Debt Advice Desperately Needed....Please!

[friskykitten]

I am going to have to swallow my pride and admit the trouble we are in so that we can get some good advice and help. We are a family with five children and have always had just enough money to get by from month to month. Not enough to put into savings but enough to pay all of the bills and anything that might pop up as a 'surprise'.

Back in January my husband was laid-off from his great paying job. He has only his HS diploma so the fact that he was making so much more than I was was a blessing. Two days later I was laid-off from my job. A good paying one at that although I hated the darn thing. College grad in Accounting. Yes, I know, an accountant should know better than to get into the trouble we are in but it happend........

So the mortgage company granted us three months to skip our payments while we tried to find work. That grace period is now up. My husband found other work but it is only bringing in about 30% of what he used to make and only about $60 more than unemployment gives. I am on the unemployment so you can imagine what our monthly income is right now. We have a bit over $35,000 in credit card debt. Discover card just lowered our credit limit even though my credit history and report is spotless (other than a lot of cc debt). We also have a couple of DVC contracts that we owe money on in addition to cell phones, life insurance, car insurance, cable/phone/internet, car payment, electricity, dues, gas so DH can get to work, groceries and any incidentals (which are never small as we have the five children & pets who are always needing something).

I have still not found work so I am saving on my own gasoline and childcare. Due to that fact I have to have a job that pays at least $12.50/hr to break-even and head back to work. I have had only two interviews since January and I have been putting in approximately two resumes a day. So you can see that the pickings are really slim right now. Either that or I really suck at my job and don't know it....

Anyway, we are now going to have to start missing payments. I have decided that we MUST pay the mortgage first then some food and the car payment. Then the money is gone with only spending $50/week on groceries. But that won't pay for the car insurance so then what? And what happens when the credit card companies are not paid? When they shut off the electricity and have to cancel internet/phone/cable then I will have limited job hunting opportunities other than the library and they are pretty strict on what you can and cannot do.

I have tried my best to be positive and kept telling myself that I would have a job by now so we could start paying the mortgage again and things would work out. Now I now that isn't going to happen anytime soon and I am scared to death as to what my family is going to go through from here on out.

Any suggestions, advice, help or personal experiences would be greatly appreciated. You can PM me if you would rather not publically post an answer. What things should we concentrate on paying? What should we let go? How is this going to affect everything from credit scores to collections? How long will we be ruined? How long can a family live without electricity? Where do you take animals when shelters are so full that they are not taking them anymore? Please help and thank you for any advice you can give. On top of everything else, I caught the dogs stuck together this afternoon. We had no idea Crystal was in heat now she is probably pregnant. What else is going to go wrong????

 

[lastminutemom]

Could you rent for less than your mortgage payment?

Clark Howard has changed his advice on this these days -- he says car payment first, because you need a car to job hunt and/or get to work.

You need to let your bank know that foreclosure looms and see what they are willing to do for you. I suspect that you may be upside down in your loan because of the huge loses in FL real estate values but perhaps you have built enough equity to not be. But I also think the bank is probably not so eager to have another home in FL.

The credit cards are unsecured debt -- let them ride if you have to. The banks took a risk letting you have that much credit, now they need to wait until you are on more solid ground.

 

[friskykitten]

Renting a home with five children is almost impossible. No one wants to take a chance that that many children will ruin their home. Add in the animals and the almost impossible becomes impossible.

I am not sure about the FL bankruptcy laws yet. I always thought, maybe incorrectly, that all states allowed for the home to be saved in a bankruptcy. Still, I really don't want to go that route unless we have to. We have a nice fixed rate loan at a great interest rate and did everything right when we bought it. It is now valued at about $80,000 less than we owe on it. I am grateful that we didn't refinance it for what it was once worth or we would be upside down by almost $250,000. We were always able to pay our debt until we lost our jobs. And I will pay everything back that we owe as it is our debt to pay. I hate to lose everything that we have worked for.

