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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308451  
Subject: Over my Head in Debt! Date: 10/25/2006 6:23 PM
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Greetings everyone! I've been reading the boards over the past couple weeks and been trying to figure out what I'm going to do with my credit cards! My wife and I have gotten in way over our head. I have 5 people in the house including myself so its hard to cut certain things.

First let me post my numbers and then a rough budget of what we are  spending monthly. 
CREDIT CARDS
Credit Card Limit Balance Interest Rate Min Payment 
Chase - Amazon $13,000.00 $14,617.08  29.99% $3,468.08  
Chase - National Geographic $15,300.00 $16,261.89  29.99% $2,575.89  
MBNA $32,800.00 $8,195.98 14.99% 136 
Sears $725.00 $626.80 32.24% $67.77  
Sears Plus $900.00 $1,473.71 0% Promo until 02/01/07 $0.00  

2nd Mortgage $65,000.00 $62,832.36 8.00% $788.63 
Budget
Mortgage $1,798.00 
Teco Electricity $300.00 
Pasco County Utilities $115.00 
Verizon Fios Internet $39.95 
Verizon Fios TV $50.00 
Verizon Wireless $160.00 
Verizon Vo-IP Phone $30.00 
Pool Service $80.00 
TruGreen ChemLawn $50.00 
GMAC - Tahoe $682.72 
GMAC - Cobalt $199.01 
Car 1 Gas $130.00 
Car 2 Gas $200.00 
Groceries $500.00 


My car insurance is deducted via my paycheck automatically and is $ 72.69 a paycheck.

We got a nasty letter in the mail from Chase because we have missed our min payments over the past couple of months. Basically the letter told us that "As a result, they demand immediate payment of the entire balance"!!! "If you fail to make payment of the entire balance, Chase has the right to start a lawsuit against you." "If a judgement is entered against you, your salary could be garnished.". 

We have been struck with some hard times over the past several months. Our AC unit died (and in Florida that is BAD), and we had to have it replaced (air handler and all) which struck us for $7,000! We've had other things happen such as a tire blowout, a fridge dying, and also our Washer/Dryer dying. Most of the rest of the debt is due to a lot
of repairs and home improvements we have made to the house. New fence, sprinkler system, lawn completely re-sodded, etc. Also we just refinanced the house. We had an adjustable rate and the interest rate shot up to 9.25% and increased our payment to almost $2200!!! The mortgage payment above is the new refinanced payment (which btw is at a fixed 6.25% for 30 years). We tried to consolidate the 2nd mortgage with our new one, but the ratio wasn't there for it.

My wife and I have been really cutting a lot of our previous budget to come up with the one above. We have NO family in Florida so we do a lot of long distance calling. I dropped our landline phone line ($75 a month) in favor of the Vo-IP service which saves us quite a bit.  We also just lowered our Cable TV bill down from the premium channels ($120 a month) to the basic $39.95 deal. Also of note my Internet service is reimbursed through my employer. 

Is there anything we can do at this point?? There is no way I can catch up that kind of min payment from either of my Chase cards. I was late on the MBNA one and the Sears card, but managed to get both of them caught up this past weekend. I'm really worried about what to do about Chase.  If you need more numbers let me know. I'm sooo stressed out!

Any help is appreciated.
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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239756 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:32 PM
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Recommendations: 10
Greetings everyone! I've been reading the boards over the past couple weeks and been trying to figure out what I'm going to do with my credit cards! My wife and I have gotten in way over our head. I have 5 people in the house including myself so its hard to cut certain things.

First let me post my numbers and then a rough budget of what we are spending monthly.
CREDIT CARDS
Credit Card Limit Balance Int Rate Min Pmt
Chase - Amazon $13,000.00 $14,617.08 29.99% $3,468.08
Chase - N Geo $15,300.00 $16,261.89 29.99% $2,575.89
MBNA $32,800.00 $8,195.98 14.99% 136
Sears $725.00 $626.80 32.24% $67.77
Sears Plus $900.00 $1,473.71 0% 02/01/07 $0.00
2nd Mortgage $65,000.00 $62,832.36 8.00% $788.63

Budget
Mortgage $1,798.00
Teco Electricity $300.00
Pasco County Utils $115.00
Verizon Fios Internet $39.95
Verizon Fios TV $50.00
Verizon Wireless $160.00
Verizon Vo-IP Phone $30.00
Pool Service $80.00
TruGreen ChemLawn $50.00
GMAC - Tahoe $682.72
GMAC - Cobalt $199.01
Car 1 Gas $130.00
Car 2 Gas $200.00
Groceries $500.00

My car insurance is deducted via my paycheck automatically and is $ 72.69 a paycheck.

We got a nasty letter in the mail from Chase because we have missed our min payments over the past couple of months. Basically the letter told us that "As a result, they demand immediate payment of the entire balance"!!! "If you fail to make payment of the entire balance, Chase has the right to start a lawsuit against you." "If a judgement is entered against you, your salary could be garnished.".

We have been struck with some hard times over the past several months. Our AC unit died (and in Florida that is BAD), and we had to have it replaced (air handler and all) which struck us for $7,000! We've had other things happen such as a tire blowout, a fridge dying, and also our Washer/Dryer dying. Most of the rest of the debt is due to a lot
of repairs and home improvements we have made to the house. New fence, sprinkler system, lawn completely re-sodded, etc. Also we just refinanced the house. We had an adjustable rate and the interest rate shot up to 9.25% and increased our payment to almost $2200!!! The mortgage payment above is the new refinanced payment (which btw is at a fixed 6.25% for 30 years). We tried to consolidate the 2nd mortgage with our new one, but the ratio wasn't there for it.

My wife and I have been really cutting a lot of our previous budget to come up with the one above. We have NO family in Florida so we do a lot of long distance calling. I dropped our landline phone line ($75 a month) in favor of the Vo-IP service which saves us quite a bit. We also just lowered our Cable TV bill down from the premium channels ($120 a month) to the basic $39.95 deal. Also of note my Internet service is reimbursed through my employer.

Is there anything we can do at this point?? There is no way I can catch up that kind of min payment from either of my Chase cards. I was late on the MBNA one and the Sears card, but managed to get both of them caught up this past weekend. I'm really worried about what to do about Chase. If you need more numbers let me know. I'm sooo stressed out!

Any help is appreciated.


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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239757 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:32 PM
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Oops, I meant to include a note that I reformatted that for you but I hit the submit button instead of preview; hope it came out okay.

Minxie

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239758 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:38 PM
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Thanks! I dunno why it came out like that. I hate being
the newbie. :) I wanted to add that I got a copy of
Quicken 2007 to help me track everything and have been
trying to learn it and input things. :). So there is
a start....

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239759 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:41 PM
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I forgot the most important part! Our total net income = $5,500.00 a month.


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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239760 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:47 PM
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Okay, for Chase since they are calling their bill due...do you have a BT offer on your MBNA card? You usually do and it may even be relatively low. If you do (and I suspect you do since your MBNA rate is still low), you have plenty of room to move most of the Chase balances to the MBNA card. This does not pay off your cards; it only shifts your balances. This is a temporary band-aid, not a permanent solution.

How much of your internet bill is reimbursed by your employer? Whatever isn't, you can't afford. The same for your cable, cell phones, pool, and lawn service. You have other cash going out that you don't have listed; where is your spending money, for instance? Your wife's car insurance? Your home insurance and taxes? Are they rolled into your mortgage note? Unless you are selling your house, you need to stop making improvements to it until your debt is paid. If you don't, you will continue to dig your grave.

You have 5 people in your home; does everyone who can work do so? What is your current monthly net income? Are the vehicles leases or purchases? Can you refinance those? Sell them and buy used? Do you even need two cars? Could you get by with one for awhile?

Please supply more info about incomes and situation. Please also look into the BT with MBNA; you don't want to have huge penalties stacking up and it looks like both your Chase cards are already overlimit as well as being due and payable.

Minxie

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239761 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 6:51 PM
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I hate being the newbie. :)

No worries, everyone's new once! ;-)

When you post a table, use < pre > before just the table and < /pre > after the table part instead of the table checkbox below. Don't put in the spaces; I put them in only so you could see what I was typing. You can also click on the preview button to see if you have it the way you want before submitting.

Also:
italics use "i" instead of "pre"
bold "b"

Minxie

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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239764 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 7:17 PM
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Jon,

Minxie did a great job of summarizing the question the board is likely to ask.

However, I want you to realize that getting out of debt is going to take a long & hard struggle by you and your whole family. You should begin to relay your current financial situation to your family and try to get them on-board with your efforts.

Often it's this internal emotional & habit struggle (& not fine tuning your efforts) that determines whether your efforts to get out of debt are successful.

Your very first goal will be to get your monthly cashflow into the black again. Only then can you begin to payoff the debts.

Most likely you'll have to sacrifice all or most of the luxuries you're currently paying for. If it's any consolation at all, many (perhaps most) of the population of this board have made similar sacrifices too. Most of the population of this board is currently paying off debt (including me) or paid off their debt at some point in the past.

We're all pulling for you!!

Jim



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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239766 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 7:28 PM
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Welcome, Jon. I hope we don't scare you off.

Wow, you are in over your head. You need to increase your income and decrease your expenses immediately. Without the credit cards, you have listed $5124 in expenses per month vs. a $5500/month income, and there are a lot of expenses that seem to be missing, like all those 'emergencies' that put you in a bad spot, health insurance, medical co-pays, kid's school activities, lunches/snacks at work, other eating out, etc. Adding in the credit card minimum payments, even if you had non-penalty payments on the Chase cards would probably bring your minimum monthly outgo to over $5900.

You need to start tracking, to the penny, all amounts that are being spent on anything, so that you can get a true idea of what your budget is. (Hint - $500 for 'groceries' is not detailed enough for your current circumstances.)

Immediate fixes - Eliminate all non-vital services - FIOS TV, cell phone, pool service, Tru-Green ChemLawn. That will save you $380 a month. Quit fixing anything on your house unless it's life-threatening or will cause further damage, like a water pipe break. And yes, people did live in Florida before the advent of A/C, so in your circumstances, although it would have made things uncomfortable, it was a poor financial decision to fix the A/C.

Longer term fix - Get rid of the Tahoe, completely if possible. If not, get a smaller, more efficient, older Civic or Corolla or something similar. All it has to do is provide basic transportation.

As Minxie has already mentioned, the fact that you have credit available on your MBNA card at a relatively lower rate should be able to help you to some degree with Chase - By transferring $10k or so from each of the Chase cards to the MBNA card, you will be able to stop the legal and collection actions. Beware, the additional $20k on your MBNA card will probably increase your minimum payment to nearly $500, which is why you have to increase your income or decrease your expenses in other areas.

Do you and your wife have multiple jobs each? If not, you both need to start looking for additional employment.


AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239767 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 7:45 PM
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Jon, I was stumbling through a response when aj said most of it for me.

You would need to double your income in order to make headway on that debt.

