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Hi! I'm new to this board and new to the realization that I'm in big fat financial trouble.
So, as Dr. Phil on Oprah would say, "I'm getting real" to the fact that it's got to stop.
$15,000 credit card debt, $20,000 car loan, $7000 student loans, $130,000 mortgage, $30,000 2nd mortgage, etc. As it stands now, we are juggling bills each month- pay this guy this month, that guy next month, etc. Our credit is shot.
OK- so the first thing my hubby and I decided to do was to get rid of our 4bd house (we only have 1 child), and move into a small apt close to work until we get things paid off. We could probably save around $750 a month between the saving on mortgage and the gas/commuting savings.

My first (of many, i'm sure) to this board is:
If we can't sell the house for enough to pay off our 2nd mortgage, what then? Do you have to pay them right away or can you continue to make your payments? There is no way we could come up with the balance on that amount, since we just got the 2nd loan last year and have only been in the house 2.5 years. We will probably just make enough to pay off the 1st mortage and pay the realtor commission.
Thanks so much!
Margi
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Have you considered renting the house for enough to cover the mortgage and second mortgage payments (and maybe a bit more depending on market)? Or renting out those extra rooms? I'm paying $325 for a room/plus half utilties, and that's cheap in the Northern Virginia area. You may want to check out your local market and see how much you can bring in by sharing your home with two other people.
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Have you considered...renting out those extra rooms?
*****
I just thought this option bore repeating. I actually know a guy who owns a house near where he *used* to work (note the past tense), and has after some searching found a job about a 90-minute drive away. One option he's considered is renting out the house to some of his more trustworthy friends. The place is huge, so if he actually gets one renter per bedroom, he'd be able to make the house payments *and* be able to afford an apartment closer to work.

Good luck. I really don't have any been-there-done-that advice.

- Kilbia
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Margi:

Seems like a large car loan to me. Is there any way you can get rid of that very expensive car and get a used model (good used model) instead?

I am hoping that you have stopped using the cards and are not adding to the debt. Cash only diet for now until you figure out where your money is going. Have you looked at the things you are currently buying and gotten rid of your cable, cell phone and all the stuff that is not a necessity? Get rid of call waiting? These things add up. There is a big difference between wants and needs.

I can't think of anything more and am not qualified in the selling of the house and other questions. But someone did bring up a point that if you are in a house for less then 3 years you might owe somethings. I am not sure what. You might want to look around the currents postings.

Catleen

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I could never get even close to enough rent to cover both mortgages. We used to have a roommate and never thought he'd leave, but when he did- that is when we started to get into trouble. We thought about having another one, but with a small child in the house, I am very leary of having strangers live with us.
Thanks though.
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Hi Catleen,
Yes- it is a high car loan, only because- in order to get rid of our last car, we had to tack on the negative equity to this new car loan.
I know, I know, I know, stupid stupid stupid. If we tried to get rid of this car, we'd be even further in Negative equity hell.
Margi <--- wondering what the heck she was thinking...
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Not being a homeowner, I'm not sure of answers to your questions, but I wanted to congradulate you for "waking up" and taking some solid, life altering steps to eliminate your problem!

Ishtar
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No. of Recommendations: 6
Have you considered renting the house for enough to cover the mortgage and second mortgage payments (and maybe a bit more depending on market)? Or renting out those extra rooms? I'm paying $325 for a room/plus half utilties, and that's cheap in the Northern Virginia area. You may want to check out your local market and see how much you can bring in by sharing your home with two other people.


OOOOOOooo, good idea. Building on that one, since you have two rooms, why not look for a single mom that's having trouble making ends meet? Find someone that has a kid your kid's age, and instant, live in playmate!

Ishtar
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If we can't sell the house for enough to pay off our 2nd mortgage, what then?