I will be calling our mortgage company on Monday to let them know where we stand but at this time they are the only ones who have given us any relief in the matter. So I hate to ask them to go longer without our payment. And since our loan is over 5% more than the value of the home I am pretty sure we do not qualify for Obama's stimulus help for mortgage modification.

 

[msmayor]

Sell the DVC contracts. If you are $35K in debt on CC and still owe on DVC, you probably shouldn't have purchased it in the first place.

Its more important that you climb out of this hole than own a timeshare that you won't be able to use because of additional travel costs OR pay the maintenance fees on.

 

[Princess April]

I have been blessed and I never have had to declare bankruptcy, but yes, Florida law does cover the home in bankruptcy cases.
As far as other things.... well all I can suggest is lot's of prayers , I'll send some your way. I'm guessing you should give up any extras at this point, cut the cable, cell phones and internet. Have you considered requesting food stamps? I know this may not be a popular solution but heck, any port in a storm. Can you hold a yard sale to raise funds? With 5 kids I bet you have lot's of clothing and toys that could be sold. Do you and your DH have any "toys" that could be sold? A jet ski or a motorcycle? You can place ads on Craig's List for free! As far as needed to use the internet... the public library offers free internet service. Call 211 (if it is available to you) This is a number run by United Way and it is used to direct people to services that are offered by the government as well as other charity organizations. I know you are looking for a legitimate job (bravo) but have you considered looking for under the table work until you can secure a legit job? Like, in-home child care or maybe house cleaning for others. just keep your head up and keep the faith and everything will turn out. You know what is great about hitting rock bottom? You have no where to go but up! Also, check out my siggie for words I live by......

 

[idatwilight]

I agree about DVC--whatever your circumstances were when you bought it, they've changed now, and you've gotta get rid of those contracts ASAP. Good luck.

 

[idatwilight]

Also, I only pay for the most basic, basic cable. (Well, I also have DVR.) I save more than $50 a month. Anything that's not on-network that I want to watch, I watch on the Internet. Anything that's not available or not free, I simply don't watch. The only TV show I pay for is Law and Order: Criminal Intent--I have a subscription with Amazon for less than $2 an episode.

 

[erinmomof2]

I don't think this would be a popular solution, but if it were me.. I would try to find someplace to rent that is cheaper than the mortgage. If the animals were getting in the way of my family eating properly, having a roof over their head, and having car insurance... well the animals would have to go. I know this is probably not what you want to hear, but with the cost of pet supplies and the if that is what makes finding a cheaper place to live impossible, to me it seems like something that has to happen. We were just at the local animal shelter and the reason many of the animals were there is that they could no longer be afforded by their owners. It's a sad reality that many people are facing. If you don't want to go the shelter route perhaps a family or friend could take them in for the time being. Or do you have a family member who would let you stay with them till your feet are back on the ground. I know with 5 kids this might be difficult, but it might be the best solution so that you are able to afford the necessities.

I hope that you are able to find a solution to your problems and that you find decent work soon.

Erin

 

[etoiles]

Can you rent a room in your home to someone? That could bring in additional income. I always see ads on Craigslist of people looking to rent a room.

 

[C.Ann]

I can offer you this:

I hope the people here will help you - as opposed to critcizing.. These types of threads can go downhill fast..

Good luck to you and your family..

 

[friskykitten]

Thank you so much for the kind words and prayers. I really never dreamed it would come to this.

I hadn't thought of the United Way but I will see if that number will work for us. We will not qualify for food stamps a home and car and 401k, etc. Usually you can only have a very low amount of assets to qualify for food stamps. In Missouri it was $2000. I will be applying for whatever services I can find starting on Monday. I hear what you say about 'under the table' work but can you believe that I would feel so guilty about lying to the unemployment office that I would fess up and lose my unemployment check? One of the questions they ask when you are 'claiming your weeks' is did you make any money in such and such a week. My husband said yes to that question before he got another job and was told he no longer qualified. Luckily he got a job that following week.

