while making an income in the 120's. I can't say that it's their fault that I am now in debt to the tune of about $61,000, but it certainly didn't help that I never learned that I couldn't have what I wanted exactly when I wanted it. I started accumulating posessions, and the debt that went with them when I was in college. It all began with a new computer ( I was a computer science major). However, I found that as soon as I charged my first big item, it was easier to continue charging. When my husband and I got married a little over a year ago, We put an apartment full of furniture an other "necessities" on the card. We now have about $24000 in credit card debt, a $15000 car loan, and $22000 in student loans. I feel like I'm drowning in debt and I'll never even make a dent in it. My husband and I wanted to start a family in a couple of years, but I know we can't even think about it until we pay off this debt. We keep going through periods where we spend practicaly nothing, followed by period where we get sick of feeling deprived and start spending again. I know that we need to stop spending before we're going to get anywhere, but at times it seems we have no self control. At this point I just thought maybe I could get some ideas and support. Thanks.

Just to add what johnmoni said, one problem you may be having is that when you try to cut back on lifestyle you are trying to cut to the bone. For most people, that just won't work. It's like trying to lose weight by not eating for a couple of weeks. What works better is cutting down on eating fatty foods and exercising. Similarly, you probably need to budget a little bit of fun into your lives. That doesn't mean you get to eat out three times a week or go on vacations twice a year. It means that you get to order pizza once or twice a month. That might help you a little more with your budgeting.

Leviathan

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Author: piranhakeeper One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18951 of 308882
Subject: Re: My Story Date: 11/2/1999 2:14 PM
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I would not suggest trying to go through periods of putting all your extra money towards the crediti card. I think discretionary income is a necessity.

I am also big time in cc debt. I took out a $25,000 home equity loan and have about $25,000 more that I could not include.

With only tiny discretionary income, I can pay off $1,000 extra per month plus the stated due amounts. I have paid off a few credit cards and am looking forward to see them all drop.

In small consolation to the $1,000.00 I "don't have to spend," I try to think about the $20.00 monthly growth in discretionary income by the lowering minimum dues. Next year my discretionary income will be increased by over $240.00 per month. A little better for enjoying life under less pressure.

When the credit cards are done, on to the home equity loan. Then imagine, $1000.00 a month discretionary income! The way it should have been all along.

The way I think about it now is I bought maybe 4 or 5 tv's many years ago but I only received one. If I waited until I actually had the money I would have gotten 1 for 1.

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Author: georgiaboy1 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18954 of 308882
Subject: Re: My Story Date: 11/2/1999 2:52 PM
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We keep going through periods where we spend practicaly nothing, followed by period where we get sick of feeling deprived and start spending again.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Don't get so down on yourself. Find a balance. We are in pretty deep too. At first, I became the budget gestapo and my wife would go off the deep end and spend on something stupid. We had to find the balance that worked for us. We don't buy anything we don't need, but it has been therapeutic for us to grocery shop together, (I did it before because I didn't think she was Foolish enough to do the grocery shopping). Now she gets her shopping high from getting a good deal on ketchup. (LOL) Try to get consistent and use a budget. Plug away on the debt and do the best you can. By the way, if you wait to have kids when you can afford kids, you will never have the first one. Good luck,

Will

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Author: Chitwnlady Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18965 of 308882
Subject: Re: My Story Date: 11/2/1999 4:30 PM
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"We now have about $24000 in credit card debt, a $15000 car loan, and $22000 in student loans. I
feel like I'm drowning in debt and I'll never even make a dent in it."

Dear salsaginger,
(BTW - I love the name you picked! Are you a cook or a dancer?)
Welcome to the credit card board. If you have been lurking for a few months, you probably have (as I have) picked up some very good information. Have you tried to do a budget yet? Also, it would be helpful to assess your situation if we had more specific information such as, what are the interest rates on the various forms of debt; how much are you able to allocate each month to pay towards the debt, etc. Just a thought, good luck to you.

Chitwnlady

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Author: TMF2Aruba Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18974 of 308882
Subject: Re: My Story Date: 11/2/1999 5:16 PM
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We keep going through periods where we spend practicaly nothing, followed by period where we get sick of feeling deprived and start spending again. I know that we need to stop spending before we're going to get anywhere, but at times it seems we have no self control. At this point I just thought maybe I could get some ideas and support.

Hi salsaginger!

Welcome to the board, and thanks for coming out of lurkdom. ;)

I think it's very interesting that you believe your spending behaviors are modeled after your parents. I've no doubt that's played a major factor. But there's one big difference: you've recognized that there's a problem, and you'd like to address it. That's the hardest part of all because if you don't see the problem, it simply continues to grow. So, for this, you should be proud of yourself--it's a big step.

Now, as far as the debt, you should know that many, many others right here in this forum have addressed, attacked and overcome much more than you're facing. You too can overcome this, and we'll all be here along the way to help wherever we can. Support, you'll find no shortage of. ;)

I find the key to be what you've stated above--the issue of self-control. This is very understandable and when you're trying to live without, you can easily reach a point where you say, "Hey, c'mon! I work hard, I want to treat myself." I think this is where moderation has to come into play.