Margi,

If you can't cover both mortgages by selling the house, then you would need to come up with cash to make up the difference. This would mean the house is "upside-down". Those loans are secured on the property and the lender isn't going to let you sell the house and keep the loan. Nor would you be able to close an escrow without repaying and "clearing" the loans from the title. BTW, there is the option of selling the house by owner and eliminating the realtor fees, but it doesn't sound like you have the background to do something like that. If you can rent the house at anywhere near break-even, you may still be able to lower your expenses and keep the house for later when you are in a better financial position.

Actually, the 22K in credit card and student loan debt isn't too bad if you get your house and car in order.

Here is what I would recommend:

1. Go on a cash & debit diet. Stop charging ASAP and maybe cut up all the cards but one for emergencies,
2. Get rid of the car attached to the 20K loan (Hopefully this isn't also upside-down.)
3. Put all of your debts into a snowball calculator and put together a repayment plan.
4. Lower your expenses, LBYM, brown-bag lunch, get rid of cable and cell phones, etc.
5. Increase your income, get a second job or some side-work.

Good luck and let us know if you have any more questions.

Bret
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I could never get even close to enough rent to cover both mortgages. We used to have a roommate and never thought he'd leave, but when he did- that is when we started to get into trouble. We thought about having another one, but with a small child in the house, I am very leary of having strangers live with us.

Are you sure? I don't know where you are, you haven't filled out your profile. But around here, rooms rent for a MINIMUM of $500. Check out your newspaper and see if there are any listings for rooms-for-rent. See how much they are.

I think one of the options that someone else was saying is, go ahead, move to a two bedroom apt (cheaper) and rent out the ENTIRE house. Get 4 college kids, I'm pretty certain you could get enough rent to pay the mortgages. Charge the one that takes the master bedroom a little more than the others.

Ishtar
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Yes- it is a high car loan, only because- in order to get rid of our last car, we had to tack on the negative equity to this new car loan. I know, I know, I know, stupid stupid stupid.

Margi,

I'm sorry to hear that you are upside-down on both your house and your car. Don't beat yourself up over it. Consider it a lesson learned and next time, I'll bet you will be much wiser with your financial arrangements. This will make your road out of debt more difficult, but it can still be done.

In reading your posts, it struck me that you probably still haven't gone through the whole budget process and carefully analyzed where your money goes. (Please correct me if I'm wrong.) I strongly recommend that you very carefully analyze your income, your debt and your expenses. Then you will have a clearer picture of the reason you have gotten into debt and this will also lead to the means to get out.

In my relatively short time on this board, I have noticed a pattern. First, people come here looking for a magic solution to their debt problem. They think if they just get a second mortage or a 401K loan, that they are out of debt. These are not solutions, they are just ways of moving debt from one vehicle to another. Next, they start to slowly realize that they are going to have to tighten their belts and make the long climb out of debt the hard way. Finally, they gain control of there finances, they start to become succesful at paying off debt and then they start to actually enjoy it. (Yes, I know it's scary, but it does happen.)

Good luck with your long climb out. We are all here with you.

Bret
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Hello!

Aw Brett, I was afraid someone would say that (about not being able to sell my house.)
And yes, the car is also one of those upside down things.
My husband already has a 2nd job, has had it for 5 years - pretty stupid that we are still in so much debt, huh! I've thought about getting another job too, but as it is now, my son hardly ever sees the three of us together as a family. In fact, the whole reason I realized how bad off we are is because I wanted to quit work and stay home with him. (He's been having some "behavioral" issues lately and has been diagnosed with the dreaded AHDH.)
We are in process of getting rid of all the "extra's", and cutting back other expenses. It just seems like it will never get better.
Thanks for all your advice.
Margi
P.S. What is a snowball calculator? and What do you think about the consumer credit counselors that "help" you get your rates lowered and cards paid off?
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"In reading your posts, it struck me that you probably still haven't gone through the whole budget process and carefully analyzed where your money goes"


Bret, you are right- I've been afraid to analyze our spending. I have a way to justify every purchase I make by saying, "it's not like I drive a Porsche or wear diamonds, I deserve this". But then, I always regret it.

