Debt Advice Desperately Needed....Please!

[stemikger]

Sorry you are going through this. I didn't read all the replies, so I'm not sure if this was asked or if you mentioned.

What is the actual principal balance of your mortgage. How much do you have in your 401K. Dave Ramsey does say you can raid the 401K to save yourself from foreclosure. You don't have to take it out all at once, you can get a monthly check from it to cover the mortgage payments.

Of course there will be penalties, but if it means saving your home it might be something that you have to do. TALK TO AN ACCOUNTANT FIRST.

Also cancel cable completely. With the Digital conversion, T.V. is free and with a good rooftop antennal and a convertor box, you no longer will have a monthly cable bill.

So if you have a nice amount in a 401K, that might be what will save your home.

Good Luck.

This will pass, but right now it seems like it wont.

 

[AnastasiaTremaine]

. 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'.

I guess I'm confused as to how you got $35,000 in the hole if you've always had enough money to get by from month to month.

Seriously? How is this a helpful comment at all? She has admitted she's got a problem and asked for help, not judgment. If you don't have anything nice to say...

. I really do appreciate everything that you have all shared with me. Even if I don't like to hear it.... I do know what needs to be done with the DVC. I don't like it and I will go through some terrible mourning but I will do what is best for our family's situation.

I know it may seem trite, but letting the DVC go would break my heart a little bit, too. Just keep reminding yourself that you guys will bounce back from this. And you'll see Cinderella Castle again! This too shall pass...

 

[erinmomof2]

I read your last update and I wanted to say if you do sell your DVC contract it might be smarter to put that 3000-4000 towards paying for necessities rather than paying off the credit cards. Paying credit cards is far less important than paying for electricity, food, ect. Plus if you do need to decide to declare bankruptcy the credit card debt would most likely go away. I would just think seriously about paying the credit card company any money, because once they have it it's gone.

Also, could your DD 17 start babysitting in the home for the summer, just one or two children? That wouldn't affect your unemployment and it would bring in some extra money without worrying about her transportation. Or even babysitting for some children in the neighborhood at their home. Just an idea, don't know if it would work out or not.

Erin

 

[friskykitten]

. 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'.

I guess I'm confused as to how you got $35,000 in the hole if you've always had enough money to get by from month to month.

Well, now I am just going to be making excuses for myself but.... here goes.

The credit cards were used for big purchases like furnishing the house when we bought it. Getting by month to month meant being able to make all the payments on debt plus paying more than minimum payments; paying all utilities; groceries, neccessities and the 'surprises' I was refering to (although not in detail) is the field trips you child has to send in $60 dollars for, multiplied by four as they each go on one with their individual classes, etc. It did not include the cost of moving to Florida (put on credit cards), furniture, repair bills for things that go bust, etc. Those types of things got put on credit cards because we didn't have much in savings. And it added up over time.

Again, most will consider this an excuse and as I have said before I know there is no excuse. We did this to ourselves, no one else made us do it, and we will have to suffer the consequences for it. But that is what I meant by we had enough money to get by from month to month but not enough to add to savings.

 

[sk!mom]

I know it may be hard to believe but for the past two years we have been trying to pay the cc debt down as we knew the economy was 'slumping'. So we have rarely used them and have only been making payments (more than minimum) for the past two years but it is such a slow process that it feels like we have barely made a dent in them. So we were already trying to move in the right direction in the past two years and then we lost the jobs.

So, I only have one thing I can do......I will have to contact the Timeshare Store on Tuesday and put my contracts up for sale. It will bring in some money although not as much as others have proposed. Don't forget that we still have a loan on two of them. Once the loan is paid from those we might be looking at about a $3-4000 surplus on one and about $1000 on another. That will help with paying off a cc or two. And it would further reduce the monthly payments by the loan payments and the dues owed. I will start with the one's I owe money on. I really don't know how long it will take to sell them. The Timeshare Store's website has quite a long list of those that are up for sale at this time. And if I try to "give them away" Disney will exercise their right of first refusal. I will need to be smart about this.