Now that you've made the first step of saying, "I need to do something about this," you need to take the second step and that's discipline. Where I'd guess you failed in the past was by trying to do it all at once. You can't just stop spending until you have a clear picture of how much you have, how much is coming in, and most important, where it's going. To simply stop spending is tantamount to going on a diet and simply not eating. Without knowing what you're intake should be, by the end of the third day, you're so desperate, you just eat everything in sight.

To begin, after making the commitment to address the debt (both you and your husband need to be a team in this, btw), sit down and figure out the budget. List the exact amounts that flow into the household, and then itemize exactly where it's all going. Don't simply list what you think you should be paying, list all that you ARE paying. That's the first step.

Then, make the cuts. Cut deep, but in your case, don't cut too deeply. For example, if you go out to dinner 3 nights a week, don't simply eliminate this pleasure from your lives. There needs to be some reward involved. Cut down the dining to one night a week. That's just an example, but you can do the same thing with lunches, shopping, cable, etc. until you've addressed everything that pertains to your lifestyle.

I'd also suggest that you set reasonable goals for yourself. Don't start off with the idea that you need to wipe out the debts pronto. While that is the ultimate goal, think of the bills in terms of how much you can pay each month over the minimum balance. This is where you want to be putting the savings from the household cuts you've made. The more you can send in each bill, the faster you'll be eliminating the entire debt. It'll happen.

Some other things to keep in mind, if you haven't yet:

1. You haven't mentioned what your interest rates are, so if they're on the high side, give the issuers a call and try to negotiate lower rates. You'd be shocked to see how easy this can be.

2. Try to save up some cash on hand in an emergency fund. Remember, it's imperative that you don't charge, and any cash on hand for unexpected events will allow you to not be tempted to use the cards.

3. Read the FAQ and "Dig Yourself Out of Debt Link" at the bottom of this page, as well as the Living Below Your Means board for myriad ideas on saving money.

Ginger, you can do it, others have, and we'll be here for ya!

Good luck!

Tony
...but I still am...

Off2Aruba

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Author: LeeSc Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18992 of 308882
Subject: Re: My Story Date: 11/3/1999 7:22 AM
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<<We keep going through periods where we spend practicaly nothing, followed by period where we get sick of feeling deprived and start spending again. I know that we need to stop spending before we're going to get anywhere, but at times it seems we have no self control. At this point I just thought maybe I could get some ideas and support. Thanks.>>

Let's compare your spending habits with being over weight. The first thing that any weight loss expert will tell you is not to deprive yourself. However, the next admonition is moderation. The same principal applies here. Don't deprive yourself, but learn moderation. You can find ways to amuse yourselves that are very inexpensive, or even free.

It sounds to me like you're basing your happiness on 'stuff', which is a way of misleading yourself. I'm sure you've discovered by now that you aren't any happier after you busy something. In fact, you're probably miserable, considering your financial situation. The question is, are you ready to stop feeling miserable and do something about the problem?

The first step is for you and your husband to sit down and realistically look at your debt, and your income. Then you formulate a plan to eliminate that debt as quickly and realistically as you can. It may take 2-4 years, or longer, but you can do it if you're committed. There are a lot of strings in this message board and others with strategies for digging yourself out of debt. Read them and choose the one that works best for you.

From what you've written, I would guess that you are in your 20's. You have a lot of life ahead of you, and a lot to look forward to. Your situation may seem desparate, but believe me, it's not. You're just going to have to be committed to fixing the problem. Not just you, but your husband as well.

Good luck,
Lee

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Author: nicc Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19011 of 308882
Subject: Re: My Story Date: 11/3/1999 12:56 PM
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I graduated college with over $20,000 in students loans and the following three years accumulated $7,500 in credit card debt. When I got a new job that doubled my salary I thought...great, it'll be easy now! But in reality I just spent more, and as a result became depressed by the weight of the burden. I cut back to the point I felt deprived.

Last year I decided to take control and thanks to my sister and her husband who conquered their debt I now have $1,800 of the card debt and $4,500 in student loans left.

I began by taking out a consolidation loan at the bank. Instead of paying 17% and having to keep looking for transfer balances - I pay 12% interest with regular payments - and I forced myself to face the fact that this wasn't a problem I was going to fix in a year. The loan made me realize I was going to have to change the way I dealt with $$.

I carry only my American Express so that I have to be able to pay for it I buy it. I have friends over to dinner instead of going out and can usually serve a great meal for what would have been my portion. Hiking and rented movies, visiting relatives, picnics by the water, taking walks in the park each night have helped take a bite out of my spending and allowed me to invest more in my relationships.

I still indulge from time to time, but it is much more calculated and I know what I will have to sacrafice to do so.

