Debt Advice Desperately Needed....Please!

[tinkarooni]

I just read the entire post and I have to say I feel like the OP was not completely coming clean with her starting post....there is a pattern of MAJOR spending and all the talk on these boards is not going to help a bit if the OP does not change her entire mind set.
I hate to be so bold but until the OP sees how crazy her spending is (650 DVC points and still wants to spend cash on Club Level Deluxes just to see new places???), she will not take any of the advise posted to heart, especially if she does take this next trip. (How can you go to Disney and just sit in the room/pool all day and not spend any other money??? not being real )
She wants to confront the problem and that is to be commended (the first step is the hardest) but actions are the key. The OP knows what she must do and maybe when she actually hits rock bottom, the posts on here will mean something.

I totally agree and stated so in an earlier post. I was reading page after page of hugs and best wishes and so on and than finally someone who told her it was OK to go to Disney next week since all it would cost was a tank of gas. I personally just couldn't stand it anymore. If you have $50 to feed all those kids for a week than you can not afford the cost of even "just a tank of gas." That type of thinking is what got OP here. She doesn't need to go to Disney because she needs the break or whatever. Now is not the time for rest, now is the time for some fancy footwork and guerilla tactics to get her family back on the road to financial recovery.

I think the flames come out when people who would love to go to Disney three times in a year, or own 650 DVC points don't, because they make the right financial choices. Than we get a post like this one from OP. While I too feel for the OP and her children, the bottom line is the harsh truth is just what she needs to hear. It's a classic story about a grasshopper and some ants.

 

[yitbos96bb]

Check out Freecycle.com...

There are usually a lot of good things there that might help you... even toys and such to help occupy the kids in these troubled times without worrying about buying new things.

We have gotten baby items, toys, etc. I have given away furniture and other things i don't want.

 

[yitbos96bb]

Craigslist got rid of the erotic ads. The AGs will lose those cases, as its easy enough to point out many newspaper classified ads offer the same type of services.

Outside of the erotic and personal ads, there is rarely trouble. Once in a while with a hot item like a PS3, XBOX 360, etc you'll here of a robbery or someone getting a box of rocks, but for the most part its fine.

I have bought and sold many things on CL as well as gotten two jobs from there. No need to worry.

Not to stray off the subject, but I would be extremely cautious in recommending Craigslist, these days, given the fact that Attorneys General in several states are looking at taking legal action against CL for running the equivalent of an online brothel.

I know it's free, but IMO, it's something I don't completely trust, either...

Otherwise, my 2 cents' worth to the OP is to sell those DVC contracts (you already live in FL -- DVC is a major luxury, at this point!) and start cutting corners where necessary with little things like cell phones/CATV/home phone/ISP.

And yes, you will have to say "no" a few times when your kids ask for things...IMO, it sure beats being homeless!

 

[yitbos96bb]

Just to update this...

The credit fees, etc will be changing next year with the passage of the Credit Card Bill. Unfortunately, enough people on the take weakened it a bit, but there are still some decent protections.

I don't think anyone here would be "pleased to know that we will lose everything that we have."

And while you may have understood that keeping the same lifestyle after you got laid off was a mistake, I think there is a bigger picture here that you are missing.

And I say this not to be harsh, pour salt on your wounds, or anything like that. There are two mistakes that many people make, that can have dire consequences:

1- No matter how good one's income is, if you can't put aside some money into a savings account so that you have at least 5-6 months income saved up, you are living beyond your means. It is really that simple. If you can't save, you need to cut back on expenses. Now, I know many people don't do this, and it is fairly common, but it is still a mistake. The days when one person would get a job out of high school or college and stay with that company until retirement are long gone. Almost everyone will get laid off at least once in life, or will need to change jobs at least once in life.

So when you say you had a great income, it certainly might have been great, but it was not enough to support your lifestyle if you couldn't save.


2- The second mistake people make is thinking that as long as you make a minimum payment on a credit card, your credit score will be ok and they won't ever reduce your credit. Credit rating companies look not only at whether you are paying something, but also at the proportion of amount owed/credit and amount owed/assets. Once those things start getting up there, your credit score will start to go down, your credit lines will either be cut or your interest rates will go up. And then you will be in a trap: increasing interest rates just as your debt is going up.



So this is not pouring salt into your wounds or anything like that, but in reality, even if you got jobs tomorrow that paid exactly what you used to make, you still could not afford your previous lifestyle.