My son is at grandma's for the rest of the week, so it will be a good time to drag out the bills, the old checkbooks, etc..
Thanks for the warm welcome and support.

Margi <-- has consistantly taken 401K loans every year for the past 3 years, for um.. lets see: disney vacation, computer, home downpayment. Yes, I know, stupid, stupid, stupid!!

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My husband already has a 2nd job, has had it for 5 years - pretty stupid that we are still in so much debt, huh! I've thought about getting another job too, but as it is now, my son hardly ever sees the three of us together as a family. In fact, the whole reason I realized how bad off we are is because I wanted to quit work and stay home with him. (He's been having some "behavioral" issues lately and has been diagnosed with the dreaded AHDH.)
We are in process of getting rid of all the "extra's", and cutting back other expenses. It just seems like it will never get better.
Thanks for all your advice.
Margi
P.S. What is a snowball calculator? and What do you think about the consumer credit counselors that "help" you get your rates lowered and cards paid off?


Margi, you'll be ok! You're taking steps now that will greatly help your son.

ADHD is a problem only for those people that don't want to take the time to relate to the kid (most teachers don't have the TIME to.) He'll be ok! (My father was diagnosed last year, in his 50's. It explains why he had trouble in school when he was young, but it hasn't hindered his career any.)

I don't have the link to the snowball calculator, but it's a spreadsheet that one of the members here created to help plan debt reduction. It takes a popular theory here, and let's you play with it.

The "snowball method" of debt reduction is:

First, write down all your debts, the total amount owed, the minimum payment, the interest rate. Add up the minimum payments. Look at your budget. How much, at a minimum, do you have to spend on your debt? Is it $5 over your minimum total? $20?

Now, pick either the debt with the highest interest OR the one with the lowest balance. (Or in some cases, the company you HATE the most!) Apply the extra amount, even if it's just $5, to the debt you picked. Pay the minimum on everything else. Once that debt is paid off, "snowball" the payment you were making to that company to the next one on your list.

Ishtar
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pretty stupid that we are still in so much debt, huh!

Margi,

Welcome to the club, you, me and a couple hundred million others. I don't think being stupid is a requirement for being in debt.

What is a snowball calculator?

To snowball means to pay the minimums on all your debts except the one with the highest interest rate. You put every spare dime you can afford on the highest rate debt. Then when that debt is gone, you take the amount you were paying on the old card and snowball it onto the next card. It is a very efficient way to pay off debt. Some people snowball the lowest balance card or they pay off most annoying creditor first. It's up to you, you are in control at this point.

A snowball calculator is an Excel spreadsheet that some kind soul on the board has provided. There are also debt analyzers in Quicken and MS Money. Basically, if you put all of your debts into the snowball calculator it tells you the payoff dates. It also allows you to do what ifs and analysis. Search the board for "snowball calculator" and you will find a link to download it. If you can't find it, send me an email and I will sent it to you. The snowball calculator is what really woke me up. I was looking at 54 months of payments and it just floored me. Instead, I put every extra resource into the fight and cut it down to 36 months.

What do you think about the consumer credit counselors that "help" you get your rates lowered and cards paid off?

Most people on the board recommend skipping the credit card counselling service and doing it yourself. This is because it costs money and puts a black mark on your credit. To do it yourself, snowball your debts, call all of your creditors and ask them to lower your rates. Some will and proably some won't. I don't have much experience with CCCS, but the posts I have read recommend CCCS and myvesta.org. Virtually everyone hates Ameridebt. I would try it yourself and then go to counseling later if you need the help.

Bret
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Hi Margi and welcome to the Board!!!

I chime in with my 2 cents also.

Congrats on the first step of recognizing the debt problem and that taking on more debt is not a solution.

Congrats on the second step of realizing you need to analyze your expenses and create a budget.

Congrats on making a commitment to repay the debt.

Now for the challenge. Do you have anything around the house that you can sell in a yard sale? auction on E-Bay? etc?

Are there things in your budget that you can cut?