You've said that there are five of you in the house. Are we talking huband wife three young children, or is this some other arrangement? Because you are at a point where every person who is capable of earning an extra penny needs to do so. If you have to get up before dawn to take a third job delivering newspapers, then so be it. If there is a third adult taking care of the children while the other adults work, then that third adult needs to take on some extra baby-sitting work. And everyone in the house who is old enough to do basic math needs to understand the situation.

Nancy
suddenly grateful for putting up with a lesser lifestle.

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239771 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:00 PM
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Actually, yes I do have BT offer on my MBNA card. It's a promotional 3.99% APR through April 2007. So should I just write myself a check and deposit it at my bank and then pay the Chase cards? How much should I use as a band-aid amount?

100% of my Internet is reimbursed by my employer. So that isn't a problem. As for the cable, we just cut that down... I'm not sure we could get away with no cartoons for the kids. They would be cursing our name :). We are locked in a 2 year contract with the cell phones, but I'm sure we could cut that one down more. We are also in a 1 year contract with the lawn service. As for the pool, I have no idea how to clean it, hence I hired it out. I guess I could learn though, but there would be startup costs (pool skimmer, chlorine tablets, and whatever else I would need to clean it).

There's really not a lot of other cash going out. We don't really go out and do anything. We have been spending around $200 or so a month in eating out for lunch at work. That's about it. My wife's car insurance is included in the figure taken out of my paycheck - $ 72.69 that's for both cars.

Our homeowners insurance and taxes are rolled into my mortgage note. It's about $450 a month of my mortgage payment.

Of the 5 people in the house, yes both of us work the kids aren't old enough yet (10, 9, and 3 years old). The current montly net income is $5500 a month. The $199 car is a 5 year lease and the other is upside down its worth $23k and we owe $32k on it. I dunno if I can refinance the car or not. My FICO score has been killed by the late payments. It's now 519. The sad thing is that it was at 723 on 8/7.



You have other cash going out that you don't have listed; where is your spending money, for instance? Your wife's car insurance? Your home insurance and taxes? Are they rolled into your mortgage note? Unless you are selling your house, you need to stop making improvements to it until your debt is paid. If you don't, you will continue to dig your grave. I don't think we could get by on 1 car. We both work different hours on different parts of town.

Should I look into CCCS or something at this point?

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Author: doublemann Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239774 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:11 PM
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Jon....

Its time to take the offensive on this issue, and we know you can!

1. I agree with the prior postings to transfer as much of the higher interest rate CC debt to the MBNA card. Before doing so, I would contact the cc companies that you are planning on transferring and try to negotiate some sort of reduction in the outstanding amount, principle, etc. The worst that can happen is they say no....but they probably won't.

2. Call all of the remaining companies and negotiate reduced interest rates with each of them. Tell them your situation and that you want to work through it with them but if they are unwilling to do so, you will be forced to review other options...this should be a negotiating tactic..I am not advocating BK.

3. Eliminate the remaining variable expenses from your budget (pool, lawn, etc). That will give you money from which to pay down debt and start saving.

4. Cut up all the credit cards and do not use them again until you have this under control. If you are unable to do that, I suggest giving them to a close friend and telling them to do it for you.

5. Next, find alternative sources of income for a short time until you get this under control.

6. Your future focus, in addition to paying this debt off, must be on establishing disciplined spending habits AND a short term savings account. Most people who are working themselves out of debt fail to recognize that sooner or later, they will need to pay for an emergency expense. If you don't have savings, your only choice is to use the cc....I would suggest that after you have done the above steps and gotten 3 - 6 months into your debt reduction plan, you immediately begin setting aside savings for this issue.

We look forward to rejoicing with you when you have this problem whipped!!!!!

as

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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239775 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:12 PM
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Jon,

You are going to get a LOT of advice on what you should cut out. Be aware that all of these suggestions are ultimately up to you and your creditors. We're going to give you a bit of tough love and challenge some of your basic assumptions about what's a luxury and what's a necessity!

Here's a thread from another newcomer to this board. He was in a similarly dire situation. Reading through his posts & responses will help you tremendously in figuring out what you'll need to do.

I put your numbers through a spreadsheet to figure out your situation. As AJ pointed out, you're overspending aka you have negative cash flow and are getting into deeper debt with each passing month. The longer you wait to take the necessary actions, the worse shape you'll be in!

Some points to ponder:

Item % of Income
Mortgage 33
2nd Mortgage 14
Tahoe payment 12
Chase N Geo 10
Chase Amaz 9
Groceries 9

FWIW, you're paying 24% of you take home pay just on the interest of your CC debt + 2nd mortgage. You have CC debt equal to ~65% of your annual take-home pay and the 2nd mortgage equals ~100% of your take-home pay.


Here's my first cut at where you can improve your monthly cash flow:

Sell Tahoe, buy beater car $ 682.72
BT Chase1, Chase2, Sears to MBNA $ 273.12
Cut Wireless to minimum $ 110.00 (it'd be better if you cut it out entirely!)
beater car gets better MPG $ 100.00 (FREE if you trade the Tahoe for a beater car)
Cut out pool service $ 80.00
Cut out Fios TV $ 50.00
Cut out Chem Lawn $ 50.00
Reduce power usage (esp AC) $ 30.00 (this could be a LOT more).
Switch from Broadband to dialup $ 28.00
--------
Total $1403.84

If you're able to perform the BT from Chase1 & Chase 2 to MBNA then you'll also take care of the $6000+ that's immediately due. Note that a BT in this case is (as others have already note) just rearranging the deck chairs on the Titanic. If you don't take drastic & immediate action to cut your expenses & increase your income, you'll go down with the ship and drag your family down too!

If you can & will sell the Tahoe & get a beater car, you'll also pay much less in auto-insurance.

Get your family on board & some more income coming in!

Good Luck!

Jim





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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239776 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:13 PM
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Drat, I omitted the link:

http://boards.fool.com/Message.asp?mid=24687052&sort=whole#24713501

Jim

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239777 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:13 PM
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As for the cable, we just cut that down... I'm not sure we could get away with no cartoons for the kids. They would be cursing our name :).

They're kids, and unless they are paying for the cable, they don't get a vote.

You are in deep financial difficulty. You need to find a way to dig out of this hole, or you'll be trying to figure out how to put food on the table and a roof over their head. A lot of good having cartoons will do at that point. The cable needs to go, and you'll have to get used to network tv. If the kids want movies or cartoons, go to the library and borrow them.

You cannot afford any discretionary expenses at this point, and you have many.

We are locked in a 2 year contract with the cell phones, but I'm sure we could cut that one down more. We are also in a 1 year contract with the lawn service. As for the pool, I have no idea how to clean it, hence I hired it out. I guess I could learn though, but there would be startup costs (pool skimmer, chlorine tablets, and whatever else I would need to clean it).



Cut the cell phone down to the minimum that you can. Find out if the lawn service can be deferred until next summer so that you're not paying for that now. Learn how to do the pool maintenance yourself. Better still, close it up for the season. Yes, I know you're in FL and can use the pool year round, but it takes money for things like chemicals and maintenance not to mention the added expense of the electricity to run the pool filter. You cannot afford it at this point.

Turn the a/c up during the day. At this point in the season, do you even need it at all? Can you open the windows instead?

We don't really go out and do anything. We have been spending around $200 or so a month in eating out for lunch at work. That's about it.

Again, you cannot afford $200 for lunches every month. Pack your lunch from home to cut that down.

Check around in some recent threads for other suggestions on cutting things back as this has been a hot topic recently. Check out the Grocery Game to get the grocery bill down as that seems to be useful to alot of people. Make sure you're buying raw ingredients and not convenience foods to drive the bill down as well.

Visit thrift stores for any new clothes the kids may need as they grow. Minimize your driving with those large vehicles to keep your expenses down.

Who watches the kids while you and your wife work? If the oldest is 10 and the youngest is 3, it seems to me you need some sort of childcare, but I don't recall seeing that expense in your list.

I noticed that it looked like you were over limit on several cards, so that needs to be addressed or you're going to get hit with additional fees which you cannot afford right now, so you have to do whatever you can to bring those amounts under the credit limit. Both you and your wife need to look at both decreasing expenses and increasing income. As the holidays approach, there are more seasonal job opportunities. Speaking of the holidays, yours will need to be lean this year. The kids will understand but you need to explain it to them as best you can.

I'm sure others will have more advice on things you might be able to try that will help.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239785 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:48 PM
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I absolutely know how awful it is to come here and have everyone picking and pounding on you (my initial thread on this board was over 250 posts long - at our worst we had almost $165k in credit card -- down to about $51k now). Please don't get scared away. I commend you for being here.

Having said all that, I do have comments. Before I get to the little stuff let's start with the big one:

You can't afford your house. Get rid of it

Having said that, I realize I don't know all the facts and maybe there are issues I haven't considered.

But on the face of it you can't afford the house and it is bleeding you dry. Why do I say this?

1. You are paying 47% of your income to the mortgage, insurance and taxes. I suspect that with other house related expenses (yard, pool, etc.) that you end up over 50%. Given your other debt, even if you could afford the house when you bought it you can't afford it now.
But, I suspect you could not afford this house from the get go. Why?

2. You started out with an ARM. That is often a clue that someone had to get an ARM in order to qualify for a loan. Now, maybe not in your case, but I do wonder.

3. You have gone into huge debt because of your house. You yourself blame most of your financial problems on matters related to essentially house maintnenance. If you can't afford to maintain a house then you can't afford the house.

So...I would be looking into selling the house. If you have any equity in the house after paying off the loans then you can use that money to pay off some of your debts. (That is what we did). If you don't then selling the house at least allows you to rent some place cheaper.

General comments on everything else (although I think the above is the big point). Agree that the MBNA transfer is a good idea.

Budget things to consider:

Car maintenance and repairs - we all have these and they can blow a whole in any budget. BTW, on the car that is upside down can you talk to the lender about letting you sell the car and then perhaps paying out the deficiency over time? You can't afford that car.

Children's expenses - you have 3 children but no expenses related to your children. I have 3 children. What about kids's clothes, activities, school supplies, medical care, etc. Kids are not free and I have the debt to prove it. You are kidding yourself not including their expenses in the budget.

What about clothing, dry cleaning, personal care, health copayments, prescriptions? What about computer related expenses, stamps, paper? I am not saying you need to be paying all these but your money has been going somewhere and I'm sure some of it is going towards these things.

$200 a month for lunch eating out? You can't afford it, make a sandwich and take it?

Basic TV and cartoons for the kids? No, they won't like losing them. They will like it even less if you end up with your home foreclosed upon when you start missing mortgage payments or when you can't afford food.


But all of this at the end is trivial compared to the cost of the Money Pit house.




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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239786 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 8:53 PM
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You yourself blame most of your financial problems on matters related to essentially house maintnenance. If you can't afford to maintain a house then you can't afford the house.

I'm only sorry that this can't be forcefed to every aspiring home owner.