Finally, an important point: why does paying for the groceries with gift cards make you think that trip is affordable? Unless those are gift cards that are exclusive to the stores you will be visiting on your trip, that is money you could be using at home to feed your family. If it is one of those widely accepted gift cards, it is just as good as money, and you will be spending it on you trip just as you would do with cash. And even if it is exclusive to the stores near where you will be staying, you could always sell them to your relatives and keep the money. Sad and embarrassing, yes, but oh so much better than trying to feed a family of 7 on 50 dollars a week.

 

[Kay1]

First off, don't be embarrassed. Things happen in life, and sometimes people are dealt a bad break. Remember, a majority of bankruptcies in the country are due to the medical expenses or job loss... NOT from irresponsible spending as some ignorant people pretend.

In my opinion, you have a couple of options:

1) Sell the house, the DVC contracts, etc. Either use that money to pay off your credit cards or settle the debt... settling will hurt your credit unfortunately. This will mean you'd have to move to a cheaper house or rent, but if you don't settle, your credit will remain in tact for the most part.

2) Let your credit cards lapse and then call and settle. This will damage your credit and you will need the amount you settle to pay pretty fast. But it will lower your debt.

3) Declare chapter 7 or 11 bankruptcy. This option will hurt your credit, but it will most likely allow you to keep your house, car, etc. It will give you a new beginning. You will probably lose the DVC contracts, as well as some other luxuries, but you will be in a position that you can hopefully begin saving afterward. Bankruptcy isn't the credit scarlet letter that it was years ago. If you plan correctly, you can get loans easily in a matter of months or years. Some car companies will let you get a car loan immediately after a BK closes. Its a tough option, but if you feel there is NO WAY OUT, it may be your best option.

Either way, I'd call a credit counselor or a BK attorney for some advice. Most BK attorney's offer a free consultation. Credit Counselors can help work something out.

I'd also call the Mortgage company and see if there is any thing that can be done. Will all the recent spate of economic recovery laws, there might be something... especially if its a Fanny Mae/Freddy Mac loan.

And to let you know, we had to declare Bankruptcy at one point. It really ended up giving us a new start that we learned from. We had over $100,000 in debt from a business we started that failed. It was our only way out at the time. It was hard to do, but I'm glad we did. Regardless of what some idiots say, Bankruptcy is meant to be a second chance. Many famous and successful people have filed. As long as people learn from it and don't become serial filers (and that is rare), it is the second chance many people need.

The OP has admitted she made some poor choices but say she intends to repay her debts.

 

[Dorisk3]

Unbelievable. Digging up old posts just to handslap the OP? Why would you do that? Just to make her feel worse, or to show that she's not "worthy" of help? Or just because, as you said yourself, it's "fun"?? That's just sad. And mean.

Actually, you know what's sad- coming on here expecting sympathy, when frankly, you don't really deserve any!

 

[hockeyprincess]

I hope that wall*e2008 has no bones in his/her backyard.....WOW the shame of posting a "Haha look at what she did" post will surely come back and bite you in the a$$. Karma's a bytch and guess what, I can be too!

You call it black and white, I call it harassment.... get over your selfish and conceited self and help with good sound advice, not finger pointing or shut it, really.....

Everyone is hurting right now and I certainly for one hope that no one here suffers any more than they are right now. Let's help each other though, not bash each other, really. Aren't we better than that? I love this board because I thought we were. At least most of us are.

Count your blessings everyone, in a moments time it could all be gone.

OP I sent you a PM...if you want to contact me personally please feel free to do so.

 

[yitbos96bb]

The OP has admitted she made some poor choices but say she intends to repay her debts.

And that makes my advice less relevant how?

 

[yitbos96bb]

Actually, you know what's sad- coming on here expecting sympathy, when frankly, you don't really deserve any!

Even sadder... acting like a bitter tool on an internet forum.

Unfortunately, I'm forbidden to use the words that truly should be used to describe your post.

 

[JoiseyMom]

Actually, you know what's sad- coming on here expecting sympathy, when frankly, you don't really deserve any!

What's really sad is your lack of compassion. She didn't come here for sympathy, she came for advice. She got what she needed. She knows they screwed up, she knows she needs to sell her DVC. She has gotten some great advice, some harsh advice, but she doesn't need to be beaten!

You have no idea what it feels like to be in her shoes!! She admits it is all their fault and she wants to pay off everything, she also doesn't want to work off the books adn collect unemployment! Brava for her!! These are tough times, and one day, you might be in her shoes, or close to it.

There is nothing wrong with being kind!

 

[punkin]

There is nothing wrong with being kind!

Can we all please try to remember this?