Have you considered consolidating the two mortgages? You should consider your interest rates and the closing costs and estimated appraisal value. Sometimes by consolidating the debt you can cut your total monthly payment and snowball the difference into another debt. This may not be posssible if you don't think the house will appraise for the combined mortgage amounts.

Do you have a method for tracking your expenses? Things like Quicken, MS Money, or even a spreadsheet can really prove valuable by showing where the money went with 1 quick report.

As others on this board have said before, it took little effort to get into debt but it takes a lot of hard work and commitment to get out (not an exact quote but you get the picture).

Good luck.

CJ
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One option he's considered is renting out the house to some of his more trustworthy friends. The place is huge, so if he actually gets one renter per bedroom. . . . .

then again, beware renting to friends, or shall I say "former friends", especially when they promise to fix your house & so forth. And you don't have any written agreements.....
when we tried to sell the house it was really a mess.

I could go into detail but I don't wanna. It wasn't MY idea, &, well, lets say we won't do that again.
--

joyce
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Margi,

Unless you live in a shaky area for real estate, I would not sell the house. As it appreciates you get less upside down in your borrowing for it. I know part of your auto debt is from being upside and selling another car, but right now, a beater is what you might want. And your car keeps depreciating turning you more upside down in it.

Also, a cheap car will help insurance rates.

Don't be afraid to look at your spending. You have already beaten yourself up enough over this, now put your emotion and intensify on getting rid of the debt. The snowball helps a bit with the emotion involved in debt as well as the numbers.

You're normal. You mentioned the Disney vacation. Could you imagine how short the lines would be if people had to pay cash to go there?

Fred
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Ishtar,

Thank you for your kind words. I love this board already.
Now that you explain the snowball calculator method, it sounds familiar. I probably read something about it at this very site, many months ago.

Margi <-- actually looking forward to pulling all those bills out and zeroing in on my first "target".
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Margi,

Brace yourself...more encouragement coming! You've come to the perfect place to beat the debt monster. I love the attitude around here...they almost treat getting out of debt like a game.

I don't know about you but when I got my first credit card, I felt honored and privileged. I just HAD to use the cards...wouldn't want to hurt their feelings. Now I know the pleasure was all theirs! They are making a fortune off my interest payments and other fees.

Well, I'm turning the tables on them with the help of this board. I downloaded the snowball calculator (sorry I'm no good with URL addresses but you can search for "snowball" and find it very easily) and was so excited to actually have a plan. I printed the spreadsheet out and every time I make a payment, I put a red mark through it as if to say, "Take that you old debt monster!"

I loved your referrence to Dr. Phil and Oprah...I just love them! He really makes you face reality and stop kidding yourself.

Think also about what you will be teaching your child. You can help him not make the same mistakes you've made! You can prepare him for a more solid future. Cool!

Shelly
...only 26 more months until my money is MY MONEY!
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Fred said: "You mentioned the Disney vacation. Could you imagine how short the lines would be if people had to pay cash
to go there?"


ROFL! That is too funny, I never thought of it like that. We went down with 3 other families and I KNOW everyone was using their credit cards for the trip.

Margi
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Thanks Shelly, keep that encouragement coming.
I just phoned my hubby and told him about the wonderful people I've "met" already. I told him we need to sit down and start the whole scrutinized checkbook thing tonight, no more atm "CASH" entries. I told him about the snowball calculator too- he said "oh ya..." and proceeded to tell me how it works! I was floored!! Where the heck has he been the last 10 years? Oh ya, that's right- I do the bills.

Margi

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Thank you! Thank you! Thank you!!

Margi
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You're welcome Margi.

I wish you all the best as you start on the tough but rewarding road to freedom.

Hugs!
t.
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Ok- I am just tooo excited. I just plugged in (to the best of my knowledge because I don't have my bills in front of me) all our debts, including the house payments, and it said- if i stay on track, that we could be totally debt free in 10 years. WOW. That is some powerful tool! I never imagined I'd ever pay off my house in less than 30 years!
When I did JUST my credit cards, it was just 2 years.
Thank you thank you thank you again!!
Margi <-- wayy too excited.