I also began a system of sitting with my bills and figuring out what remains. Part of that now goes to my IRA and the rest is my free money. Once the free money is gone...I find free entertainment.

It isn't easy, nor is it quick but I prefer to find ways of being a cheap date than becoming depressed because I overspent.

Good luck!

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Author: SAGaucho Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19012 of 308882
Subject: Re: My Story Date: 11/3/1999 12:58 PM
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You know, its kind of funny when you hear other people's situations, how it kind of puts yours into perspective.

My total debt is less than 10% of yours and on a credit card at only 5.5% (until this balance is paid off). And for me, it still seems that it will take so much time (10 months - 16 months) to pay this balance off, that there are days when you just can't deprive yourself of that computer anti-virus, car repair, medical bill or replacement pair of shoes any more.

It does not get any easier being in the US either (I lived overseas for a few years where there wasn't so much keeping up with the Jones'). When we make plans to make a nice payment to the card, we realize we have to buy a birthday gift, housewarming present, father's day, mother's day, valentine's day gifts that it significantly reduces the payment. (And I'm only talking $30 dollar gifts).

There is so much information in the Message Board that you can find hundred's of opinions. However, I always pay more than the minimum on the credit card. But I also invest in my 403(b) plan and invest small amounts in two stocks occasionally using via Drip investing. When we eat out, I use 2 for 1 coupons and we eat chinese where 1 dish is enough for two people. We go to the $2 discount movie theaters in our very economical Honda Hatchback ($10 - $25 in gas per month - almost no maintenance). Sometimes we just go to a bookstore on a Saturday night. (If I find anything that interests me, I borrow it from the library).

We go clothes shopping at Outlet Malls and only buy things on sale (my wife sometimes doesn't).

But looking at the size of your debt, I feel much better. If I was in your shoes, I would try to work out some type of payment plan. Make a payment to your outstanding bills everytime you get paid, not once a month. (the interest must eat up a large portion of your payment).

I think that you should try to save a little to enjoy because if you deprive yourself of everything (including saving for retirement) you will have to splurge just to relieve yourself from your recent lack of ammenities.

Much lunch break is over, so I must go. I don't know if I made you feel any better (you made me feel a little better though). You are in quite a hole, however, I am sure that there are people out there with more debt. With a good plan and powerful commitment, you should be able to tackle your debt. Good luck.

SAGaucho (South American Gaucho) Mike

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Author: ParagonWP Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19013 of 308882
Subject: Re: My Story Date: 11/3/1999 1:11 PM
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I've been there, I'm still there, although I can say we are finally seeing some improvement over the last couple of years in our attitude toward spending and debt, and in the amount of debt we're carrying. I just wanted to share a tape that helped me. It's called How to Get out of Debt, Stay Out of Debt and Live Prosperously, by Jerrold Mundis. It's not the best book written on the subject--far from it, but his ideas about how to get through day to day while you change your spending habits was VERY helpful to me. It's based on Debtors Anonymous's philosophies, according to the tape label. You can get lots of ideas elsewhere on how to restructure your debt, etc., but for me the hardest part was to stop the spending, and that's where this tape helped. Very best of luck to you!! If you can get out of the hole you're in, you'll look back on it asone of the biggest accomplishments of your life.
Terri the Trainee Fool

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Author: johnmoni Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19014 of 308882
Subject: Re: My Story Date: 11/3/1999 1:12 PM
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"When we make plans to make a nice payment to the card, we realize we have to buy a birthday gift, housewarming present, father's day, mother's day, valentine's day gifts that it significantly reduces the payment. (And I'm only talking $30 dollar gifts)."

Mike,
How about homemade gifts, or gifts of your time? For instance, our birthday gift to my Mom this year was a days worth of maintenance/cleanup around her house and yard. Out of pocket cost to us was zero, and she appreciated it more than any trinket. Just a suggestion as to one way we keep the cost of gifts down. Thanks for your excellent post!
johnmoni

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Author: nbaker02 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19016 of 308882
Subject: Re: My Story Date: 11/3/1999 1:15 PM
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From one fool to another, who fought debt for a lot of years before I got the formula straight:

1) It begins with reasonable budget. Everyone I know that tried to pay off debt too quickly to the (point of deprivation) went on "spending binges". Leave some fun for yourself. You didn't overload your debt in one day, your not going to dump it in one day.

2) Prioritize debt repayment according to both interest percentage and debt amount. The experts in "interest management" will say pay off the highest interest first. However, many people have low balance cards that may have low interest rates. The point is this, you save more interest by paying off the higher rate cards. However, if your cash flow is too restricted you end up charging more anyway. When we dumped the majority of our debt we cleaned up some low balance cards which gave us the cash flow to maintain our budget. Then we focused on the higher interest items.