I enjoyed reading some of the advice on this thread. I thought it was helpful and realistic, particularly dvcgirl and crisi. OP needs to understand how bad her situation is, but she does not need to be browbeaten.

 

[MrsPete]

I know the power of coupons and although we don't subscribe to a newspaper (to save money)

I have two hints for saving money on food, and they are MUCH better than clipping coupons: 1) Search out unusual places to buy food. I buy from two salvage food places -- they sell damaged packages of food that was meant to go to restaurants. I can almost always buy meat for less than $2/pound and French fries $1/10 pounds. Also, some ethnic food stores have limited choices but low prices. Do you have a Mormon cannery nearby? Seriously, search and see what's available in your area. The supermarket is -- by far -- the most expensive place to buy food. 2) Look at cutting your beverage bill. The typical family spends 30% of its food budget on beverages, most of which add little nutrition to the family's diet. Watching your beverages can really save on the bottom line.

Daycare in Florida has a lot of "rules" that have to be followed in order to watch children including that you are supposed to be licensed with the state. In order to be licensed you have to pay a fee, attend classes for more fees, have a certain amount of sq ft designated to the daycare space, etc.

If I were going to keep children in my house, I'd keep after-school care kids. You can keep more kids, and although they spend fewer hours with you, they pay almost as much as a full-time day care kid! You could use your older children as "homework consultants" for after-school kids; parents would LOVE to know that their children's homework would already be done when they picked them up. I'm thinking that if the 17-year old is your "employee", you can qualify to have a couple more after-school kids -- of course, it'll add to your work load, and she'll have to really work with you, but as you said, it's tough for teens to find work these days, so this could be good for her too.

Any temporary work would negate my unemployment. If it was for three or more months in length that would be fine but a two week assignment is not worth losing unemployment for.

True, but as your unemployment draws near to an end, it would be a good idea to go ahead and sign up with several temp agencies. IF you're not working by the time your unemployment runs out, you'll be set to start temping right away.

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.

Though I would normally say, "Pay off the bills right away!", I don't see how you're going to do it in this situation. I probably would hold onto any profits you make JUST IN CASE work doesn't come along. At worst, the credit card companies will add to your already-too-high balance, but you'll have that money with which to feed your kids. You'll have to deal with the bills at some time in the future, BUT it'll buy you some time right this minute.

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.

You make a good point. Over the years we've known a number of people who've been out of work, and it seems that some are ONLY willing to accept "the job" in their chosen field. DH and I don't understand that. Though we both have college degrees, if we were out of work, we would spend a reasonable amount of time looking for "the job" . . . then we'd accept a job waiting tables or delivering pizzas. We wouldn't stop looking for "the job", but we would fill in with make-do work in the meantime. It just seems like common sense to us.

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.

If the OP's family had lost one job and had a moderate amount of credit card debt, this would be good advice . . . but this is a family in deep crisis, and a band-aid isn't going to work. Renting the points would help a little right now. They need big help for the next few years.

Don't pay the credit cards if you don't have the money . . . you won't be hurting anyone (except your credit rating, and even that takes a while) or taking food out of someone else's mouth by not paying.

Actually, every time someone fails to pay their credit card bill, it raises prices for everyone.

Prior to this crisis you were not making enough money to save anything, but you were making enough money to own DVC, have cable, and have expensive hobbies. I'm not saying this as a judgemental statement - but I want you to recognize that back then you set priorities that have valued having luxuries rather than saving. The hard choices you were unwilling to make then need to be made now.

Though it sounds harsh, it is true. You over-spent, and now that's making a bad situation (job loss) a very, very bad situation. You'll get over this bad time, and when you do, you'll have to live within your means.

To get yourself into a realistic budget, you may need to look for a less expensive place to live. Will your 17-year old be going away to college in the relatively near future? If so, you may be able to make do with less space in the future.

 

[snowbunny]

I don't think any of us wish your situation on you or anyone else. We all know how easy it is to end up there. Just be aware of how tenuous your position truly is.

Absolutely true and I hope OP you did not take it otherwise. My DH and I are both self employed and we worry daily - or more - that one of us will lose our contract. I have made my mortgage payments through the fall and am still paying ahead, we are paying down our principal as fast as we can and are building up a cushion for if or when it happens. No one is immune and the danger is in thinking otherwise. Good luck to you.

 

[bsusanmb]

I don't know if anyone has given you this information...I am a follower of Suze Orman. She recommends Consumer Credit Counseling Services...their website if CCCServices.com. They are the BEST not for profit debt counseling agency. They are very well respected nationally. They take your CC debt and any debt over $100 that is unsecured and will lower your interest rates and payments into one sum of money. They send contracts out to your creditors and then you send the payment to CCCS and they pay the debts for you over 4 to 5 years. They charge you a minimal amount, and sometimes nothing at all.