Nancy
okay, I can't afford a house. So I'll save my money for retirement.


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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239787 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:00 PM
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Actually, yes I do have BT offer on my MBNA card. It's a promotional 3.99% APR through April 2007. So should I just write myself a check and deposit it at my bank and then pay the Chase cards? How much should I use as a band-aid amount?

Um, ask MBNA for their best offer interest rate that's *for the life of the balance*. Even if it's 7 or 8%, if it's for the life of the balance, ocme April 2007 you won't be freaking out about the thousands of dollars on your MBNA that is going to jump to a higher interest rate.

Of the 5 people in the house, yes both of us work the kids aren't old enough yet (10, 9, and 3 years old). The current montly net income is $5500 a month. The $199 car is a 5 year lease and the other is upside down its worth $23k and we owe $32k on it. I dunno if I can refinance the car or not. My FICO score has been killed by the late payments. It's now 519. The sad thing is that it was at 723 on 8/7.

This totally made my heart sink. I believe there are ways to sell a car you are upside down on, it probably means taking a loan from your MBNA and using part of it to get right side up on the car, so you can sell it, and use the proceeds to buy a car that runs but is much cheaper, like a $3K car, and use the rest towards paying off your Chase cards.

As for the lease...oh, boy. Maybe one step at a time, I think there are ways to break leases, but I don't know what they are.

I think CCCS is an *excellent* idea at this point, make sure you go to a reputable one, and hopefully they can get you some interest rate reductions. You're in a really bad spot, I hope all the credit cards have been frozen in grape juice in a metal pie pan at this point, to prevent further charges being made on them? Pretty please?

Cut everything you can. Sit your kids down and tell 'em you love them, and that there are cartoons on channels that come in through rabbit ears, too. Because you are in deep deep doo-doo, and everyone is going to have to tighten their belts. :-( Sorry, but true.

And if I were you, I'd start thinking what are the best ways for you and your wife to earn some extra income. Be creative. Even if she's watching the kids at certain times a day, or you are, realize you could also watch someone else's kids, and charge for that. Just try to think of everything you can--it's like your house is on fire.


--Booa

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Author: lilacinn Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239789 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:16 PM
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Cartoons are available free of charge at the library. As are books, audio books, sometimes toys, story hours and other family entertainment.

Google "frugal pool maintenance" for tips. I'm sure you could get the start-up supplies at no cost via freecycle with a few posts.

Have you culled your excess belongings and held a yard sale to raise extra cash?

Agree with the poster that people did, after all, survive in Florida and even steamier climates without air conditioning. Can you afford the electric bill? Try freecycle, friends or other cheap sources for some fans.

Just out of curiosity, what was your wake-up call? How did you develop this spending pattern and what snapped you out of it?

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Author: lilacinn Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239791 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:29 PM
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Btw couldn't help but notice that your immediate approach to solving your problem involved spending money (if you paid for the Quicken 2007 and your Motley Fool membership.) Not saying that these were necessarily bad investments but again, scrap paper,pencil and a $2 calculator from the hardware store would've been cheaper than Quicken. And much as we here like the Fool, there are free financial message boards.

You can't spend your way out of debt.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239792 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:32 PM
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Just out of curiosity, what was your wake-up call? How did you develop this spending pattern and what snapped you out of it?

I suspect that the wake up call was Chase accelerating payment of the debt that he owes. I really, really hope he has snapped out of the spending pattern but I'm not sure the OP realizes how deep a hole he is really in.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239793 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:33 PM
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About this:

I'm not sure we could get away with no cartoons for the kids. They would be cursing our name :).

You are the adult. You need to make decisions, and you need to make decisions that the children will not necessarily like.

The cartoons come in as an also-ran to protecting your family. So do a lot of other things.

If you go through Findlaw, you will find a list of which debts matter most:

http://bankruptcy.findlaw.com/bankruptcy/debt-relief-options/le12_3_1.html

Food. Medical. Housing. Heat. Water. Electricity. Transportation to work. IRS.

Those are crucial. Those are the life and death payments.

Cartoons are way, way, way down on the list. Even telephones are way down on the list.

You need to understand your priorities.

Nancy

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Author: aroneous Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239795 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 9:58 PM
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Nancy said - You need to understand your priorities.

Let me wholeheartedly agree. And then agree some more.

If I was a betting woman, I'd bet alot of the money problems stem from "making people happy" - making the wife happy with nice new {car/house/clothes}, making the kids happy with {gadgets, clothes, address}, making OP happy with {well, you get the idea}, making the Jones' happy with your level of affluence, pleasing friends/neighbors/family.......the list goes on.

As parents, you know (or at least, I really REALLY hope you know) that one of your jobs is to say no to your kids. I'd be willing to bet you're not used to saying no to them - I'd be willing to bet you don't want to make your kids mad at you.

That's all wrong! If a kid ISN'T mad at his/her parents sometimes, you know somethings wrong!!

You and your wife are going to have to be adults, make hard decision, make difficult choices, and accept that others are not going to like that (your kids, your friends, neighbors, families, etc.). You're going to have to be prepared to be mature enough to rise above the taunts, tears, tantrums, questions, well-meant pity and not-well-meant pity. Admitting you've done a lousy job with money management up to now is not easy, and fixing your past mistakes is harder still.

But SO incredibly worth it.

Hit the Living Below Your Means board, but focus on the FAQ's mostly - they get off topic way too much anymore. The early years of that board were pure gold - spend a little time reviewing and you'll see what i mean.

No one likes working more than one job, no one likes not having the stuff everyone else seems to have, no one likes admitting they have not always been responsible with money - but no one else can changs your situation but you. So you've got to work more than one job, not have things, admit your problems...........

and you can. Really.

Cancel the cell phones - yep, there's an early termination fee, but if you pay your usual monthly bill each month, you'll pay the termination fee off alot sooner than you'll pay off the contract, and that'll free up money faster. That should be your mantra - free up money to put towards debt as fast as possible.

Sell everything that isn't nailed down (except the children - just rent them out (just kidding)). If your 10-y-o wants things, he/she can earn money by raking leaves, cleaning pools, etc. Christmas should be VERY slim this year - maybe one present each for the children. A book, or a movie. Nothing expensive, because you are fighting for your lives here.

I have to agree with determinedmom, too - you should at least consider whether or not you can afford to keep your current house. It's bleeding you dry.

Leigh

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239805 of 308451
Subject: Re: Over my Head in Debt! Date: 10/25/2006 11:06 PM
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We have been spending around $200 or so a month in eating out for lunch at work
I don't know if this is within or above your $500/month groceries, but if above, this is a real opportunity. You should cut this out and take leftovers/sandwiches. This is easily possible within your monthly grocery budget. Plan ahead and pack lunch the night before. Casseroles re-heat well. Leftover roasts and chicken make great sandwishes, etc etc...

You have $400/month (+/-) discretionary income ($5500 - $5100). This is to pay for ALL items within your budget, inclusing items that are NOT listed - health care deductibles, emergency fund, newspapers, car maintenance, etc etc PLUS your credit card debt.

Put succinctly - you cannot afford $200/month for lunches at work. It's simply not possible on your income.

You need to be realistic about what is possible and what you cannot afford.

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239817 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 8:03 AM
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Actually, yes I do have BT offer on my MBNA card. It's a promotional 3.99% APR through April 2007. So should I just write myself a check and deposit it at my bank and then pay the Chase cards? How much should I use as a band-aid amount?

Another poster recommended asking if they have a BT for life rate; ask about that first. You are going to use all of the available funds at MBNA minus about $500 (to keep you from going over limit and getting that rate jacked up, too). The interest rate at MBNA is half the rate of the Chase cards so it doesn't make sense to keep the money there.

So the first order of business is to contact MBNA and ask about the BT for life. If they don't have it, use the promo offer you have. YOU NEED TO BE VERY CAREFUL; if you slip up AT ALL, they have the leeway to jack up the rate to the default (I think it's 31 or 32% @ MBNA). Still the default is what you are paying on Chase so you can at least save the interest payments for the next six months or so; lowering your rate by 27% will drop that payment a good bit.

Second, all of the contracts for nonessentials need to go. You may have to pay contract breakage fees, but which is cheaper - $150 breakage fee or $3840 ($160x24 month contract). THESE ARE LUXURIES YOU CANNOT AFFORD.

Third, get rid of the cable altogether. Send the kids outside. Get them a library card. Teach them to make mud pies. Whatever. YOU CANNOT AFFORD CABLE. Period. AT ALL. Period.

Fourth, use the MBNA to pay off the Sears card that is at 32%. It is a relatively small amount and will free up that money to pay on the Chase card. Plus, it is your highest rate card and will give you a nice psychological boost.

Fifth, CUT UP ALL of your credit cards. DO NOT keep these anywhere you can access them, for anything.

Sixth, put $500 in the bank for an emergency fund. This is only for TRUE EMERGENCIES and should not be touched otherwise. Use emigrantdirect.com or hsbc.com for the best rates; both are great online banks and will make it a little more difficult to touch that cash.

Seventh, Pay the minimums on everything except your highest rate card. Take ALL of the extra cash, if any, and apply it to that card. When that one is paid in full, DO NOT USE IT; take all of that cash plus the minimum for the next highest rate card and pay that one. Rinse, repeat. This is your snowball.

Eighth, you and your wife need second jobs. At least one of you does; you don't want to pay more in child care than you bring in from a second job.

Ninth, come back to the boards and tell us how spectacularly you are doing! :-)

Minxie

P.S. Get thee hence to LBYM; start packing your lunches, washing your ziplocs and making your own clothes from dryer lint! :-)


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Author: FiddleDeeDee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239821 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 8:35 AM
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Hi Jon,

You have gotten some excellent advice, and I hope you read every line and take it to heart.

I would also add that you make the children a part of the solution. Have a family meeting and let them know that you need their help. Ask them to brainstorm on ways to cut expenses and give them their own allowances if you don't already. This becomes a learning session for them AND the parents! Always consider each idea, and let them know you appreciate what they say. You might be surprised at how much they come through. You're family is your team; let them know that, and they will love being a part of the grownups' plans.

Hopefully, DW is as much on board about this as you are. If she is, then hooray, two heads are better than one, and you will get through this with less pain. Maybe that should be Pain with a capital "P". I hope she is reading these posts alongside of you - if not, please ask her to!

Andrea

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Author: FiddleDeeDee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239822 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 8:47 AM
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BTW -

Pool maintenance - not such a big deal, if I could do it (when I had a pool), anyone can! There is a learning curve, but once you get used to it you will have a pool as sparkling as before. :)

Chemlawn - well, be prepared to not have the "prettiest" lawn on the block when you let them go and do the work yourselves. However, you might then become like my Dear Husband, who scoffs at the lawns whose owners use those services. He would rather do the work himself and get the feeling of satisfaction it provides to have a well maintained landscape. Plus it provides good exercise for us both (I garden). :)

Andrea

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Author: greenvillewolf Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239844 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 11:27 AM
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I would drain the pool and put a cover on it. Was the pool an 'improvement'? Get rid of the lawn care contract and borrow or buy a cheap mower and do the lawn care yourself. If my fat you-know-what can do it, then anyone can! :)

Sounds like you couldn't really afford the 'improvements' when you did them.