3) Don't charge anything. If you do, pay it back quickly. Sounds simple. However, many people do not realize how much they charge in small amounts for things for which they had the cash. For example, gas is a common item to charge. However, 5 trips later you owe $75 and the cash is gone too. Our local bank allows credit card payments through the ATM for their card with no fee. Since we "pay at the pump", every other week we pay the gas charges at the ATM. Every little charge adds up. Be diligent.

4) Don't be discouraged. The first year is the hardest. However, after the first year you create some breathing room due to reduced debts. We rewarded ourselves by increasing our budget for family fun. However, the amount we increased it by was less than the amount of payments that we were able to dump. What did we do with the extra payment money? Rolled it to another bill. By year three we still had some debt. We increased the fun money again, increased our investing money, and still kept attacking debt.

5) Do your budgets together. You got into debt together, Get out of it together. The lack of diligence of one person will offset the efforts of the other person. Both people must agree to the budget and believe in the goal...

Good luck. Hope it helps. You can do it.

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Author: jimmeador Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19019 of 308882
Subject: Re: My Story Date: 11/3/1999 1:30 PM
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Salsa
You have my unquestioned support!

I am recently (Oct 19th) divorced and my ex left me with approximately $80K in credit card debt that she ran up at the end. She also got the house with it's positive equity, she's now refinancing it or selling it. At 46 I'm getting too old to start from scratch (or below) again. So I'm treating this debt like a WAR!

I HATE the situation I'm in so for what it is worth, this is what I'm doing.

First, I'm selling my townhouse that was used as rental property. Capital gains tax or not that'll lower the debt to $50K.

Second, I'm living in a house which is up for sale in a Home Sitting program. The rent is cheaper than an apartment and you have to keep it neat all the time, but I'm not in an apartment. I had to buy a refrigerator, but got a great deal at a scratch and dent place. No washer and dryer -- I'm going to the laundromat. I keep the lights off use the air conditioning as little as possible. I don't eat out and my entertainment budget is ZERO.

Third, I've called all the credit card companies and asked them to lower the rates. Some will some won't. But I plan to call them every two or three months.

Fourth, I make slightly more than the minimum payment to all the credit card companies except for the one with the highest interest and I pay them as much as I possibly can. When that account is zero, I'll attack the next highest one.

Since my entertainment budget is zero, I spend a lot of time on the internet, researching stocks, so when I have money again, I'll know what to do with it. I've set up a imaginary portfolio with $5,000 in it to learn quickly. So far, it's up 15% since October 18th.

Personally, I think the keys are ATTITUDE and BUDGET. You have to have the ATTITUDE to get out of debt. You also have to BUDGET to get out of debt. BUT you have to have BOTH to actually GET OUT OF DEBT.

Budget and track EVERYTHING even small cash expenditures, you'd be surprised how it adds up.

I'd recommend that you budget for that little something that you and your husband want. Say every three months you save enought to get a widget. This will do two things. Satisfy the emotional need to want to spend and test yourselves as to whether or not you really want the widget after three months of saving for it. Just make sure it's an inexpensive something.

Spending is like an addiction, once you start again, it can get out of control quickly. Budgeting and sticking to it removes the addictive portion.

All my humble opinion -- Good Luck!

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Author: Amethyst7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19072 of 308882
Subject: Re: My Story Date: 11/3/1999 6:22 PM
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I found that as soon as I charged my first big item, it was easier to continue charging...We put an apartment full of furniture an other "necessities" on the card.

Spending is like an addiction, once you start again, it can get out of control quickly. Budgeting and sticking to it removes the addictive portion.

Salsaginger,

Jimmeador's advice on spending as being like an addiction is excellent. I also know that you can become numb to amount of big charges that you make over time. You can delude yourself into thinking of the money charged as not being real. What helps me is to use cash or write checks for purchases and to only buy after a cooling off period. Just curb that need for instant gratification for a so-called "necessity" by waiting a few days before you buy it. Then maybe that wonderful new "widget" will have lost some of its appeal.

Remember that the student loans can be deferred or have reduced payments if call your lender and explain your situation. This may give you some leeway in focusing on a high interest credit card or paying off the small amount of the car loan.

Also look at books on Amazon on overspending. I like "The Overspent American," "Get a Financial Life," "Your Money or Your Life," and (of course!), TMF's "You Have More Than You Think." If you find some you like, check them out of your local library.

Best of Luck,
Amethyst7

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Author: WadaPhooliam Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19101 of 308882
Subject: Re: My Story Date: 11/4/1999 12:38 AM
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I have been lurking for a couple of months now, and I don't have any specific questions,
but I thought it might be therapeutic to finally post my story. I come from a family of
debtors. My parents are so far in debt at this point, that I think they will never really
pay them off. This is while making an income in the 120's. I can't say that it's their fault
that I am now in debt to the tune of about $61,000, but it certainly didn't help that I
never learned that I couldn't have what I wanted exactly when I wanted it. I started
accumulating posessions, and the debt that went with them when I was in college. It all
began with a new computer ( I was a computer science major). However, I found that
as soon as I charged my first big item, it was easier to continue charging. When my
husband and I got married a little over a year ago, We put an apartment full of furniture
an other "necessities" on the card. We now have about $24000 in credit card debt, a
$15000 car loan, and $22000 in student loans. I feel like I'm drowning in debt and I'll
never even make a dent in it. My husband and I wanted to start a family in a couple of
years, but I know we can't even think about it until we pay off this debt. We keep going
through periods where we spend practicaly nothing, followed by period where we get
sick of feeling deprived and start spending again. I know that we need to stop spending
before we're going to get anywhere, but at times it seems we have no self control. At
this point I just thought maybe I could get some ideas and support. Thanks.