I understand that the decision to sell DVC is a difficult one but the reality is, if you haven't been charging much and have been trying to pay off CC's for two years and still have a $35,000 balance then you couldn't afford DVC in the first place. That much consumer debt is an indication of living above your means for quite some time.

I think that you're on the right track but need to take the next step and sell the paid off contract, as well. That sell would be all profit as there isn't a loan to pay off and could be used to pay down CC debt or as a buffer until you secure employment. It would also free you from even more fees.

Has your DD considered applying for jobs that are within walking distance or possibly work as a Summer babysitter? I've noticed many teens and older leaving our subdivision and walking up the main road about a mile to Starbucks, a grocery store, Dollar Tree, Wal Greens, and several fastfood places. It might take many apps but most places like that are constantly hiring as that age group has a high turn over.

Good Luck to you-- I read an article yesterday predicting that the economy has hit bottom and will now begin a slow recovery, http://articles.moneycentral.msn.com/Investing/Extra/the-recession-it-is-over-economist-says.aspx Let's hope he's correct!

 

[erinmomof2]

Just wanted to add that given your situation if you do file bankruptcy you'd probably be looking at a Chapter 7 bankruptcy. Chapter 13 is for individuals who have enough money coming in each month to pay all the necessities and have enough left over to pay their creditors a certain percentage each month. If you cannot cover your monthly expenses with extra left over than you'd be looking at Chapter 7. Your house and vehicles would be protected as would be your 401k. I have a lot of experience with this, I worked for a Bankrupcty lawfirm for years... so if you have any questions let me know. Although I live in Michigan I assume the laws are at least similar from state to state.

erin

 

[fadingnebula]

Not to insult or piss you off, but are you looking for specifically an accounting job, or any job.

I say this because, I'm preparing to graduate with my Master's degree, and I've been watching all the "job hunting in a bad economy" newscasts, and Donny Deutsch said something that really hit home with me.

The problem ppl have now is that when they lose their jobs, they start looking and are too picky. THey only look for jobs like what they had before.

They need to be realistic, willing to do anything, even work fast food if they have to, in order to bring in at least some money..

Just a suggestion. It's something I may have to do myself. I'm willing to swallow my pride to pay the bills.

 

[robsmom]

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. QUOTE]


Hang in there, it will get better and easier. I would suggest adding the food stamps idea back to your list. You seem to have accepted that you need to sell the DVC. Getting rid of them may eliminate your only asset that is keeping your from assistance. Sell low and let disney do the right of refusal, this will get you quick fast cash which is what you need. Sell the paid off one first, not last. Will get you more cash. As previously said, don't pay credit cards. let the unsecured debt go. use the money from dvc to pay your mortage, electricity, gas etc. If you need your van, use the cash to keep that current. From your posts, once you sell the paid off dvc and use it to get your necessasities current, you really have no assets that would preclude you from food stamps. You are upside down in your house and with a 4 yr loan probably upside down in your car. Most states will not include 401K's in the asset check. You have paid taxes for years. You are entitled to help. With 5 kids, WIC and other food assistance should be available.

 

[Debbie Jean]

First a big hug to you FriskyKitten You are doing a great job at keeping your head and trying to make wise choices for yourself and your family.

You've gotten lots of really great advice so I don't have much I can add. But I am wondering where the DVC resale prices have dropped so much recently, would it actually be more economically wise to rent your points out for the time being? I can't recall how many you have, but if it is substantial this would give you some nice income for the time being... current points, borrowed points, etc. I understand the emotional attachment but I am wondering whether it actually makes sense financially to sell now. KWIM?

Good luck and just keep pushing on... it WILL get better!

 

[Mic]

I am so sorry for your situation. Truth be told, many of us are a paycheck or two away from being in the same boat, so don't beat yourself up too much. The simple fact is you have to re-evaluate need versus want, and DVC is not a need. I love my DVC, but I would not hesitate to get rid of it if I were in your shoes. Your family comes first. You NEED a house, you NEED a car, and you NEED food. If you sold the two DVC contracts you still owe money on, that would be extra money every month for basics. You might be able to hang on to the contract that is paid for, but what good would it be if you could not afford gas/food/tickets for a Disney vacation? I wish you lots of luck.