You have done the best thing by admitting you have a problem. We all make mistakes, and as long as we learn from them, we grow.

If you have any questions about CCCS please pm me. Blessings to you and your family
Susan

 

[KandD]

I'm really sorry for what you are going through...I don't have much advice but just thought I would add a couple of things.

In my community there are a ton of programs going on for people in financial debt right now, the problem is that a lot of people don't know about them. There are constantly seminars on preventing foreclosing, helping to eliminate debt, and even some free legal and financial advice. Believe it or not there have also been quite a few job fairs around here (several at the community colleges). Some of these seminars/programs even have free babysitting services if you go. My suggestion is maybe talk to a local nonprofit or social services and see if they have any info on what is being offered in your area.

Babysitting and/or housecleaning is really an excellent idea. (That way you don't have to find child care for your kids while you bring in some extra cash).

I've been through pretty much the whole thread and I don't know if I missed it or if you didn't say it but maybe you should be looking for jobs outside of your field. You never know what you may find. If your friends and family don't know what is going on I don't blame you for not telling them but they are another resource of letting you know job openings and/or getting your name out there.

Good luck with everything, I am really sorry that you are going through this. just remember to breathe.

 

[crisi]

What you have no idea of and what I have not revealed is that we used to have a very good income.

I beg to differ. Your first post:

Not enough to put into savings but enough to pay all of the bills and anything that might pop up as a 'surprise'.

Again, harsh reality. You WERE living beyond your means. Many of us move and live with furniture that doesn't really match the house, we replace it over time without taking on any debt. Many of us own DVC, and we don't have loans for it. Many of us do manage to save as well as pay all our bills - with incomes that are more modest than "very good."

At some point you paid your credit card bills in full, but at some point your expenses increased or your income decreased or you just got behind. It happens. But one of the reasons you are taking such a hard time here and now is that your life changed months ago - or much longer than that - and you just had this epiphany that you can't afford to stay at the Poly in the last two weeks. You've been giving Cleopatra a run for her money.

I'm sure you are also getting blowback because this is the internet. And people are saying to you what they can't say to their brother in law, or their best friend from high school, their coworker, or the other people in our lives we have to keep our mouths zipped up in front of after years and years of "we just bought a new Town and Country minivan" and "we had another lovely vacation" who are now having to pay the piper, without money to pay him with. We've had several of those threads recently. And its hard to have compassion for people who have rubbed your nose in what they have for years when they run into trouble. They never seemed to feel sorry for you that you were foregoing a vacation in order to stick a little extra aside for a rainy day.

 

[MrsPooh]

I am sorry that you're dealing with this. It is hard to accept and make changes when your income changes so dramatically.

There have been some great comments, some have been harsh and some have not come across very nice.

I hope mine will not be interpreted as harsh but I do not understand why you are considering the possibility of losing your home or having trouble feeding kids and pets but still have money in a 401K. We've been there/done that so I truly do understand. We cashed in our 401Ks long before we considered receiving any type of public assistance. Our opinion was that we could not expect taxpayers to help support our family when we had money we could use.

We have no savings and no 401Ks. We stopped paying on life insurance policies. We gave the vehicle with a payment back to the bank and used part of our tax return to buy a junker outright. We do owe the bank on the returned vehicle but we had six months before the even contacted us with an amount due and then we could work out payment arrangements. We sold everything we could imagine - the hot tub, the motorcycle, an unused custom bicycle, house plants, kids clothing - you name it we sold it.

We have made it through and are keeping our heads above water even though dh lost his job of one year last month and we haven't started to receive unemployment yet.

I wish you patience and the ability to come to terms with where you are now. We had to adjust to going from a good middle/upper-middle class income to poverty level after two job losses and two major illnesses in our family. The first step is coming to terms that you've got to give up everything that was "important" and learn to appreciate the truly important things.

I hope things improve for you soon.

 

[friskykitten]

I beg to differ. Your first post:


Again, harsh reality. You WERE living beyond your means. Many of us move and live with furniture that doesn't really match the house, we replace it over time without taking on any debt. Many of us own DVC, and we don't have loans for it. Many of us do manage to save as well as pay all our bills - with incomes that are more modest than "very good."