Salsaginger, your post was listed under Hot Topics and I am replying from that standpoint as I have not read what others have to say, so I'll be brief.

I would recommend that you get a copy of "Your Money Or Your Life" by Joe Dominquez and Vicki Robin. It's published by Penguin books. If you would rather borrow it from a library, the Dewey Decimal Number is 332.024 D67. It's a very good guide to getting to the point where you control money rather than having money control you.

Hope this helps.

WadaPhooliam

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Author: mphipps Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19102 of 308882
Subject: Re: My Story Date: 11/4/1999 1:39 AM
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I would add that you spend time with each other and love each other.

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Author: JasperFlint One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19103 of 308882
Subject: Re: My Story Date: 11/4/1999 2:18 AM
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Just thought I would pass this name along to you.

Dave Ramsey has a Christian based radio ministry that is heard nationwide. He is based out of Nashville, TN. He is a bestselling author of books that help people get out of debt. In fact that is what his radio show is all about.

Dave has a web-site that could be very useful to you. www.financialpeace.com. He is heard all over the country, everyday on AM radio. He also conducts get-out-of-debt seminars all over the country too.

My wife and I are debt free. In fact, we have never had a problem with living within our means. We are savers. BIG SAVERS! But it is a lifestyle choice. We get more satisfaction in knowing that we can have things than in the satisfaction of actually having them. All the while being debt free and saving for our family's future.

If you have ever spent any time at all using a growth calculator, then you know how important it is to begin saving early to take advantage of " compounded earnings". IT'S HUGE. But you have to start early because time is its biggest asset. You can find these growwth calculators on sites such as Fidelity and Quicken. They are very useful in showing people what their investments can grow into over time.

Check Dave out. He can help you.

Good luck.

jasper



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Author: johnmoni Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19106 of 308882
Subject: Re: My Story Date: 11/4/1999 7:32 AM
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"My wife and I are debt free. In fact, we have never had a problem with living within our means. We are savers. BIG SAVERS! But it is a lifestyle choice. We get more satisfaction in knowing that we can have things than in the satisfaction of actually having them. All the while being debt free and saving for our family's future."

Jasper. Excellent post!!!!! You hit the nail right square on the head. LBYM is a lifestyle choice - it is all about choices. If you want to live debt free, you need to modify your lifestyle. While all the advice out here is sound and logical, the concept is very simple: don't spend more than you earn and you'll be debt free - but it is all about choice!!!!! Thanks for your insightful post - you've got my recommendation!!
johnmoni


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Author: salsaginger Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19108 of 308882
Subject: Re: My Story Date: 11/4/1999 8:59 AM
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I just wanted to thank everyone for their advice and kind words. It means a lot. I got my quarterly bonus yesterday, and for the first time ever, my husband and I didn't run out and spend it, we sent it to Citibank!! I must admit that it felt really good to make a dent in what we owe, albeit a very small dent. We both sat down last night and worked out a budget that we both think we can live with, and my husband got his work to agree to let him work some overtime. This should allow us to put about $1300 a month towards our debt. It should take us about 2 years to pay off the credit cards at that rate, but I do get periodic bonuses and I'm hoping for a raise at year-end that should speed this up a bit. Then we can start to worry about the car and student loans. The car loan has a slightly higher interest rate than the credit cards, but right now, my husband and I both agree we are bothered much more by owing so much to the credit card companies. Anyway, I just wanted to thank everyone and I'll keep you all posted on our progress.

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Author: jimmeador Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19112 of 308882
Subject: Re: My Story Date: 11/4/1999 9:25 AM
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Salsaginger,

CONGRATULATIONS on your new decisions! Keep up the good work! I'm rootin' for you.

Jim



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Author: 1cafemocha Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19121 of 308882
Subject: Re: My Story Date: 11/4/1999 9:54 AM
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First, put the credit cards away. Stop Charging. Actually, cutting all but one of them up is an even better idea. Second, start using only cash. Third, take your highest interest credit card and pay as much on it as you can. Both of you are working so you should be able to find several extra dollars to pay on that. Pay the minimum payments on your other bills until that is paid. When that one is paid, do the same to the next highest credit card and continue until they're all paid off. Then move to the car loan or student debt whichever is higher. Fourth, if you or your husband are in jobs where overtime pay is available get as much overtime as possible and use that to pay down the debt. Fifth, we all need a little fun. Make it once every couple of weeks and make it inexpensive: maybe a bargain matinee or dinner in an inexpensive restaurant. And pay cash for it. Also don't feel guilty about giving yourself an occasional inexpensive treat. As long as you are making major progress in paying the bills it's a way of celebrating your progress. I have been in debt in the past. I have done what I've told you to do. The only thing I have left is the car loan. It took time and discipline but it's such a good feeling to have the credit cards gone. And I now pay cash for everything and only carry $5 more that the amount of money I need for the day.