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So, as Dr. Phil on Oprah would say, "I'm getting real" to the fact that it's got to stop.
$15,000 credit card debt, $20,000 car loan, $7000 student loans, $130,000 mortgage, $30,000 2nd mortgage, etc. As it stands now, we are juggling bills each month- pay this guy this month, that guy next month, etc. Our credit is shot.


I've read thru the responses to your posts and I see someone provided a link to the snowball calculator for you. :)

Can you list a few more details about the credit card debt? Is it all on one card? What banks/companies issed the cards? Have you been making at least the minimum payments every month? What intrest rates do the cards have? Have you called to see if you could get a lower interest rate? Sorry if I seem nosy, but if you give the board a few more details the posters will be able to offer suggestions more specific to your situation.

If you're really tight for cash see if you can put your student loans into forbearance. Some other posters have mentioned that was a temporary measure that helped them. (From what I understand, you will still owe the full amount and intrest will probably continue to accrue, but you may be able to make reduced monthly payments or no monthly payments for a while. Maybe someone who's done this can post some more details.)

If you haven't already done so, check out the Living Below Your Means board. Be aware that there are a lot more posters there than on this board and inquiries aren't always answered quite as civilly as they are here, but there is a lot of good information there. (If you ignore all the SUV threads, that is.)
http://boards.fool.com/message.asp?id=1040018001439000
http://boards.fool.com/Message.asp?id=1040018005951000
http://boards.fool.com/Messages.asp?mid=15311610&bid=100158

Do you have a lot of stuff? How about holding a garage sale, selling stuff on ebay, listing books and cds on half.com, etc.? That might help get you a little extra money to put towards the debt.

You asked about the consumer credit counseling service, here's a link you might find helpful
http://www.debthelpnow.com/
They have a bunch of publications online you may find relevant
http://www.debthelpnow.com/A5555F/cccweb3.NSF/htmlmedia/consumer_issues.html





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Ok- I am just tooo excited. I just plugged in (to the best of my knowledge because I don't have my bills in front of me) all our debts, including the house payments, and it said- if i stay on track, that we could be totally debt free in 10 years. WOW. That is some powerful tool! I never imagined I'd ever pay off my house in less than 30 years!
When I did JUST my credit cards, it was just 2 years.
Thank you thank you thank you again!!
Margi <-- wayy too excited.


see, it's not so bad! You just need to make a GOOD budget and stick to it! Set money aside for vacations instead of charging them, things like that! You'll be fine!

Ishtar

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Margi...I've got a good feeling about this. You're gonna do it!

Kris
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Are you sure? I don't know where you are, you haven't filled out your profile. But around here, rooms rent for a MINIMUM of $500. Check out your newspaper and see if there are any listings for rooms-for-rent. See how much they are.

I think one of the options that someone else was saying is, go ahead, move to a two bedroom apt (cheaper) and rent out the ENTIRE house. Get 4 college kids, I'm pretty certain you could get enough rent to pay the mortgages. Charge the one that takes the master bedroom a little more than the others.


In this area, you wouldn't rent a 4-bedroom house to 4 college kids. You'd rent it to a bare minimum of five, and more likely 6 to 8.

And if you collect more than enough in rent on the house to cover your apartment rent plus the extra you'll probably have to pay for insurance, you're money ahead. You don't actually have to collect enough rent to cover the mortgage payments: if your payments are $1500, you can net $1000 in rental income, and rent an apartment for $800, that gives you $200 cash to put on some other bill. (But, renting to college students, beware of summer: insist on a 12-month lease, and then make sure that 9 months rent on the house is more than 12 months rent on your apartment.)
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When I did JUST my credit cards, it was just 2 years.

At a minimum, I'd do the credit cards, car loan, and second mortgage.

There's a lot to be said for nailing down a low-interest first mortgage, and then investing rather than paying it off.