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239847 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 11:34 AM
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Just a warning this is going to be LONG.

Wow. You guys have some great ideas. Harsh, but I needed to hear it. I'm going to try and answer as many questions as I can before I tell you what happened.

First of all, I forgot to mention in my earlier post that we are also going through some legal action with my wifes ex-husband and that has cost us about $3000 so far in legal bills and it's only half done. He hasn't been paying the medical portion of child support. They are in the middle of mediation and then a court date is being set up. This is all done with the lawyers in Indiana since that is where their divorce was final. We were using our MBNA card to pay for the whole mess. I figure we have another $3000 in attorney fees before its all said and done and that is hopefully meaning that my wife won't have to FLY up to Indiana to be in court... which would be another messy expense. Also we have to fly the kids back from Indiana during Christmas holidays this year. It's part of the current court agreement that her ex-husband pays for their way from Florida to Indiana and we pay for them to get back from Indiana to Florida.

We also pay out about $260 a month in daycare for our 3 year old. We were paying about $70 a week for the other 2 for afterschool. We told them they needed to be more responsible and get themselves on and off the bus. So we don't have to pay their afterschool anymore.

I'm going to call and cancel the Fios TV, pool service and Tru-Green ChemLawn today. I'll call the cell phone company and get it down to the basic. I'm also planning on seeing what I can do to get rid of the Tahoe and buy something cheaper. We still need a somewhat large car since there are 5 of us and a car seat. I've got the AC turned off at night and during the days when we are at work and aren't home anyway. I don't have to worry about the Internet since my work reimburses 100% of that bill since I need it for work. As for that $200 a month eating out, you are right. I just need to bag up a PB&J sandwhich and eat that for lunch instead of going out at work.

I'm going to start looking for a second job. The complication in that is my current job requires me to be "oncall" for about a week every month. Usually during that week every month, I'm sitting on calls and the PC from home working a lot. Any suggestions on that front would be great. I'm not sure my wife could get a second job, who would watch the kids? We have no family or close friends in Florida.

I've listed a bunch of things on craigslist and have sold about $250 worth of stuff so far. I plan on keep selling things as much as I can. craigslist was an awesome find on the LBYM board.

As far as our housing situation goes, we originally bought this house, which was foreclosed upon by the previous owners, for dirt cheap. We got it for $150k. About a year later after making a bunch of needed home improvements since the previous owners trashed the place before they left, we had ran up around $35k in credit cards. So we refinanced and lumped it into our mortgage now making the house a $200,000k house. We then made more improvements and went back and racked up the credit cards AGAIN to the tune of $65k, and took out a second mortgage to pay those off. Now here we are after racking up this huge amount in addition to our 2nd mortgage. When I got that nasty legal letter from Chase, It was a HUGE slap in the face. Hello wake-up call. NOW I'm finally seeing the big picture and want to make changes to my thinking. I feel it is too late though.

And that brings me to another couple of nightmares. My wife is hellbent on me finding a job back in Indiana and moving back there so we can be around our family. I would love to move home also. The problem is, finding that job. Not to mention the mess I'm already in.

DW isn't onboard with me yet either. She was telling me about 4 months ago that we needed to refinance before our adjustable mortgage went up. I ignored her and it went up as she predicted. I finally got the house refinanced, but she won't let me forget that it's all my fault. In fact, she came home last night as I was finishing up my post and then proceded to yell at me about posting our information on the internet and I got chewed out. I don't know how to get her onboard with all of this. I want to do what is right for our family and get us out of this mess.

I also realized that this all goes back to when I was a kid. My parents always threw money at problems. Both my parents grew up with NOTHING. They were both dirt poor. I guess they thought that by buying me and my sister lots of things, that it would make us happy. As an example, I had to have some bones removed from my jaw and a couple of teeth when I was in the 2nd grade. After it was done, I came home and instead of my mom loving on me, she had given me like $100 worth of toys that were all on my bed. I admit that I was excited, who wouldn't be at that age. But now that I think about it, they always just threw money at problems and that is what I've learned to do.

I want to break out of this and live responsibily. I have quite a few of Suze Orman's books but have never really taken any of them to heart. I have the will to make this all work, just not sure on the right way yet.

So... now let me get to what you all suggested. I've cut up the credit cards. That was some fun with scissors! Evil credit cards have been destroyed. I kept one, the MBNA one, just in case and have locked it up. I may even freeze it in water or grape juice like you all suggested.

I'm looking into the grocery game like someone mentioned, but can I afford it? It's $10 every 8 weeks. At this point I'm not sure if I can or not. If I really save a lot of money like it says I will, maybe it will pay for itself?

Someone mentioned doing a "emergency savings fund" of some sort so I don't have to use credit cards ever again. How much should I put into it? 5%, 10% of our monthly net? Is that wise considering the amount of debt I have?

As for selling the house, right now its a buyers market. Both my neighbors have their houses up for sale and they have been on the market now for a while. The one on the right has been on the market 7 months and the one on the left has been on the market for about 5 months now. Selling the house will take a LONG time and I would need at least $265k for it in order to pay the mortgage of $200k off and the $65k 2nd off. (not including the realtor fees).

You guys are right. I didn't account in my budget for car maint, childrens expenses - clothing, personal care, prescription drugs, dentist / dr co-payments, paper for the printer, stamps, etc. This gets worse the more I think about it.

So now this brings to my first "actions" that I have taken this morning to start trying to dig out of this CRATER I have created. I called Chase first since they have "pending legal action" against me. I first tried to see if they would settle for a reduced payment and they wouldn't budge. I then told them I might have an offer with another bank credit card to do a balance transfer and they said ok. They told me to call them back with the conf # that MBNA would give me. They also told me that since my account is in the "pending legal department" unless I get them at least $1851 by Nov 1st, then they have no choice but to let the litigation begin. I got my hopes up at this point that I might be able to pull this off.

So next I called MBNA so I could get the ball rolling with the BT. I asked about doing a BT for the life of the balance and what would the APR be for? They told me they couldn't do that. I then told them I had a 3.99% offer from them until April 2007. They told me it was no longer good but I could do a transfer at the 14.99% that I am currently paying anyway. So I thought about it and it is still cheaper than the 29.99% I'm paying with Chase and it would help me out of that sticky situation.

So MBNA put all the info in and then told me to hold they had to verify it with their supervisor. They put me on hold for about 10 minutes and then another guy came on and told me that they just reviewed my account and because I was late on 2 payments, even though I am current on the account now, that they couldn't approve it. He also informed me that after doing a review of my credit , that they were LOWERING my credit line from $32,800 to $8,900!!! That pretty much means that card is now MAXED out too!

He then said that he would send me over to a "unsecured line of credit" department. At this point I begain to panic, I started feeling desparate and went through all the questions that the "unsecured line" to apply for it. After another 15-20 minutes of gathering all the info they needed from me they told me I had been DENIED

I'm now even in an even bigger mess. Ugg. Totally don't know where to run now. I've got no way to pay Chase that $1851 by Nov 1st, I've got no way to pay for the attorney fees that's going on either and I def am confused about what I'm going to do about Christmas airline tickets let alone, Christmas itself at this point even if I cancel EVERYTHING. HELP!



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Author: wickwise Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239849 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 11:38 AM
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check out www.poolforum.com

this site is awesome....we use only bleach, borax, and baking soda to balance pool water. The only pool "chemical" to buy is stabilizer. These people will help you start from scratch and is easy and cheaper than buying all the special chemicals.

wick

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239852 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 11:45 AM
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I'm now even in an even bigger mess. Ugg. Totally don't know where to run now. I've got no way to pay Chase that $1851 by Nov 1st, I've got no way to pay for the attorney fees that's going on either and I def am confused about what I'm going to do about Christmas airline tickets let alone, Christmas itself at this point even if I cancel EVERYTHING. HELP!

You may need professional help at this point. A qualified credit counselor can work with the credit card companies to make sure your debts are under control. This organization is a good one, and there's a locator, so you can find an agency near you.

Here's the main site:

http://www.nfcc.org/

And here's the locator:

http://www.debtadvice.org/takethefirststep/locator.html

As far as getting your wife on board, tell her that there's no way you can move back to Indiana until some of the debt is paid down. It's simply impossible. You can't afford to drive there at this point, even if you had somewhere to go.

And please let us know what happens.

Nancy

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Author: mlk58 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239853 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 11:47 AM
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First of all, I forgot to mention in my earlier post that we are also going through some legal action with my wifes ex-husband and that has cost us about $3000 so far in legal bills and it's only half done. He hasn't been paying the medical portion of child support. They are in the middle of mediation and then a court date is being set up. This is all done with the lawyers in Indiana since that is where their divorce was final. We were using our MBNA card to pay for the whole mess. I figure we have another $3000 in attorney fees before its all said and done and that is hopefully meaning that my wife won't have to FLY up to Indiana to be in court... which would be another messy expense. Also we have to fly the kids back from Indiana during Christmas holidays this year. It's part of the current court agreement that her ex-husband pays for their way from Florida to Indiana and we pay for them to get back from Indiana to Florida.


Is this cost-effective? You're talking about $6,000 in legal fees, plus possible travel costs. If you win, are you going to recoup more than that $6,000? Even if you get the order from the court, is there a way to make sure he's going to pay? I know it's galling to have a deadbeat ex-spouse, but you need to think about whether it makes financial sense to be spending money on this.

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239855 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 12:05 PM
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Bird: You have to be on call one week/month during which you work at home.
Bird: Your wife can't get a second job due to no child care.

Stone: Your wife gets a second job and you watch the kids.



Problem: No way to pay Chase $1851 by 11/1

Possible Solution: www.prosper.com - individuals making loan to individuals.



Problem: Court costs and air fare for kids

Possible Solution: Tell ex you will handle the unreimbursed expenses if he will fly the kids back down.



Problem: Litigation from Chase

Possible Solution: Call them back. Tell them you can't pay and negotiate a reduced settlement. If they won't budge, tell them they'll have to sue you and stop paying them. Your credit's already in the toilet. I wouldn't recommend this action but you are in dire straits and need to think outside the box.

Caveat: I am not an attorney nor an accountant. None of the above is intended to be legal or financial advice; please consult with the appropriate counsel.


Overall I would recommend contacting CCCS at this point. They are a non-profit who can help you. DO NOT USE a company that you have to pay; CCCS will charge a nominal fee of about $20 to cover costs each month, but that is all you should pay.

Stick with it; you can do this. Take deep breaths and relax. Get together all of your bills and write them all down, including childcare and the once/yr bills. Then work from there to increase your means and lower your living.

Minxie



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Author: doublemann Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239857 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 12:11 PM
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I agree completely with Minxie....well done and great advice.