Cafemochas

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Author: 1cafemocha Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19122 of 308882
Subject: Re: My Story Date: 11/4/1999 9:56 AM
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First, put the credit cards away. Stop Charging. Actually, cutting all but one of them up is an even better idea. Second, start using only cash. Third, take your highest interest credit card and pay as much on it as you can. Both of you are working so you should be able to find several extra dollars to pay on that. Pay the minimum payments on your other bills until that is paid. When that one is paid, do the same to the next highest credit card and continue until they're all paid off. Then move to the car loan or student debt whichever is higher. Fourth, if you or your husband are in jobs where overtime pay is available get as much overtime as possible and use that to pay down the debt. Fifth, we all need a little fun. Make it once every couple of weeks and make it inexpensive: maybe a bargain matinee or dinner in an inexpensive restaurant. And pay cash for it. Also don't feel guilty about giving yourself an occasional inexpensive treat. As long as you are making major progress in paying the bills it's a way of celebrating your progress. I have been in debt in the past. I have done what I've told you to do. The only thing I have left is the car loan. It took time and discipline but it's such a good feeling to have the credit cards gone. And I now pay cash for everything and only carry $5 more that the amount of money I need for the day. It does work!!

Cafemocha

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Author: shenfool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19133 of 308882
Subject: Re: My Story Date: 11/4/1999 11:19 AM
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First of all get a financial planner who will open up your eyes about what you are doing to yourself. It is much worse than you realize. I doubt you are planning for retirement if your credit card debt is up there.

Credit cards are for emergencies. Lock them up in the safety deposit box and only use them if something horrible happens like a relative dies or your air-conditioner dies. The only kind of plastic you need is a visa debit card which deducts the money from your checking account. When you're out, you're out.

Never buy a new car again. Millionaires often drive used cars and do not buy the most expensive house that they can afford. Buy used furniture. My house is full of yard sale stuff. And I have no debt.

Do you want to get out of debt? Then try rice and beans. You do not deserve entertainment! You have already had more than your share! Time to payback, or declare bankruptcy, and frankly your reason (being irresponsible) is not good enough for you to declare bankruptcy. You have to have a real crisis in your life.

I'm not trying to be mean, and I don't want to be soft on you, it's just that I've been there, and now I'm wealthy and I can see, that when you do not have credit cards you will be able to afford to buy much more than if you are buying the item plus the interest.

Regarding having kids, if you don't get a financial plan now you can pretty much count on them pumping gas because you won't be able to afford to send them to college. You're just living for today. How do you want to live tomorrow, and how do you want your family to be tomorrow? Do you want to retire on almost nothing? Many people are trying to retire on 15K a year. Will that make you happy?

Pay off your highest interest rate cards first in order of the highest rate. Do not keep savings, they will cost you more than you will earn. Then, once you are out of debt, be sure that your cash on hand is earning you the most interest possible. You can get unlimited check writing for 5K initial account, 5.28% money market interest, $80 fee per year, at Morgan Stanley Dean Witter. (Do not borrow to open it). Earning 1.5% interest is actually completely eroded by inflation.

Shenfool

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Author: findfish Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19135 of 308882
Subject: Re: My Story Date: 11/4/1999 11:20 AM
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I felt very sympathic to your story since I divorced two years and am going through the same thing (and I'm currently 46!). There's something wrong with starting over at 46, and the bitterness at that aspect of the game has been my worst enemy. I, too, recently decided my finances were a war that I must win and win quickly. I'm currently looking for another job and when I find one I'm going to cash in my 401k to pay off some debt (if I don't it will never go away).

Good luck! I hope it makes you feel a little better to know you aren't alone. (And to make my divorce worse I put my ex through 4 years of grad school and he's now making three times as much money as I am!)

DEBI

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Author: Tyshaun Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19142 of 308882
Subject: Re: My Story Date: 11/4/1999 11:50 AM
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There is not much that I can say. You seem to be doing the right thing. The only thing that I can suggest is perhaps get a part-time job so that you can pay off your credit cards sooner. The longer you have that
debt the more you are going to be paying on it. You could take that money to pay off your credit cards, and have a little entertainment money. However, I do advise you once you get out of debt, do not go on a spending freenzy. Only have one credit card, and use it for emergency. Also invest like you plan to do after you get out of debt. I know that it will ne hard, but living below your means is not as bad as it sounds.