However there's a lot to be said also for being completely debt free.

(I figure that if you could pay off all your debts within a month without crimping your lifestyle or gutting your retirement plans, then you ARE debt free. Even if your current arrangment does inlude a large mortgage.)
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Bret, you are right- I've been afraid to analyze our spending. I have a way to justify every purchase I make by saying, "it's not like I drive a Porsche or wear diamonds, I deserve this". But then, I always regret it.

My son is at grandma's for the rest of the week, so it will be a good time to drag out the bills, the old checkbooks, etc..
Thanks for the warm welcome and support.


Hi Margi!

As Bret very Foolishly said, and as we say here often, you truly do need to analyze the inflow and outflow. You see, unless you know where you are, you can't know where you're going (profound, isn't?) ;-)

This is the perfect week for you to do this while the little guy is visiting Grandma. What I'd suggest is that you just grit your teeth and do the following:

Make a clear list titled "inflow" and list absolutely every source of income. Then, (and this is the time-consuming part) make a list of every item that shows where the money is going. List every bill, every out of pocket expense, leaving nothing out. Be sure to include even the spending money that you may allot yourselves for the week, list the amounts for the newspaper, coffee at 7-11, everything.

Besides seeing where that money is going, you'll then be in a position to see what can be cut out. Even amounts that seem just a pittance can add up. Cut out the cable, cut out the designer coffees, cut out the name-brand cereals. Shop for cheaper insurance, call up the credit card companies and ask for more competitive rates.

Then, do some cleaning by going through the house and seeing what you no longer need, use or want. You may well find old lamps, books, furniture, toys, clothes, etc. Much of this can bring in extra money through a garage sale, or even better on eBay and half.com.

I totally understand your desire to be home with the little guy, and I respect that. Have you considered perhaps working a few hours at night when your husband is home and your son is in bed? That could bring in extra money which could be sent directly to the debts.

There are ways to handle the situation, and we'll be here along the way to help!

Good luck!

Tony
...but I still am...

Off2Aruba

Have questions about saving, spending and investing? Get the answers in The Motley Fool Money Guide!!
http://www.foolmart.com/Shopping/Product_View.asp?PRODUCT_ID=MF031_02&REF=CBO03123
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Hi Tony!
Thanks for the tips! I started last night and can't believe the number of "ATM $20" listed in my checkbook. Have no idea where all these "ATM $20" went!
As far as working another job when my son is sleeping, I doubt I could do that. I'm so tired and cranky when I get home from my full-time job, there is no way I could do another. And quitting my full-time job is right now out of the question. I'll have to put that on hold a couple years until we tame this debt monster.
=-)
My grandmother passed away a couple months ago and we are in process of selling her house. My mother wants to just dump everything in a dumpster and be done with it. She's already given away about 1/2 the stuff. I'm desperately trying to talk her into having a huge sale to try to make some money. She doesn't want to bother, but I'm insisting I'll do all the work. Even if I put everything out there and say 25 cents a piece, I could make hundreds! She had no antiques or valuables, just normal everyday things. But, we all need those things, right?
Thanks for making me feel welcome! You guys are truely inspiring!
Margi
f
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An estate sale could be quite profitable. :-)


I love estate sales -- great bargains!!!
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Hi Tony!
Thanks for the tips! I started last night and can't believe the number of "ATM $20" listed in my checkbook. Have no idea where all these "ATM $20" went!
As far as working another job when my son is sleeping, I doubt I could do that. I'm so tired and cranky when I get home from my full-time job, there is no way I could do another. And quitting my full-time job is right now out of the question. I'll have to put that on hold a couple years until we tame this debt monster.
=-)
My grandmother passed away a couple months ago and we are in process of selling her house. My mother wants to just dump everything in a dumpster and be done with it. She's already given away about 1/2 the stuff. I'm desperately trying to talk her into having a huge sale to try to make some money. She doesn't want to bother, but I'm insisting I'll do all the work. Even if I put everything out there and say 25 cents a piece, I could make hundreds! She had no antiques or valuables, just normal everyday things. But, we all need those things, right?
Thanks for making me feel welcome! You guys are truely inspiring!