 

[robsmom]

First a big hug to you FriskyKitten You are doing a great job at keeping your head and trying to make wise choices for yourself and your family.

You've gotten lots of really great advice so I don't have much I can add. But I am wondering where the DVC resale prices have dropped so much recently, would it actually be more economically wise to rent your points out for the time being? I can't recall how many you have, but if it is substantial this would give you some nice income for the time being... current points, borrowed points, etc. I understand the emotional attachment but I am wondering whether it actually makes sense financially to sell now. KWIM?

Good luck and just keep pushing on... it WILL get better!

This is a great additional suggestion and it is not an either/or. Cancel this years trips and rent points until you can sell them. Also - not to be critical, but can i assume you cancelled your cash reservation already? If not, that is an obvious next step.

 

[dvcgirl]

Well, now I am just going to be making excuses for myself but.... here goes.

The credit cards were used for big purchases like furnishing the house when we bought it. Getting by month to month meant being able to make all the payments on debt plus paying more than minimum payments; paying all utilities; groceries, neccessities and the 'surprises' I was refering to (although not in detail) is the field trips you child has to send in $60 dollars for, multiplied by four as they each go on one with their individual classes, etc. It did not include the cost of moving to Florida (put on credit cards), furniture, repair bills for things that go bust, etc. Those types of things got put on credit cards because we didn't have much in savings. And it added up over time.

Again, most will consider this an excuse and as I have said before I know there is no excuse. We did this to ourselves, no one else made us do it, and we will have to suffer the consequences for it. But that is what I meant by we had enough money to get by from month to month but not enough to add to savings.

No need to beat yourself up. I'm sure it took a lot to post what you did here. I think you really understand the seriousness of your situation. Some of us around here do take out our "wet noodles" and beat people up from time to time. Some of us (myself included), posted about the DVC thing because it just sticks out as a sore thumb in your situation. And as you said yourself, it's not only the source of cash, but it's also the elimination of the maintenance payment and principal payment on part of a contract as well. A big swing and a win-win....which is definitely something you need right now.

I think you've gotten some great advice here. One thing I might caution is not to focus too much on the easier "little stuff", like "couponing" and canceling cable and renting movies from the library. I think all of that stuff is great for people who aren't in crisis and looking to trim their monthly expenses. And those little things do matter. But you're in a fight for your house right now....the big *BIG* thing for you guys now is income. I'd spend 99% of my time on that.

Again, best of luck!

 

[friskykitten]

This is a great additional suggestion and it is not an either/or. Cancel this years trips and rent points until you can sell them. Also - not to be critical, but can i assume you cancelled your cash reservation already? If not, that is an obvious next step.

We have cancelled our December reservations and plans. I am not sure what cash ressie you mean? Unless it was the Poly for the one night on July 4th. The only other trip we have planned cannot really be changed as we leave in six days. Family is flying down and staying with us for four days and family friends are staying with us for a couple of other days. We are staying in the villa, cooking our own food and not visiting any themeparks, attractions or doing any shopping other than for groceries which we have gift cards for already saved up. We would have to buy groceries whether we were on vacation or not. We live only 2.5 hours away so we are not spending money on airline tickets or 1000's of miles for gas. Cancelling that DVC ressie would do more harm than good at this point. The only extra money that will be spent by going rather than not is an extra tank of gas. So no that hasn't been cancelled. And if we did the points would go into holding account which has restrictions on it that makes renting it more difficult. Possible but more difficult.

All other plans have been curtailed. I know everyone will have differing opinioins on our decision to go ahead and take this week. But honestly, we will be spending no more than normal other than an extra tank of gas. That could be done just as easily here at home by taking the kids to the beach for the afternoon or running them to friends houses. We are merely going to spend the week away from our home in a villa that is already "paid for". We just won't be in our home just 2.5 hours away. And as we will be selling our DVC then I really don't want to give up my last opportunity to stay with DVC before it is all gone.