Don't let the cc companies push you around...stick to your guns, focus on the positives that you will enjoy when you get through this, and if you and your wife need counseling, the CCCS or other counselors should be able to help this, even the part about getting her on board.

as

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Author: CSDunford Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239858 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 12:26 PM
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Jon--you made a comment that without cartoons, the kids would be very unhappy. Well, yeah. For about 10 minutes. We live in an area where the power goes out on a regular basis, especially in winter, and stays out. ("Low priority area" according to the power company). Anyway, I found that when the power was out, the kids just found something else to do. They went outside and took sidewalk chalk to the driveway. They "washed" the dogs. (Yes, we had to re-do it, but they had fun and the dogs got lots of attention). They went to the neighbor's house and played with THEIR kids. They read books next to a window (daylight hours) or by flashlight or oil lamp. They played hide-and-seek in the dark or by flashlight. They took blankets and built a fort in the rec room. They did a whole bunch of stuff BESIDES staring mindlessly at a box in our living room. Get rid of the TV. You'll have about a week of adjustment, but then, I guarantee you, the kids will start spending more time with you. And you'll save a ton of money.
CarolD, heading into Power Outage Season

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Author: impolite Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239859 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 12:37 PM
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We still need a somewhat large car since there are 5 of us and a car seat.

No, you do not NEED a larger car.

Little Sis, Me and our combined three kids (two in boosters, one in a 5-point harness car seat) can all fit in a 4-door Saturn Ion OR my two-door Pontiac Grand Am. A 1997 Grand Am, I might add.

You *want* one, which I can understand. I do too. However, you do not NEED one.

I'm not sure my wife could get a second job, who would watch the kids? We have no family or close friends in Florida.

You would watch the kids.

OR, you and/or your wife will watch OTHER kids while you are already at home. Look at craigslist - you will see advertisements for adults watching kids in their home. You should be able to find rates in this section; copy that wording and the rates and go from there. If you go to church, advertise on the bulletin board there. Throw a flyer up at the library and the grocery store.

Second jobs can be had at night, too. One of you could work an overnight shift at Target or Walmart as a stocker while the other parent and the kids snooze at home. Bonus: you get discounts at the store, and most retail shops are starting the hiring ramp-up for Christmas.

Remember, the second job/income isn't forever, just until you get your feet under you again.

DW isn't onboard with me yet either. She was telling me about 4 months ago that we needed to refinance before our adjustable mortgage went up. I ignored her and it went up as she predicted.

She's just as confused and anxious about this as you are. Cut each other some slack. If she sees *you* taking action to get things turned around, she will start to feel better and help as well.

Don't panic, breathe. As you asked and someone else suggested, it is probably time to go to CCCS.

Also, check around with county and state resources - there may be financial help for you getting your kids back from Indiana. Churches could also be a resource for help - check out http://www.angelfoodministries.com/ to see if there is a church in your area offering the service. It can lower your food bill a bit.

Good luck.

impolite

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Author: Glockenspieler Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239861 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 12:55 PM
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Jon --

I think that your candid appraisal of your situation is commendable, but I agree with others that you need a professional to step in at this point or it will go rapidly downhill. Some other thoughts, in random order:

1) Your wife could get a second job or sell more of your stuff on ebay/Craigslist or do something like have a drop-in or after-school babysitting service during the hours she is at home. She could advertise at your kids' school. I know a couple that organizes Friday night babysitting for groups of young, school-age kids so that their parents can go out. You'd have to have games, movies and food planned. You can charge a set fee for 3 or 4 hours and it's a win-win situation. I know a lot of parents who would take advantage of this (if you have the personalities to handle a bunch of kids).

2) I honestly don't think Prosper would work for you. You could try it, but you wouldn't have the money by November 1st. Your risk of default is so high that I'd be surprised if enough people bid on your loan to fund it, and you'd be wasting precious hours. I wouldn't bid on it, even though you are a TMF member. You need to go the (free) credit counseling route first. Prosper might work for a consolidation later after you aren't drowning anymore.

3) Also, you need to write down EVERYTHING you spend money on. Pour over your old CC and bank statements if you need to. It will be painful, but you need to know.

4) If I were you, I would have a serious, sit-down meeting with my significant other after the kids are in bed. I don't know if you can say that your wife isn't on board when she was the one who warned you about your ARM. Maybe if you agree to a no-fighting, no-accusations rule, you could both make it through a discussion about how to get off the Titanic now that you've hit the iceberg. (Is that naive?) If you had all the numbers to show her, it might make for a more neutral discussion.

5) Is it really worth it to fight the ex? Like mlk said, it had better be worth more than $6000.

6) Keep posting. The words are harsh, but everyone is trying to help as quickly as they possibly can. As your situation improves, the posts will become less shrill sounding.

GS

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Author: Jennlee222 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239862 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 1:14 PM
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I agree with the others who have suggested that your house is killing you. I just don't think no matter how you scrape and deprive yourself, that you can make much headway when you're paying 50% of your income just for the house.

The fact that the neighbors haven't sold yet doesn't mean your house won't. You've made a lot of improvements to it, you said, so it may stand out compared to other homes in its price-range. List it, spend your free time keeping it spotless, do some guerilla marketing for it, and see if you can get an offer. If you don't, you're still in the same position you were in.

The Tahoe as well. You're way upside down, but can you get a credit union signature loan or something to make up the difference, spend $1-3K cash on an older Honda.

Second jobs, babysit, cut the pool service, food, etc, will help (second jobs especially), but I suspect you're at the point where an extra grand a month made from a part time gig still won't help you unless you get out from under the house.

You're close to your limit on several cards and you'll be getting nasty fees on them if you top them out, especially with your MBNA limit being cut now. Penalties, fees, and any increase in minimum payments will just kill you.

The good news is you make a decent income. If you can get out from under the house, you can probably make very good progress with your debts. Otherwise I fear you are going to be on the verge of bankruptcy.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239863 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 1:39 PM
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Jon

I am really sorry the MBNA transfer didn't work.

Given the Chase situation you are in a very dire place right now. You need more help than you can get from here given the time aspects involved.

I agree that reputable credit counseling as suggested is something to look into. Please look carefully into what people have posted about reputable credit counsiling versus fly by nights that just take your money.

I also think you should strongly consider obtaining legal advice. Do this sooner, not later.

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239864 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 1:42 PM
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Jon, I just read through this whole thread, and when I read your last post, I just wanted to reach through cyberspace and give you a great big hug. My dad told me once that an alcoholic had to hit rock bottom before he will want to start bettering himself, and it is only then that you can help him. I told my dad that you could give an alcoholic a blanket so they could be warm at night, and my father replied that if the alcoholic hadn't hit rock bottom yet, he would just take that blanket and sell it, to get more money for booze. I was just a young teenager when we had this discussion, and I didn't understand how someone could actually be that desperate for money--I thought my father was just being his usual cruel self. ;-)

But the older that I have gotten, the more I have seen the wisdom in what my father said. No one can force you to see the light, no one can force you to do what you're supposed to. Until you make the decision for yourself to change, everything else is just going to be yapping in your ear. I am really glad that you have finally gotten to the point where you have "woken up" and realized just how bad things are. What is frustrating is that your wife tried to tell you before, and you didn't listen. Yes, that's tough, and yes that sucks, but the really great news is, your wife already knows that things have to change. She is "going ballistic" on you because she's mad that you didn't listen before, NOT because you're doing something now. Believe me, if you didn't do anything and just pretended that nothing was wrong, she would be even more mad.

If she is anything like me, this is a temporary state. I have been in this position with my hubby, and although at the time murder seemed like a viable option ;-) I eventually got over it and started to help clean the mess up. So whether it seems like it or not right now, your wife is already onboard. Which is a good thing, because it sounds like she may have to get a second job at Wal-Mart over Christmas or something. She does sound like the best candidate for a second job, vs you.

So go on your hands and knees and apologize to her. Tell her that you were blind, but now you see. Tell her you love her, and you need her help desperately. It'll work, promise. ;-)

About the Grocery Game: Glockenspieler started a thread about it recently called Ode to the Grocery Game, which you can read right here: http://boards.fool.com/Message.asp?mid=24694966. This thread should be very helpful in deciding whether you want to use the GG or not. If you do, my e-mail address is in that thread, which you can use to tell GG that I recommended you. If you decide not to use GG, well, at least it was a good thought. As for the cost, it is only $1 for the first 4 weeks, and it is incredibly easy to cancel if you decide it won't work for you. And then yes, it is $10 for 8 weeks. Expensive? Well, yesterday I went to Albertsons and went grocery shopping. I spent $76 and saved $124. I saved 62% on that shopping trip. That was one shopping trip for one week. So yeah, for me, $10 is WELL worth it. It comes out to $1.25 a week, and I saved ten times that this last week. YMMV, of course, which is why I highly recommend reading through that whole thread, and then just trying it out on the $1 trial if it looks like something that would help you.

Best of luck to you. Please keep coming back. We will continue to help you all we can. It is going to be a long struggle, but I think will be well worth it in the end.

Hava

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Author: mastiffmama Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239866 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 1:44 PM
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Some other thoughts that I didn't see covered:

For the balance transfer, make sure you ask if there is a balance transfer fee. Sometimes these are capped at $75 or so, sometimes it is 3% of the balance w/ no cap. Either way you come out ahead of 30% interest, but it's important to make sure that the fee won't put you overlimit.

On the Sears card that is overlimit - I'm not sure why they're not penalizing you by taking away that 0% interest rate, but you MUST get that one below the limit with some breathing room before the February offer expires. Sears credit is cutthroat and that one will jump to 22% if you're under the limit, maybe 32% if you're over limit.

VOIP - our family is all out of state and we do all of our long distance calling on cell phones. We get free nights and weekends after 7 pm, and two phones cost $58/month w/ Sprint. You definately could cut the cell phone costs down and eliminate home phone to save at least $100/month.

Groceries - someone mentioned processed food. Also think about how much you buy that is a beverage - milk, pop/soda, juice, beer, wine, bottled water... In my pre-Fool days about 1/2 of my grocery bill went to drinks. Cutting these back is one way to save immediately on groceries.

Good luck. You have a lot of challenges ahead, but if you make some lifestyle changes I think you can get the debt under control.
mm

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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239869 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 2:00 PM
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Thanks, as! :-)

Minxie

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239874 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 2:20 PM
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So MBNA put all the info in and then told me to hold they had to verify it with their supervisor. They put me on hold for about 10 minutes and then another guy came on and told me that they just reviewed my account and because I was late on 2 payments, even though I am current on the account now, that they couldn't approve it. He also informed me that after doing a review of my credit , that they were LOWERING my credit line from $32,800 to $8,900!!! That pretty much means that card is now MAXED out too!