Hi Margi!

I love your attitude! You're so positive, and that's so Foolish! I've no doubt that you're going to make fantastic strides in reducing your debt.

Looking as you did at the ATM charges is exactly what I was talking about. You're already getting a good picture of the spending, and that's what's going to allow you to make the changes. Good for you!!

You're 100% right in your idea to NOT allow the items from your grandmother's house to be tossed away. Here's what would happen if you did: You'd line up the street with all those things waiting for the garbabe collection, and within no time, you'd see people driving by, stopping and picking up all the goodies. What most of them would do then, is sell them. It's easy money!

Please keep working on your mother with this, and even just get some friends with vans to help you bring it all to your house. Then, you could go through it all, and either have that garage sale, or (and I like this better) list them on eBay. I'm sure there are treasures there that would bring in a LOT of extra loot which could go directly to the debt. :-)

Keep up the excellent work, Margi. You're already on your way!!

Tony
...but I still am...

Off2Aruba
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Hi, Margi! I don't have anything to add, but I wanted to welcome you to the board. I just discovered it a few months ago myself, and I wish I had found it years earlier!!

Like others have already said, it isn't stupid to wake up and realize you are in trouble with your debt. What is stupid is to not do anything about it!

Being over your head is so overwhelming, but just getting the numbers down is a help. At least you *know* where you are, instead of guessing.

Good luck on the estate sale-that will be a real help!
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"First, people come here looking for a magic solution to their debt problem. They think if they just get a second mortage or a 401K loan, that they are out of debt. "

I admit I haven't been reading this board all that long, but I have yet to see one person who asks about a 401k loan refer to it as a solution or imply that taking one means you are out of debt. I have seen the 401k never chorus say these things though.
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As far as working another job when my son is sleeping, I doubt I could do that. I'm so tired and cranky when I get home from my full-time job, there is no way I could do another.

Hi Margi!

Sounds like you are on track and probably can get your debt paid without the second job, but I just wanted to say that certain kinds of second jobs are not out of the question even with an exhausting full time job.

I too come home exhausted and cranky from work most days (during the school year when I am teaching), but I have a small second job as a rec assistant at the recreation center in the complex where I live -- usually Thursday nights and Saturday nights, until 10 pm. The work is very light, often I can read a book or watch TV at least part of the time, and it's only twice a week. I started doing this when I first moved here and I've never got around to quitting. I often wish I could just curl up at home or go to bed early instead of going to my shift, but it is really too good a deal to give up, and very doable.

Anyway, I just wanted to remind everyone that there are second jobs (including some you can do from home) that aren't nearly as strenuous as clerking at Home Depot or waiting tables, if you can find them.

Best of luck & keep us posted... I am looking forward to your happy dances!

Tanaquil
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<<My first (of many, i'm sure) to this board is:
If we can't sell the house for enough to pay off our 2nd mortgage, what then? Do you have to pay them right away or can you continue to make your payments? There is no way we could come up with the balance on that amount, since we just got the 2nd loan last year and have only been in the house 2.5 years. We will probably just make enough to pay off the 1st mortage and pay the realtor commission.
Thanks so much!
Margi
>>



Hmmmmm... decreased liquidity in selling the house due to a home equity loan. I hadn't thought of that as a consequence of that kind of loan. Thanks for extending my education.


Seattle Pioneer
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<<Aw Brett, I was afraid someone would say that (about not being able to sell my house.)
And yes, the car is also one of those upside down things.
My husband already has a 2nd job, has had it for 5 years - pretty stupid that we are still in so much debt, huh! I've thought about getting another job too, but as it is now, my son hardly ever sees the three of us together as a family. In fact, the whole reason I realized how bad off we are is because I wanted to quit work and stay home with him. (He's been having some "behavioral" issues lately and has been diagnosed with the dreaded AHDH.)
We are in process of getting rid of all the "extra's", and cutting back other expenses. It just seems like it will never get better.
Thanks for all your advice.
>>


It looks like what you have done is to trade your own personal liberty and your husband's for a house that's too big for your needs, a car that's more expensive than you need, and whatever other doodads you bought with the credit cards.