 

[robinb]

I know one of the last things I want to do is sell our DVC but I will if I need to.

This is a really crappy market for selling DVC. Have you considered renting out your points? I usually get $12 per point for my rentals. It wouldn't be as much as selling your DVC points, but it would be something.

 

[beccasmom]

Lots of and prayers for you! Please don't beat yourself up - focus on the future as the past is a closed book. Look ahead, not behind...

Some thoughts I will add -

http://www.wahm.com/ - stumbled upon this website when doing some research for a friend. Perhaps there is something available here that might work for you...

http://www.angelfoodministries.com/ This program - and others like it - is offered at churches nationwide. It might help with some of your grocery costs. There are no minimums, restrictions or applications.

http://www.shareflorida.org/menu.htm - another food bank type program

http://www.animalpantry.org/services.html Pet food bank in Central Florida

 

[bellebud]

just wanted to offer

i hate hearing stories like yours... this economy is so bad for so many people.

either renting your dvc points or selling the dvc is great - glad to hear you're thinking of that. you can always buy again resale when the time is right in the future. it also doesn't mean you won't see wdw again till you can afford dvc again... many, many people can never afford dvc and still enjoy disney - camping, values, offsite, etc.

i've heard of people cleaning other people's houses and offices (at night) - it's good money, flexible schedules, can really help in a pinch. your 17yo can also do this.

anyway, i have no other advice than what has been offered...

i wish you and your family the best!

 

[bellebud]

just wanted to offer

i hate hearing stories like yours... this economy is so bad for so many people.

either renting your dvc points or selling the dvc is great - glad to hear you're thinking of that. you can always buy again resale when the time is right in the future. it also doesn't mean you won't see wdw again till you can afford dvc again... many, many people can never afford dvc and still enjoy disney - camping, values, offsite, etc.

i've heard of people cleaning other people's houses and offices (at night) - it's good money, flexible schedules, can really help in a pinch. your 17yo can also do this.

anyway, i have no other advice than what has been offered...

i wish you and your family the best!

 

[61292cna]

 

[friskykitten]

Ok, I was just out mowing our front yard and almost stepped directly on a snake! Yikes! But he was a small fellow and I think I scared him more than he scared me. I yelled louder than he did though!

Probably a Red Rat or Corn snake. I really don't know my snakes so I am only guessing. We get a lot of Black Racers in our yard too. Two days ago I saw two Bobcats running down the street. They then circled my neighbors house and took off again. A beautiful site!

I just wanted to post one of the other things we are doing to help defray some of our smaller cost concerns. We have planted a small vegtable garden in our backyard. We have some tomatoe plants (both better boys and sweet 100's), some potatoes, cucumbers and cantaloupe. It won't feed us completely but the kids and I have had a great time planting and watching it grow. We have enjoyed several of the little tomatoes but are still waiting for the big tomatoes to mature and turn red. For those of you looking to make your grocery dollar go just a little bit further this is one idea I can pass on to you in return for the advice you have been giving me.

I really can't say thank you enough!

 

[Princess April]

I know I may get "flamed" for this but..... you have a few DVC contracts. As we have all agreed they must go... But do they all have to necessarily have to go?
Riddle me this: I think putting the DVC contracts that you owe on up for sale is a good idea, BUT, as was mentioned before there are a lot of contracts up for sale and they aren't fetching top $$$. So, how 'bout keeping the contracts that are fully paid and renting the points out and try to sell the others. Then, if things don't pick up (and you have sold the other ones) you can then put the paid ones up for sale. I know there are annual fees involved but how 'bout putting some of the rental profits aside to pay these fees.
As we all agree things will get better and then they can have something to look forward to, but if things continue to be bleak they can have the paid contracts to sell as a "plan b" ..... Any thoughts????