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Author: jcabrera Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19143 of 308882
Subject: Re: My Story Date: 11/4/1999 11:56 AM
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Very, very bad idea to cash your 401K to pay off your debt. It will cost you about 40% of the money you have in the 401K because of taxes and penalties.

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Author: zwithapgb Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19147 of 308882
Subject: Re: My Story Date: 11/4/1999 12:09 PM
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It's good to see that jimmeador has a strong plan for getting out of debt, but I think it bears discussion about how he wound up in this state in the first place.

I don't know what state he lives in, but it concerns me that his wife gets all the assets, while he gets all the liabilities.

If she ran up debt just prior to the decree in order to saddle him with it, he should be able to petition the court to have her take on at least some of the burden. That strikes me as a worthy move that could have some very short-term benefits.

I know divorce is traumatic, but the financial aspect of it should be dealt with just like any other transaction. That means making sure you don't get screwed.


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Author: NaggingFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19155 of 308882
Subject: Re: My Story Date: 11/4/1999 12:40 PM
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Salsaginger-

You can do it! Congratulations on your new determination and your new plan.

From your original post, it sounds like you've tried before and slipped back into charging.

I recommend that you absolutely positively stop using the credit cards until you feel you can trust yourself with them. Your first step has to be "stop accumulating debt".

Consider putting each card in water and freezing it. This allows you to use the card in an emergency, but you have the time when the card is defrosting to consider whether or not you really need it.

If you do a lot of travel or other transactions requiring credit card, either use a debit card, or get another credit card with a low limit that you pay off every month (to avoid paying finance charges on your new purchases).

And don't forget to call your companies and try to get the rates lowered!

Good luck!!!!

-Megan




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Author: OCEANS7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19162 of 308882
Subject: Re: My Story Date: 11/4/1999 12:58 PM
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Well my friend first let me offer my sympathy for your current situation. Having said that, lets talk about really winning the WAR you are about to undertake. Unless you have a really great job, your going to be in debt for a very long time. So, call everyone and make a settlement deal on the balance or tell them your going belly up and they will get nothing. Offer $.20 cents on the dollar. If your worried about your credit , Don't. BE SURPRISED WHO WILL LISTEN TO YOUR SAID STORY AND OFFER CREDIT. If all else fails send in $20.00 mo to each co.
Next and formost, find a women with a little stach-- and move in. Women love to help the needy.
The most important thing is--- BE HAPPY. Spend on anything that makes you happy. Within reason of course. This life comes around ONCE. If you don't enjoy it now, chances are you won't have another chance
There is no debtors prison anymore. If you are basically a good person, GOD will forgive your little indulgences. Wish you the best of luck and happiness.
And don't forget to :-) smile


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Author: JackieInAustin Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19180 of 308882
Subject: Re: My Story Date: 11/4/1999 1:58 PM
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Next and formost, find a women with a little stach-- and move in. Women love to help the needy.


Wow OCEANS7, it's hard to believe you really meant to write that. Perhaps a more appropriate thing to say would be, "find a roommate to help share expenses".

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Author: tadi Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19181 of 308882
Subject: Re: My Story Date: 11/4/1999 2:10 PM
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In re: "Next and formost, find a women with a little stach-- and move in. Women love to help the needy.

Wow OCEANS7, it's hard to believe you really meant to write that. Perhaps a more appropriate
thing to say would be, "find a roommate to help share expenses". "
______________________________________________________

NO DOUBT!!! As a woman I am highly offended by that remark. I am focused on helping myself right on out of debt and don't intend to take on someone else's debt problems anytime soon. Especially not those of an able-bodied man with no excuse. I can't imagine people on this board encouraging anyone to become a moocher and suck the life out of another person as a solution to their own financial problems.

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Author: katrinalarsen Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19201 of 308882
Subject: Re: My Story Date: 11/4/1999 3:04 PM
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Sorry for your tribulations - but could you tell me more about the home sitting program?

I have some friends who could use it.

They have homes for sale and have moved elesewhere, as I would in your situation.

Blessed Be!

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Author: dav37id Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19233 of 308882
Subject: Re: My Story Date: 11/4/1999 6:04 PM
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your approach is a good one. i did a very similar thing about 15 years ago, for exactly the same reasons. i ate little, had no social life that required much money. I rented a movie now and then, and served dinner/bbq at my place. it worked.

the only thing i can suggest, is to get a part time job if you can (the markets hire courtesy clerks at about $6/hr, and the hours are really flexible. The extra money can be used to speed up debt repayment which is what i did, or, you could use it to invest. Since you have no social life, it's an idea, and it's easy.

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Author: tadi Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19239 of 308882
Subject: Re: My Story Date: 11/4/1999 6:54 PM
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or you can get a great part time customer service job making 10+ an hour...