He then said that he would send me over to a "unsecured line of credit" department. At this point I begain to panic, I started feeling desparate and went through all the questions that the "unsecured line" to apply for it. After another 15-20 minutes of gathering all the info they needed from me they told me I had been DENIED

I'm now even in an even bigger mess. Ugg. Totally don't know where to run now. I've got no way to pay Chase that $1851 by Nov 1st, I've got no way to pay for the attorney fees that's going on either and I def am confused about what I'm going to do about Christmas airline tickets let alone, Christmas itself at this point even if I cancel EVERYTHING. HELP!


Unfortunately, during the application process, MBNA probably did a credit check, thereby lowering your current credit score by a few more points.

In the long run, by lowering your credit limit, MBNA is helping to prevent you from getting into more trouble than you already are. However, it does prevent the short-term gain you were going to get by "re-arranging the chairs."

At this point, I don't think you have any option but to go to CCCS immediately. Don't wait until Monday or Tuesday - you need to go today! Be warned, however, they may not be able to help you, and they may suggest bankruptcy. Your straits are pretty dire.

You should call Chase back and tell them that the BT didn't work out and you are going to go to CCCS. That may or may not stop the legal action, but at the very least, you are keeping them informed (something you should have been doing all along, by the way).

You can't afford to pay for the kid's tickets for Christmas. Especially since ex-H hasn't been paying for the support he was supposed to, if he wants to see them at Christmas, he needs to buy round-trip tickets for them. Tell him you'll take the half you were supposed to pay for off of the amount he owes DW.

As for selling the house, right now its a buyers market. Both my neighbors have their houses up for sale and they have been on the market now for a while. The one on the right has been on the market 7 months and the one on the left has been on the market for about 5 months now. Selling the house will take a LONG time and I would need at least $265k for it in order to pay the mortgage of $200k off and the $65k 2nd off. (not including the realtor fees).

Mortgage lenders do what is known as 'short sales' where they will take less than is owed on the property. You need to start looking into this possibility with your lender ASAP. What could you realistically get for your house if you had to sell it within 30 days?

AJ


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Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239879 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 2:51 PM
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You're still not in the right mindset.

As for the cable, we just cut that down... I'm not sure we could get away with no cartoons for the kids. They would be cursing our name :)

You can eliminate it. Try rabbit ears to pick up the local networks. I'm sure you have VCR or DVDs of cartoons to keep them entertained. Kids can watch the same thing over and over again with little complaint.

We are locked in a 2 year contract with the cell phones, but I'm sure we could cut that one down more.

Yes, you can break the contract. Yes, there will be a financial penalty, but unless you are close enough to the end of the contract that it is cheaper to let it run it's course, take the penalty and save the rest of the money.

We are also in a 1 year contract with the lawn service.

Again, find out what the penalty for breaking the contract is, and figure out how much you will pay out in the rest of the contract and choose the cheaper option.

As for the pool, I have no idea how to clean it, hence I hired it out. I guess I could learn though, but there would be startup costs (pool skimmer, chlorine tablets, and whatever else I would need to clean it).

you might ask more about this at the building/maintaining a house board, but I would suggest just closing it down completely. You do want to do this properly so the pool isn't damaged, but I know it can be done, and it will save you a lot of money in the long run.

We have been spending around $200 or so a month in eating out for lunch at work.</i.

Two words: Brown Bag

Should I look into CCCS or something at this point?

No. Many are scams and will ruin you. The rest won't do anything for you that you can't do yourself.

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Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239881 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 3:29 PM
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As far as our housing situation goes, we originally bought this house, which was foreclosed upon by the previous owners, for dirt cheap. We got it for $150k. About a year later after making a bunch of needed home improvements since the previous owners trashed the place before they left, we had ran up around $35k in credit cards. So we refinanced and lumped it into our mortgage now making the house a $200,000k house. We then made more improvements and went back and racked up the credit cards AGAIN to the tune of $65k, and took out a second mortgage to pay those off. Now here we are after racking up this huge amount in addition to our 2nd mortgage. When I got that nasty legal letter from Chase, It was a HUGE slap in the face. Hello wake-up call. NOW I'm finally seeing the big picture and want to make changes to my thinking. I feel it is too late though.

This is a perfect example of why this board really pushes people not to use their homes as an ATM to pay off debt.

Most people who do rack the debt back up and then don't have the equity to bail themselves out.

But, it is never too late!!!!

You are getting there. You have the right mind set now. You have made some of the hard decisions, and are on the right path.

I'm looking into the grocery game like someone mentioned, but can I afford it? It's $10 every 8 weeks. At this point I'm not sure if I can or not. If I really save a lot of money like it says I will, maybe it will pay for itself?

you can try www.couponmom.com first. It is free. You do have to have the Sunday paper to get the coupons, but I've been doing it for several months now and have made it a habit. (Sun-clip coupons, Mon-print list and compare to what I have at home, finalize shopping list, Tue-shop while husband is bowling) Now that I know I can do this on a regular basis, and that I even enjoy it, I will be moving up to the grocery game.

Someone mentioned doing a "emergency savings fund" of some sort so I don't have to use credit cards ever again. How much should I put into it? 5%, 10% of our monthly net? Is that wise considering the amount of debt I have?

The long term goal would be 6 months of living expenses since you have a family to support. BUT, while you are paying off such high interest CC debt I would suggest only $500-$1K. This is just to get you through unexpected car repairs that would prevent you from getting to work. Once the debt is gone (and you will get there someday) then you want to build this up as a FU fund. If your boss pi$$e$ you off you can say FU and take some time to find a new job.

Last bit of advice. I would pass on CCCS, but at this point you may want to look into BK. You may be at that point where it really is the last option.

I'll keep reading for other people's responses. Interesting thread, especially for lurkers who are in similar situations but don't have your courage to lay it all out there and take the hard love.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239882 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 3:39 PM
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Last bit of advice. I would pass on CCCS, but at this point you may want to look into BK. You may be at that point where it really is the last option.

You know, under the new bankruptcy laws, if someone wants to declare bankruptcy, they have to go to a credit counselor first.

Nancy


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Author: 6Bitsadollar Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239884 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 3:47 PM
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About the Grocery Game: Glockenspieler started a thread about it recently called Ode to the Grocery Game, which you can read right here: http://boards.fool.com/Message.asp?mid=24694966. This thread should be very helpful in deciding whether you want to use the GG or not. If you do, my e-mail address is in that thread, which you can use to tell GG that I recommended you. If you decide not to use GG, well, at least it was a good thought. As for the cost, it is only $1 for the first 4 weeks, and it is incredibly easy to cancel if you decide it won't work for you. And then yes, it is $10 for 8 weeks. Expensive? Well, yesterday I went to Albertsons and went grocery shopping. I spent $76 and saved $124. I saved 62% on that shopping trip. That was one shopping trip for one week. So yeah, for me, $10 is WELL worth it. It comes out to $1.25 a week, and I saved ten times that this last week. YMMV, of course, which is why I highly recommend reading through that whole thread, and then just trying it out on the $1 trial if it looks like something that would help you.
*************************
Since you live in Florida,there is probably a Publix near you. It is listed with www.couponmom.com which is a free site similar to the Grocery Game mentioned above. DW might want to look at both sites before signing up.

When my DD was 10 she went around the neighborhood with fliers offering her services to pet sit or do small jobs (like getting papers, mail) while people were on vacation. If you are comfortable about your neighborhood, the older children might enjoy doing something like that.
T'giving is next month so there may be a number of neighbors who could use something like that.

This is a good time for the 9 and 10 to get away from cartoons and start reading some good books from the library. I recommend they start with "Little Women" if they haven't read it. You can probably get a list of recommended classics from the librarian. This is inexpensive and kids usually enjoy the library.

Molly who missed the instructions as to how to make italics go away



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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239885 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 3:49 PM
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Molly who missed the instructions as to how to make italics go away


It's not that hard. You do < i > to make the italics start, and < /i > to make them go away, but without the spaces. If use use a b instead of an i, then you'll get bold.

You can check to see if you have it right by using the preview button, something I am notorious for forgetting to do.

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Author: agg97 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239886 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 3:54 PM
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Should I look into CCCS or something at this point?

No. Many are scams and will ruin you. The rest won't do anything for you that you can't do yourself.


That is the absolute wrong advice in this situation. I think you may be getting confused with the terminology here. CCCS a.k.a. Consumer Credit Counseling Service is a loose confederation of companies across the U.S. I believe that in order to hold the "CCCS" name, they must be a member of the National Foundation for Credit Counseling (www.nfcc.org). There other "Credit Counseling Service" companies besides CCCS, which may or not be reputable. Saying "CCCS is a scam" is like saying "all Xerox machines suck"...when it maybe a few particular brands do suck, but for some reason Xerox gets thrown under the bus just for having the name everyone uses.

Yes, there are some "scammers" out there that aren't worth anything, but as long as they're apart of the NFCC (link above), you can be confident that they are reputable. Click "Take the First Step", and enter your zip code for an office near you.

What CCCS can do for you is to stop Chase from imposing more late fees on you, lower all your interest rates to somewhere near 10%, and work through a realistic budget for you. Sometimes they think all your minimum payments will be just too high and they say they can't help you. That's entirely a possibility. But you've gone far enough down the slippery slope where you cannot help yourself and cannot dig out of this without CCCS intervention or legal repurcussions.

If CCCS decides they can help you, you basically give them a lump sum check each month, and they pay off your debts as they see fit. On your credit report, it will mention that you're working with CCCS, but your credit is already trashed. When you come through this on the other side and all your debts are paid off, those remarks are removed from your report.

Your other option is Bankruptcy, which I think you shouldn't consider it a "given" yet, but a "very real possibility". There are many repurcussions which happen when you enter into bankruptcy, so don't take that decision lightly.

Disclaimer: My mom works as a lecturer (not a counselor) at one of the CCCS offices in the U.S. They have many educational programs available in addition to the counseling service they offer.

-Agg97

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Author: 6Bitsadollar Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239887 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 4:00 PM
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Thanks, I think I got it

Molly-who is trying to get used to trifocals --ick

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239888 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 4:05 PM
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Thanks everyone. Keep the hard loving coming. You guys are keeping me in focus here. I appreciate it. I've called the CCCS. Yes they are a member of the NFCC and come highly recommended from what I've seen. I've given them my numbers and they are working on a DMP package for me and said they would mail it to me for my review. They do think they can help which is a relief. I'll keep reading the advice and keep you all posted with what is going on.

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Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239891 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 5:02 PM
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4) If I were you, I would have a serious, sit-down meeting with my significant other after the kids are in bed. I don't know if you can say that your wife isn't on board when she was the one who warned you about your ARM. Maybe if you agree to a no-fighting, no-accusations rule, you could both make it through a discussion about how to get off the Titanic now that you've hit the iceberg. (Is that naive?) If you had all the numbers to show her, it might make for a more neutral discussion.


And it might even help if you admit upfront that she was right and you should have listened at the time, but here is the situation now...

It will validate her thoughts, put her in a better frame of mind, show that you value her input, and will prevent the "I told you so."