We really don't own any adult toys. Our DVC was our 'toy' and we owned most of them before we moved and added on the credit card debt. So although msmayor is 100% correct that we shouldn't have purchased DVC with the amount of debt we have now, we accumulated the cc debt after we moved to Florida and way after we got our original DVC loans. One is paid off completely, one is almost paid off but the other one we purchased only a couple of years ago when the economy was in full swing and financed so we do still owe on it. That one, you are correct, we should not have purchased. I really don't want to sell them as they are our only 'toy' but I may have no choice in the matter. Either sell them or lose them in bankruptcy I guess.

We had a garage sale a month ago and sold one thing for $5.00. We are already not running the A/C and boy is it hot in here! Cable/phone/internet will be the first thing to go. Our animals are part of our family so they will be included in the grocery dollars unless I can find a "foster parent" until we can get back on our feet. The children will not go hungary even if I have to visit the food bank to get them something to eat.

Our home is only 1500 sq ft so we have two boys in one room and two girls in the other room. The baby shares our room so we don't have any extra rooms to rent out. Can you imagine anyone wanting to live with us? Maybe I could get someone to pay us for not being forced to live in our home!

As soon as I get a job we will be fine.....I just don't know what is going to happen in the mean time or how long it will be before a job comes through. I really thougt I would be employed within these five months so I have procrastinated one selling off our stuff piece by piece.

Again, I thank each of you for your help and suggestions. I already know how horrible we are for getting into this situation to begin with, although in our defense we couldn't control losing our jobs let alone two days apart in the same week. And I already know that we have made some bad credit decisions so I appreciate that you are being supportive instead of demoralizing me. I do that just fine on my own!

 

[kellia]

Big Hugs!! Definately don't pay the cc's, or send them $10/mo or so to confuse their computers so they don't harass you for a while. Also, I'd dump the DVC's, though I have no idea how to go about doing that. Bankrupcy would stop you from having to pay the cc's and possibly save your house for now, but do you have the income to keep making the payment even if you didn't have all of your other debt? If not, then you'll probably need to start looking for somewhere cheaper to rent. I'd start selling everything I possibly could. Downgrade the cars, or get by with just the one dh needs to drive to work for now, or at least take the car insurance off one and don't drive it for now (assuming there isn't a loan on it, then you probably have to keep it on). Go through all bills and see what you can downsize or do without. I agree with the pp about finding someone else to take the pets, family comes before animals, though I'm sure not all rentals won't let you have pets. Have you looked for jobs out of town or state? I hope you find something soon, we are in Mich and I know so many people in the same situation you are in.

 

[pal-mickey]

Sorry to hear about your troubles. You need to get rid of the 'extras'. Maybe you could keep the cable just have less channels. What are the ages of your children? Maybe you could get work on an off shift. It may not be an accounting job, but any money in this situation may help. We went through a very rough financial time about 3 years ago. Unfortunately pets are not a necessity. I know we had to stop taking the dog to the vet for shots.

 

[pixie921]

friskykitten, I'm so sorry for the situation your family is in. You're certainly not alone, as I'm sure you know! Does your community have any support groups or services you can avail yourself of?

I'm asking because I was on our Township's site a couple of weeks ago to check on something and all over the home page were listings and links for ways residents could seek financial relief or assistance.

We lost 3/4 of our income when my husband was laid off 5 years ago, so I know what it feels like to be in your shoes. What he and I did to get through that time was grab every little job we could think of to pick up money, and by the grace of God, we never fell behind on anything. I know the situation is different now with so many people being out of work at the same time, but keep your eyes peeled constantly for any kind of work you can find that can help supplement your income. Even $10 or $20 for babysitting or whatever can help w/groceries.

The mortgage thing is difficult, even with the new assistance plans in place. We have a family friend who has been out of steady, full-time work for years (lost her job while undergoing breast cancer treatment and has been dealing with clinical depression since then) and when she called her mortgage company they told her she was "too poor" for assistance. In order for them to consider helping her, she'd have to make $300 more per month.

As far as your dog, here's hoping she's not pregnant. And if it turns out by some miracle that she isn't, I hope you'll consider getting her spayed! Most Humane Societies will spay at little or no cost, especially if a family is in financial need.