At some point you paid your credit card bills in full, but at some point your expenses increased or your income decreased or you just got behind. It happens. But one of the reasons you are taking such a hard time here and now is that your life changed months ago - or much longer than that - and you just had this epiphany that you can't afford to stay at the Poly in the last two weeks. You've been giving Cleopatra a run for her money.

I'm sure you are also getting blowback because this is the internet. And people are saying to you what they can't say to their brother in law, or their best friend from high school, their coworker, or the other people in our lives we have to keep our mouths zipped up in front of after years and years of "we just bought a new Town and Country minivan" and "we had another lovely vacation" who are now having to pay the piper, without money to pay him with. We've had several of those threads recently. And its hard to have compassion for people who have rubbed your nose in what they have for years when they run into trouble. They never seemed to feel sorry for you that you were foregoing a vacation in order to stick a little extra aside for a rainy day.

Very good points and true Crisi. It has taken this harsh but true backlash to get me to see exactly where we stand and that I need to face up to the reality and make it better. I was not accepting that what we were doing was irresponsible (sp?). A good hard slap was painful but also enlightening. The fact that I honestly thougt, in all truthfulness, that we were living within our means shows that I really did not understand where we were going and how much the fall was going to hurt. Unfortunatly, I will be hurting others with what we do IF it comes to bankruptcy or reducing our debt owed by cc companies being forced to accept less than what we owe. And that is why I sat my family down tonight and told them that we are going to be doing a LOT of things differently starting now. We discussed selling all of the DVC contracts, shutting off cable and phone but keeping internet for my job searches. (As a side note I am looking for anything, not just accounting jobs. Good point though. I thought putting in 5-14 resumes/applications a week for five months was a lot. But after reading what others have done I obviously need to step it up even more.) We are going through our things this weekend and seeing what we can sell and what to throw away or give to charity. We really don't have much that isn't well worn/used to give or sell but we will see what we can do. We might even need to cancel our life insurance policies and pick them back up once we can afford them again. But since we have children that may not be the responsible thing to do. Once we take those steps and go back over the budget to see if there is anything else we can get rid of we will see where we stand plus what else we need to do. We will make the sacrifices that we will need to make and set this right. I know I keep saying thank you to everyone but I also really mean it.

Both types of posts have helped. The negative ones are truthful based on what I have posted in the past and has thrown a nice cup of ice water in my face and made me own up to what I need to do and REALLY realize what we have done with our spending. Those blessed hugs and supportive posts have given me (and hopefully others that may be in a similar situation) the tools to get help and change where we are. Those are the posts that have kept me from falling off of the edge into an abyss. I guess what I am saying is that I am thankful for both. I may not like them all but I am certainly going to be a big girl and listen to what everyone has to say. There are valid points to each one and they each have made an impression on my choices.

 

[dipin]

The OP has admitted she made some poor choices but say she intends to repay her debts.

I don't want to seem to be piling on, but I think the OP is still quite a ways from really understanding her situation. I know it is hard to face reality, and none of us are immune to rationalizing mistakes, but sooner or later it is time to face the facts. Especially with debt, which can spiral out of control so fast.

Take, for example, the upcoming trip which she intends to pay with gift cards and would otherwise just cost a tank of gas: those are precisely the small mistakes that end up accumulating to a mountain of debt. Now, a gallon of gas may seem like nothing, but if you are feeding you family with $50 a week, that right there is almost a week in food. Add to that the gift cards she will be spending there, which she could be spending for food at home, and it is quickly becoming a significant expenditure. And in any case, those points she will be using are points that she will not be renting, or it will affect the price she can get for them, so even then the stay is not free or paid for.

Again, this is not to pile up or to be harsh, but when someone is at the point the OP is in, it may feel good to rationalize some luxuries, but in a dire situation with no end in sight that is not the best attitude.

 

[wall*e2008]

I hope that wall*e2008 has no bones in his/her backyard.....WOW the shame of posting a "Haha look at what she did" post will surely come back and bite you in the a$$. Karma's a bytch and guess what, I can be too!

Be my guest and go find it.

You call it black and white, I call it harassment.... get over your selfish and conceited self and help with good sound advice, not finger pointing or shut it, really.....

Take your own advice.

Everyone is hurting right now and I certainly for one hope that no one here suffers any more than they are right now. Let's help each other though, not bash each other, really. Aren't we better than that? I love this board because I thought we were. At least most of us are.

This is a great time to learn how past decisions can put your house of cards is great danger when a person in the room sneezes.

Count your blessings everyone, in a moments time it could all be gone.

Counting ones blessing and learning from the past are both very important.

OP I sent you a PM...if you want to contact me personally please feel free to do so.