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Author: thornir Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239892 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 5:04 PM
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I'll keep reading for other people's responses. Interesting thread, especially for lurkers who are in similar situations but don't have your courage to lay it all out there and take the hard love.

Or lurkers like myself who use it to remind themselves that the situation we are in is nowhere near as bad as it can be, and that if people in dire straits like this can work their way out, we should be able to also - or face the possiblility of getting into this level of trouble.

It's kind of like a "Scared Straight" program for finances instead of crime.

Good luck to the OP.

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Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239894 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 5:17 PM
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You know, under the new bankruptcy laws, if someone wants to declare bankruptcy, they have to go to a credit counselor first.


Thanks, I was not aware.

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Author: FoolishRage One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239895 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 5:32 PM
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In fact, she came home last night as I was finishing up my post and then proceded to yell at me about posting our information on the internet and I got chewed out.

Just a little padding for this blow - The internet is anonymous. Just because you posted the situation, does not equate you posting your name, address and home phone number in the New York Times.

FoolishRage

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Author: FlyingCircus Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239898 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 6:38 PM
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Echoing everything 2gifts said. Cut everything - everything - out.

Start from 0. Then add in your A expenses - must haves: house, groceries, utilities (not cable TV). Light, heat, (not A/C), food, gas for the cars. Medicine. CC minimum payments.

If you have money left in your budget, go to the B expenses. Car payment. If its too much, sell it and buy a jalopy for net cash add. Lunch at work. Presents for others. Charity. Bigger cc payments.

If you have money left, then go to the Cs - lawn service, pool service, eating out, other car payments, dry cleaning, miscellaneous crap no one needs, entertainment, cable tv, cell phones. If you don't have budget money left for this category, your answer is easy: $0. Nothing in the Cs is a "need". It's a "want".

FC

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Author: lilacinn Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239916 of 308451
Subject: Re: Over my Head in Debt! Date: 10/26/2006 10:25 PM
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the phone suggestion is good but...for long distance...is it too radical to suggest a $39.00 roll of stamps? Several friends and I have reverted to communicating via snail mail and it's worked out fine -- actually enjoyable to come home to find a nice gossipy letter or postcard that can be appreciated according to my schedule. Or, just use e-mail.

Besides, the OP & spouse will be too busy soon with second job(s), babysitting, selling goods online and DIY home maintenance to spend much time gabbing to out-of-state family. Do they really need long-distance?

There's always the "emergency" argument but really, in a true health emergency, would the neighbors or employers deny you the use of the phone?

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Author: FiddleDeeDee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239929 of 308451
Subject: Re: Over my Head in Debt! Date: 10/27/2006 7:49 AM
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Molly-who is trying to get used to trifocals --ick


Welcome to the trifocal club! It actually makes my life a little bit easier having the three prescriptions in one pair of glasses, but I find I still need to use "computer" glasses because there is such a small window for me to see through in the trifocals.

Andrea

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Author: mjw3786 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239951 of 308451
Subject: Re: Over my Head in Debt! Date: 10/27/2006 3:38 PM
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Congratulations on taking the first, and most difficult, step in digging yourself out. Keep your focus, and be confident that you can tackle it if you put your mind to it.

You won't always make stellar progress, but if you keep your sights set on smaller goals rather than always trying to focus on being completely debt free, you will find it much easier to bear some of the losses you'll seemingly incur from cutting your budget and changing lifestyle.

A rec on the 2nd job for you...you say you work on the computer. Are you a software developer? IT specialist? Can you do some website design on the side?

I do, and it's quite profitable for the amount of time I spend on it. Perhaps you can do some contract work. Lots of sites have forums looking for skilled developers for contract jobs. A little here and there may help, but I don't know your exact situation, so take that FWIW.

Good Luck, and please, stick around. It will help more than you know!

Mike (finding each new day as a newly-born frugal mcdougal is a challenge, but not nearly as horrible as expected)

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Author: BklynBorn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239979 of 308451
Subject: Re: Over my Head in Debt! Date: 10/28/2006 4:36 AM
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Those creeps at MBNA did the same thing to me.

Regarding the idea that people have to hit bottom: There's only one ultimate bottom for all of this stuff, whether it's alcohol, drugs, gambling, spending, food -- and that's DEAD. That's not exaggerating for any of those problems... think about it.

What we do here is *raise* the bottom for people who ask for help. We provide a vision of their future if they continue on their current path. And we point out alternative paths. Sort of like the spirit of Christmas Future.

AA and other 12-Step programs do the same thing, and they say it in so many words.

For people who think things are not *that* bad, those programs suggest a "convincer" -- "go on out there and try to do it on your own again. We'll hold your seat for you."

BklynBorn

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240065 of 308451
Subject: Re: Over my Head in Debt! Date: 10/30/2006 12:58 PM
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When I read the first post, I figured I was going to have to put this guy in the foxhole. But after reading the rest of the thread so far I see you guys are taking care of business just fine.

Oh what the hell, I'll put him in the foxhole anyway...

... after I get back from lunch.

xtn

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240074 of 308451
Subject: Re: Over my Head in Debt! Date: 10/30/2006 7:18 PM
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When I read the first post, I figured I was going to have to put this guy in the foxhole. But after reading the rest of the thread so far I see you guys are taking care of business just fine.

Oh what the hell, I'll put him in the foxhole anyway...

... after I get back from lunch.

xtn 12:58 PM


That's one heck of a lunch.

Nancy
currently cooking dinner.


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Author: SoccerDad9998 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240138 of 308451
Subject: Re: Over my Head in Debt! Date: 10/31/2006 3:08 PM
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Your situation is about to become much, much worse very quickly with the pending Chase $1,851 / ballance due, lower credit lines and so on. Your credit score is being thrashed and if the Chase stuff goes through then it will get much worse very quickly. Your credit report and score will put your rates through the roof and eliminate any chance of BTs.

You should do whatever you have to handle the Chase issue. A temp solution might be getting a BT in a card under DW's name if her credit has not been thrashed. This worked for me when I had id theft on my credit report with low 520 score and DW had much higher scores. She is SAHM like your DW. Look into this as a stop gap - triage solution. If this does not work then start selling anything and everything. Get the cash to pay Chase or your credit will be thrashed. 401K ? Any other assests ?

You have gotton very good advise on cutting costs and increasing income.

You need to get DW on-board. I am going through this right now and of course the talks will not be restricted to money - everything else will be brought up. But, you have got to talk to her and get her working with you.

Your lack of a budget and e-fund that does not account for un-expected expenses is the same case for me. You are on the right track with Quicken and there is another thread that lists all the expenses that people do not commonly budget for. At some point you realize that if year after year you have $100s and maybe $1,000s of "un-expected" expenses then maybe they are not so "un-expected". Your $7,000 expense I would consider a very unexpected expense that would drain a good e-fund. You really are not in a position to set aside any significant amount of money in an e-fund right now. But, as soon as you get a little cash flow you should sit one up if only to put $20 per month in it and strart developing the habbit.

Hang in there. Keep posting. Good luck

SoccerDad - who feels your frustration



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Author: SoccerDad9998 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240141 of 308451
Subject: Re: Over my Head in Debt! Date: 10/31/2006 3:18 PM
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SoccerDad should have finished reading the entire thread before posting.

Good luck with CCCS. Keep posting



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Author: Zvolen Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240154 of 308451
Subject: Re: Over my Head in Debt! Date: 10/31/2006 4:48 PM
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I wanted to respond to your post you have gotten plenty of advice on what to do and I hope you take it all seriously although it may seem harsh its exactly what you need to hear at times, I, Myself is included in that. I wanted to respond because I was in the same position you are in maybe not the money situation but hopeless with no where to turn to and seemingly nothing to do and scared.

First off the one thing that helped me was to realize this is an emotional time and most of the CC companies want you to get emotional as well, hence them stating they will garnish your wages and send you into collections. By all means they could and most likely will eventually but the process takes time and they first have to sue you and win the judgment before they can ever garnish your wages. Also, what's the worst that can happen if you don't pay your credit cards? Your credit score goes down, I am sure it already has. You get sent into collections and you owe the money we figured that already and if it does happen what can they get, you don't have anything from what you explained. Therefore, relax keep your family close hug them and realize this is just an event in your life that can and will be worked through and having a plan will help this issue.

Finally the only way to get out of this mess is to increase your income and decrease your out go and hopefully you can do both. As far as the income goes that usually is the easy part extra jobs, yard sales, eBay, craigslist anything not in use can and should be sold this is desperate time and calls for desperate measures. I am not telling you anything that I myself haven't done or wouldn't do. Now, the out go may be the harsh part to deal with. You say that the kids would be mad at you I say you nor they shouldn't even have the time to sit for hours and watch TV, instead of paying the lawn service have your kids help out for a commission, age appropriate obviously. Cut the cable, the phone, pool service, lawn service that alone will free up some extra cash plus the money from you selling some items. Also, you can get out of your lease if you contact the lease company and ask for the buy out then sell the car and if there is a difference you can then borrow that amount, which still would be substantially lower than what you are paying, that goes for the Tahoe as well. Now this may sound harsh but it is the truth if you are not ready to do any or all of these you are truly not ready to free yourself from this burden it was a point I too myself had to get to.

I hope this information helps and if there is any more advice or questions you had please feel free and I will do the best that I can. Lastly, for the most part many of the credit counseling service do not do much more help than you yourself can not do yourself and it also still shows on your record that you are going through these services. Also if you do decided to do that keep an on them if THEY miss a payment the burden and fault is still on you.


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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240272 of 308451
Subject: Re: Over my Head in Debt! Date: 11/1/2006 7:18 PM
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Here's a quick update. I got my DMP "package" today from CCCS. They want me to send a monthly payment of $987 to them! They didn't even figure into the budget anything for any kind of emergency fund and it would take 5 years to pay off. (51 payments). Even having cut cable, lawn service, etc like you all suggested wouldn't even allow that kind of payment into the budget. I've been looking into a second job, got my application in at the local grocery stores, target, wal-mart, everywhere I can think of. Waiting to hear back on getting a second job. Hopefully will get something SOON because the lord knows I need the money.

Not sure what I'm going to do now. I just dropped an email back to my CCS counselor to see what the deal is. I feel like I'm about out of options here.

So let's say CCCS tells me they can't help. What are my options? Do I HAVE to do bankruptcy? Couldn't I just send whatever I could to my credit cards and tell them to deal with it since its unsecured debt? Sure they could sue me, but I was looking at the laws and saw it said something like only 25% of my wages could be garnished or whatever. I don't know which is worse at this point. Bankruptcy would be on my record a long time.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240273 of 308451
Subject: Re: Over my Head in Debt! Date: 11/1/2006 7:36 PM
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You don't have to do bankruptcy but it may be the best choice for you. If you just let people take judgments against you, that negative information will be on your record a long time. Plus you will owe the amount of the judgment, including potentially interest on the judgment and potentially attorneys fees (depending upon state law). That then keeps you from acquiring assets in future.