Good luck, and hang in there. I know it's hard, but as long as you're working at things together, you'll get through this.

 

[RachaelA]

Sorry its this bad for you.

Cable needs to go (and so does $2 an episode for law and order). Internet needs to go (use the library to apply for jobs). Downgrade your cell phones to as little as possible or cancel them if you can.

Start selling everything you can on Craigslist. Sell DVC (all of them including the paid off ones).

A last comment, spay and neuter your dogs!

Good luck! Check with the food banks in your area they can probably help.

 

[blondietink]

Sell DVC first and second, cancel cable and internet. You can also cancel phone service and get cheap prepaid cell phones. Move to a cheaper home if you can. Take public transportation if it is available in your area or car pool. Good luck.

 

[Where'sPiglet?]

I don't have any advice, just wanted to offer a .

Are you only looking locally for jobs or are you looking nationally? Since you both are unemployed/underemployed you may consider broadening your job search to a national level if you have not already.

 

[mrsbornkuntry]

I am so sorry you are going through this right now .

If you or your DH have a car payment, could you sell your car and buy something cheaper with the proceeds to eliminate a car payment?

I have to agree with the poster that suggested finding a new home for your pets, maybe with a family member? I understand feeling that they're part of your family, but would you really choose to keep a pet over electricity for your family? Also, if your dog is pregnant is it a breed that maybe you could sell the pups to bring in some money?

I disagree that it is impossible to find a home to rent with 5 children. I have never owned a home, actually DH and I have rented 15 homes in our 13 years of marriage (moved because of the military) and have never encountered a problem like that. I would think that with the housing and job market so poor in FL right now there would be alot of people looking to rent out their homes to avoid foreclosure or if they move for a job. Just an idea to think about.

I really hope you are able to find a job soon.

 

[a1tinkfans]

I am so sorry you are in this situation. I will say a prayer for you and your family!!!

I agree with the others....unfortunately, I too think all the DVC should go.....cut all the bills as low as possible, cut out cells, get a prepaid plan, A t & T cheap, convenient and very cost saving. Increase deductibles on car/s, go room by room and start selling items.
PLEASE look for someone to help you with your pets, they are a part of your family, but the $$ needs to be for your children....do you have a family memeber to take one/them for a while to help you out?
I want to wish you Luck and much success in finding a job for you and a better one for your husband.
Your story is heartbreaking on so many levels, but your are all HEALTHY and TOGETHER, stay positive and stay strong for your family!!

 

[Disneefun]

First of all, I'm so sorry this is happening. It stinks, big time. My advice is the same as the other posters to cancel everything you can, sell everything you can, (even if you think it's not worth anything, you might be surprised what people will pay for), and downgrade everything immediately. The faster you act, the more you can save. nothing is sacred now, and everything is on the chopping block, even DVC.

I don't know specifically how much you're getting on unemployment, but I think you could do better by stringing together some part time work (like working at Target in the morning shift and working Starbucks on the afternoon shift, for example), doing some "freelancing" doing yard work, cleaning houses, or something like that, and you can probably find some small businesses/sole proprietors that need help with accounting. I know it's not glamorous and with 5 kids the logistics could be challenging, but until you find a "real" job, you need more income than unemployment provides. Either you or DH or both are going to have to get extra jobs and/or take on some freelance work. That means you're going to have to put on your creative hats and figure out how to get that extra money.

Years ago in the recession of the early 90's we both were laid off, DH was working 2 part times jobs, I was working 2 jobs and we were both taking in any kind of extra work we could get -- I was doing cleaning and alterations and freelancing my "real" work, and her was doing yard work and freelancing, too. We didn't sleep much, and it was like a bad sitcom with us both coming and going and being in and out at all hours, eating weird meals, and not sleeping. But we kept our heads above water and managed. Was it hard and inconvenient? Oh, yeah. And painful. But it had to be done, so it got done. Just remember it's not forever and you can survive it. Good luck.