I'm not intending to beat you up with that comment ---it's a common problem. But it's a shame that in a country where we claim to be the "land of the free" that so many people are willing to trade their liberty for an excess of consumer junk of one kind or another.

Actually, money can be and ought to be a means to get financial security and personal liberty. Instead, we let money handcuff us to insecurity and credit card slavery.


I hope you will find the means to escape from that bondage.




Seattle Pioneer
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Since no one has mentioned it I would suggest that you apply for a economic hardship deferment on your student loans(have u consolidated yet?). I know the payments on $7000 SL are not much but they help especially if you are going to snowball your CC's.
You can also rent out a room in the house to a relative or friend. You can get a part-time job and work out shared babysitting schedules with other local parents.
I would even think about moving in with an elderly relative with a big house for a year or two while you rent out yours. You can pay a little rent and help with the upkeep and chores.
After you pay down the CC debt I would find a way to get rid of the car loans and get a couple of good used ones for under 10k total, pay cash and u will have no note and save on insurance too.
Lastly, when I had financial problems I ate alot of homemade soup, beans, rice, pasta, freshly brewed ice tea and hand squeezed lemonade. I had to say goodbye to my steaks and prime chicken breasts. I bought cheap whole chickens and cheap steaks but I marinated the hell out of them! Buying in bulk with coupons and sales were unbelieveable money savers.
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So, as Dr. Phil on Oprah would say...

Am I the only person that doesn't like Dr. Phil? Am I the only person that never watches Oprah anymore either? (although I've only watched her show occasionally in the past)...
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but with a small child in the house, I am very leary of having strangers live with us.

If you live near an airport, how about a pilot or a flight attendant. You get rent, and someone who is not there a lot of the time.

Louise
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I admit I haven't been reading this board all that long, but I have yet to see one person who asks about a 401k loan refer to it as a solution or imply that taking one means you are out of debt. I have seen the 401k never chorus say these things though.

WallStreet,

Jeez man, can't you ever give it a rest. I know it's not easy being on the minority side of an opinion and I have acknowledged both the risks and merits of your method. So, do you think you could just lighten up on the credibility attacks. It's really starting to get annoying. My post was not even remotely directed towards you. It was meant to help Margi who was thankful for my contribution.

Here is the post and the excerpt that I was specifically refering to. In this case she was talking about a student loan not a 401K loan, but the message was the same. She stated that as soon as she received the loan, she would become "Totally Debt Free". Reagrdles of the loan type, this was the type of delusion I was referring to.

Well, I have decided to return to school and received a 30,000 private student loan. Should I use the 30,000 to become totally debt free and pay off everything, or should I pay all my credit cards off and save the extra $6000??

http://boards.fool.com/Message.asp?mid=15205961

Bret
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"If you live near an airport, how about a pilot or a flight attendant. You get rent, and someone who is not there a lot of the time.

Louise "

Great idea, but O'hare is a good hour away from me. Keep those idea's coming everyone!!

Margi
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<<beware renting to friends, or shall I say "former friends", especially when they promise to fix your house & so forth. And you don't have any written agreements..... >>

It's sort of counter-intuitive, but I have found that when you enter into an important business-type arrangement with your friends, it is all the more important to be clear about everything, and get a written agreement that includes the mutually agreed-upon consequences if either of you should be unable to fulfill your part of the deal. This falls under the "good fences make good neighbors" idea, and will save your friendship in the long run. However, it does require tact and good communication skills to make it happen. And if somebody takes offense at the notion of a written agreement between friends, that's a very helpful red flag, suggesting that you might to run into troubles with them. In such a case, save the friendship by not going into a business deal with them.
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