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Author: RENEEMC Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19261 of 308882
Subject: Re: My Story Date: 11/5/1999 12:01 AM
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Hi there, after 10 years of constant battle with my husband over spending and living in a hole that needed paint and maintenance, I filed for divorce. He started to get his act together and part of our reconciliation was that he pay part of the bills, he always gave me his check, but would spend over what he gave me on credit cards, one way or another. So, he started paying "his" bills, which were a new Harley Davidson, the bike insurance, and once in a great while the gas card that used. I went off the deep end and "If you can't beat 'em join 'em thing. And I got involved in a MLM scam. I went from only a $75,000 mortgage to $26,000 in credit card debt, plus whatever my husband has on his charge cards.
I thought it was the end of the world, but I signed up with ACCC and though I thought it would hurt my credit, I have received to date two new cards that I don't want! My husband knows nothing of this other debt that I have paid down with my own earnings, however I am not proud of my attitude during that trying time nor would I go out and intentionally charge to put another in a bind. I just had a bad six months back in 1996 and it has taken until now to see clearly. I wish the best to you and hope all turns out, ACCC helps negotiate the debt to zero interest with a $25.00 per month donation. That' it! Watch your tax return for as much as you can maximize in deductions with the rental(s) and write offs and pay as much as you can back and, like me in two years you will be FREE! Good Luck!!!!!

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Author: legantcltr Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19263 of 308882
Subject: Re: My Story Date: 11/5/1999 12:20 AM
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Hello Fellow Fools!

Credit Cards, bah hum bug! It is comforting to know that others are in the same boat (maybe its a ship).

I am also in hugh credit card debt, due to bad business decisions and a divorce (guess that would be bad personal decisions, huh?). It is really tough to get credit card companies to work with you, however, some of them will. One company will only work with you if you have been 90 days deliquent. Others aren't very nice.

I guess that biting the bullet is the only way to dig out. I only hope that I live that long.

The real pits, is that it makes it very difficult to buy a house or any other tax write offs.

However, I am thankful that I have a good job and good health, those two things, even good credit can't buy.



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Author: jeroboam999 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19290 of 308882
Subject: Re: My Story Date: 11/5/1999 12:16 PM
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My man, just one quick suggestion for you. I think if
you approach your friendly neighborhood banker and tell
him your story, he will be surprisingly accommodating.
Ask for a consolidation loan, Which should be set up on
fairly flexible terms at a much lower interest rate than the average of your different credit cards. You have the added benefit of a single payment stream to manage, and you can CUT UP ALL THE CARDS except the one with the lowest rate. Good luck, mate

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Author: TAXMAM Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19294 of 308882
Subject: Re: My Story Date: 11/5/1999 1:02 PM
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jimmeador


Wait before you sell that townhouse and take a hit on capital gains. If you live in it for two years you can sell it as a personal residence and take up to $250K profit tax free. You need to take into account the adjusted basis from depreciation taken when calculating the profit. Run this alternative by a good tax preparer (like me) or someone who can read IRS speak. You could even have it on the market while living in it. You could rent out the bottom floor, live in the top floor and share the middle floor. Attacking your problem is a good way to get out of debt but remember there are many ways to skin the tax cat.

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Author: Catleen Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19307 of 308882
Subject: Re: My Story Date: 11/5/1999 3:57 PM
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I was also deeply offended.

Catleen

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Author: brick8952 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19324 of 308882
Subject: Re: My Story Date: 11/6/1999 2:18 AM
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salsaginger:

I'm in the same boat. Too much debt, not enogh income. What I did is contact Consumer Credit Counseling Inc. For $20 a month, they'll sit down with you and go over how much you can afford to pay toward your credit card debt each month, negotiate with the credit card companies to reduce the interest rate on each card and set up a monthly payment for all the cards that you can choose to have automatically withdrawn from your checking account each month. They seem to have some clout with CC companies. Citibank's rate went from 18% to 8%, Discover's went to 0%, and two other banks reduced their rates. You might want to try it.

But everybody else is right. You've got to cut up the cards and live without them. You can get a debit card to use for situations where you need a credit card (car rentals, etc.), but lose the cards!

Good luck

Brick8952

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Author: jimmeador Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19703 of 308882
Subject: Re: My Story Date: 11/12/1999 12:35 PM
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Some responses to past posters.

TAXMAM

Good advice indeed! However, the real estate market is on fire here and it might not be a couple of years from now. Following my approach I'll get out of debt 18 months earlier despite the capital gains. It's now emotional with me to get out of debt. My townhouse is not splittable into different living areas and needs a lot of work. Thanks for your very credible input.

Katrinalarsen

The home sitting program I found by looking in the "for rent" sections of the newspaper. Look for ads like "Have nice furniture? Low rent." I found this ad on a Sunday and moved in the next Friday.

Zwithapgb

Thanks for your input as well. My ex was and is bipolar. I "gave" her the equity in the house as a safety net for her despite her filing and locking me out. She doesn't work and I did this for me. I do have my townhouse which I'm selling to pay off the debts incurred 90% by her. I just want to get on with life. She did get, by far, the better deal.

Thanks to all for your input, suggestions and recommendations.

Jim

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