Garnishing wages is only a part of it. I assume that at some point you want to acquire some assets. If you have judgments against you it is very difficult to do that.

While Bankruptcy now requires one to pay more than in the past, I still tend to feel that it is better than allowing a bunch of judgments which will also trash your credit.

Listen carefully to me. You need good legal advice. Please get it from a competent attorney. Do it sooner rather than later.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240274 of 308451
Subject: Re: Over my Head in Debt! Date: 11/1/2006 7:53 PM
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So let's say CCCS tells me they can't help. What are my options? Do I HAVE to do bankruptcy? Couldn't I just send whatever I could to my credit cards and tell them to deal with it since its unsecured debt? Sure they could sue me, but I was looking at the laws and saw it said something like only 25% of my wages could be garnished or whatever. I don't know which is worse at this point. Bankruptcy would be on my record a long time.

Sure, BK will be on your record a long time, but so will the judgements your creditors will get against you. In some states, they can continue to be renewed. And at least with BK, the debt will either be satisfied or discharged, so you won't have collectors after you, or if they do try to come after you, you can refer them to the BK and they will have to stop bothering you. If you just quit paying, you will have fewer options to get them to stop contacting you.

I second what determinedmom said - you need to get some legal advice. If you can't make the payment that CCCS has outlined for you, you are in so deep that you are correct, you don't have many options.

If your state allows it, be sure you have filed a homestead exemption on your home before you start any other legal processes. I'm not sure if they allow homestead exemptions after the BK process is started.

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240278 of 308451
Subject: Re: Over my Head in Debt! Date: 11/1/2006 8:11 PM
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So let's say CCCS tells me they can't help. What are my options? Do I HAVE to do bankruptcy? Couldn't I just send whatever I could to my credit cards and tell them to deal with it since its unsecured debt? Sure they could sue me, but I was looking at the laws and saw it said something like only 25% of my wages could be garnished or whatever

That's 25% of your paycheck after taxes. Can you feed your family, cover the utilities, and pay your mortgage on 75% of your take home pay? Perhaps, but you would have to delay more and more credit card payments. More and more creditors will seek judgments and request garnisheement of your wages. And eventually, you'll have to stop paying the mortgage. That forces the bank to foreclose on the house.

Declaring bankruptcy now will save your home, and keep a roof over your head. It will keep your paychecks coming. I don't know that it's your only choice, but you've said that the CCCS plan is more than you can afford, so it might be a good recourse.

I don't know whether or not you qualify for Chapter 7 (which wipes out all unsecured debts). Here's a means test for Florida:

http://www.bankruptcyhelponline.org/bankruptcy-means-test/median-state-income/fl-florida/

Chapter 13 puts you on a payment plan.

Did the CCCS counselor have access to your income information, or just the debt information? Did you ask about the bankruptcy option?

I realize that at this point you're struggling to keep your head above water, and you don't have the time or energy to focus on other matters, but at some point, if possible, I'd be interested in hearing how all this happened. Was it one problem that got bigger, one specific event, or something that happened over a long period?

Bankruptcy attorneys have a tendency to encourage bankruptcy. So if you truly don't want to, you'll have to find an attorney who works in a variety of areas.

Nancy

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240680 of 308451
Subject: Re: Over my Head in Debt! Date: 11/7/2006 10:11 AM
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Ok. Here's the update. I got in contact with a BK lawyer. Spoke to her for a bit about the situation and she thinks she can qualify me for chapter 7. I'm meeting with her today. She said all she needs today is a copy of my credit report (and a $250 retainer).

I have a couple questions for others who might have gone through the whole BK process. What does the M PA after her title mean? How much does it typically cost to file. I was quoted $299 to file and her fee to do everything is a flat $950. (The $250 today will be de-ducted from the $950). Is that a normal rate?

What kinds of questions should I ask? Any advice would be great here. After talking to her it sounds like this is the best path for me considering everything going on.

Thanks.

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240745 of 308451
Subject: Re: Over my Head in Debt! Date: 11/7/2006 8:15 PM
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I found some questions online to ask :).

The BK attorney made me feel a little better. She qualified me for chapter 7 and to email or call her anytime with questions along the way and she will personally be handling my case all the way through.

I'm going through the required debt classes and in the next 3-4 months she said it would all be over.

That being said, I am going to do everything I can to NEVER get myself in this situation again.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240761 of 308451
Subject: Re: Over my Head in Debt! Date: 11/7/2006 11:05 PM
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The BK attorney made me feel a little better. She qualified me for chapter 7 and to email or call her anytime with questions along the way and she will personally be handling my case all the way through.

I'm going through the required debt classes and in the next 3-4 months she said it would all be over.

That being said, I am going to do everything I can to NEVER get myself in this situation again.


Jon,

I am sorry you are having to go through this, but I am glad that Chap 7 BK is an option for you. Good luck, and please be diligent in changing your lifestyle to one of LBYM.

AJ

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Author: rosietomato Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240855 of 308451
Subject: Re: Over my Head in Debt! Date: 11/8/2006 10:15 PM
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My DH loaned a dead beat (now former) friend $1600 to cover the BK lawyer and fees three years ago. So it sounds like your costs are pretty reasonable.

I'm sorry to hear that you have to go that route but if it must be, it must be. You will survive this if you have learned from it.

The future looks brighter. Yeah for you!

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Author: BklynBorn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240870 of 308451
Subject: Re: Over my Head in Debt! Date: 11/9/2006 1:21 AM
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Hi jonwh,

The end / the beginning... that's how I thought about "my" BK. I know i'm a little late, but it's never too late to save your BK butt.

1) Do whatever you can to get a second opinion. Maybe even ask this attorney what she thinks of that. At the very least, consult with your local bar association. Why? Of course she thinks you should go BK! If she were a barber, she'd think you need a haircut. It's a business. The best lawyers make you forget that. I'm a lawyer, and I've been caught off guard by that and *screwed*.

2) Don't tie your BK to this lawyer. Get smart. Having a lawyer doesn't mean abdicating responsiblity for the process. Get the books from Nolo. http://www.nolo.com/
Look at your federal district's bankruptcy court website. As I've said before, bankruptcy is a "substantial compliance" process, designed for consumers to file for themselves if necessary. I looked at a LOT of BK court websites around the country. (I refused to accept the clerk's insistence that I had to type everything... and I was right.)

For starters, $299 doesn't sound right. Since when is the federal court system trying to make something that is $300 sound like it's "really" less?? I hope I'm wrong, for your sake...

3) Continue to be a very curious, squeaky-wheel consumer. You sound pretty smart. You should be able to understand everything that is happening. The process is tedious, not complicated. If you don't understand something, it's not your understanding skills, it's someone else's explaining skills. When we ask questions, we are collecting TWO types of info: the substantive answer to the question, and info on the people we are asking: are they smart? honest? patient?

4) Being a smart consumer is built on *reading the retainer agreement carefully.* Don't worry if it's silly legalese boilerplate. Ask ask ask. If she tries to shush you or imply that you can't understand because you're not a lawyer, don't say Excuse me, don't say I hear my dog barking, just get up and walk out. Even if you lose the $250, it's better than losing your shirt for no reason.

5) I'm a free-lancer, just like that lawyer. So I know that "flat-rate" jobs (such as $950 for the whole thing) have pros and cons for both sides. She makes more $$$ if the job is "standard" and done fast. You do better if you take your time, ask every question that comes up, check her work and sometimes send it back for changes. *This* is what you're paying for.

6) Did she really say she would handle it personally all the way through?? That would be a first. Ask what she means by that. Photocopies? Paralegal? Running to the courthouse to file? Play Columbo if need be.

Even if you are totally determined to stick with her, ask all these questions, express all these concerns *anyway*. You will send a message about your standards and expectations. I'll bet she has about 200 "friends" like you. And we all know who gets the most (read: best) attention. That's right: the squeaky wheel. Also, just going through all these motions will either cement your plan for BK, or shake it up a bit.

Pop quiz: Are you thinking right now: Hey, don't worry, that lawyer is nice, and smart, and she gets where I'm coming from. If you answered Yes to this question, that lawyer is good, and you'd better pay attention.

Good luck!

BklynBorn

P.S. MPA = Masters in Public Administration.

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Author: jonwh25 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240889 of 308451
Subject: Re: Over my Head in Debt! Date: 11/9/2006 10:34 AM
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BklynBorn,

Thanks for the advice!

1. Yes I actually talked to 2 different BK lawyers first. The first guy was all about rushing me through the process and getting my money. He was hesitant to answer my questions. Red flag. I dropped him. The second one was the one I'm with now. She even asked me if I had sought out help from CCCS or any other agency first. She explained everything very well. She scheduled a later appointment (5:30pm) so me and the wife could talk to her. We were there until almost 6:30 and it was obviously past their closing time. She didn't mind a bit.

2. Thanks for the nolo advice! I'm reading all the articles and whatnot on there now. The fee my attorney quoted me was right on for filing. I went to the courts website and saw the fee myself. ($299 for Chapter 7) http://www.flmb.uscourts.gov/feeschedule.htm

3 & 4. Thanks. I'll continue to read everything I can get my hands on. I'll be that "squeaky-wheel consumer" for sure. My wife and I are very good at making sure we understand the BK attorney is saying and asking clarification. Hence our 20 minute meeting that lasted an hour.

5. Yeah she said she would handle almost everything. She said she may have her aide do the smaller things (photocopies, etc), but everything else she is going to do. She even said if I wanted to come with her to the courthouse to file, I could go. :)

I think I shocked her when I went in with a bunch of questions. She told me to just bring a copy of my credit report to get started for
the first meeting. Instead I showed up with EVERYTHING, house papers, insurance papers, all my bills, W2's, tax returns, pay stubs, bank statements, etc. She was blown away. I had it all organized in a nice little binder too :) I am going to see her again at her office and bring her a couple things I forgot, but she said after that the only thing I really had to be at would be the meeting with the creditors.

I asked her how many cases she has filed, how long she has been doing it, and if she only does BK cases or also does other things on the side. She has filed over 6800 cases in the past 6 years of strictly doing only BK cases and is well versed in the FL laws. She clearly enjoys her job and making sure her clients understand the process. I think I stumbled across a really good BK lawyer.
















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Author: Minxie Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 241241 of 308451
Subject: Re: Over my Head in Debt! Date: 11/15/2006 6:35 PM
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hi, jonwh25,

I must have misunderstood something and I hope you can elucidate for me. CCCS wants you to send $987/mth to cover all of your credit card payments, correct? You currently bring in $5500/mth so...

Net Income = $5500
minus Mortgage $1798
minus 2nd mortgage $788
minus Cars $881
minus CCCS $987

Left over $1046


That leaves you just over $1k to cover all of your other expenses. Unless I missed something, and it's entirely possible, you should be okay using CCCS. Things will be a bit snug for awhile, but you certainly shouldn't have to declare bankruptcy. Please reconsider; please also correct me if I have missed something.

Minxie

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