We Are SUNK - Any Advice?

[MrsPete]

My DH works in the housing industry. He has been employed by the same company for more than 20 years, but as you know the housing market has tanked. What used to be a nice steady income has now become hit and miss at best . . .

My kids are only involved in one activity because we frankly cannot afford anything more. The activity only costs us about $20 per month for the both of them to participate. We have taken so much from them already that I cannot tell them that this has to go also . . .

We haven't even filled our fuel oil tank yet because we don't know where the money will come from. We make too much to apply for assistace, and I don't much believe in able bodied workers going that route anyway . . .

Our home is worth $120,000 and our current mortgage is at $50,000. If we could refinance everything into one new mortgage ($100,000) we could pay EVERYTHING off and get back on track. Our one monthly payment would be much lower and we could have a chance to get back on our feet. Where do we go from here? If our bank won't do this for us, is there any hope that another bank will? . . .

Our bills just exceed what our income is at the current time. One payment would allow us to get back on our feet and start over and do things the right way. What do we do?

With his construction background, could your husband do some repair-stuff for people? Maybe make up some flyers. You never know who might have a door that needs some fixing or a deck that's falling apart. It seems that in my area the economy is a whole lot better, and many people have delayed making improvements /repairs around the house.

One activity per child may be more than you can afford right now. For much of our childhood, we had NO activities. Yeah, we hated it, but that's the way it was.

Look into assistance of some type. This isn't something anyone here can help you with; rather, it's specific to your area. You've paid lots of taxes over the years, and you need some help now. You're not trying to leech off the system forever.

You don't want to hear it, but you may need to look into moving to an area where more opportunity exists. I grew up in a rural area much like you're describing, and things would've been better if we'd lived elsewhere.

Do you have a credit union available instead of a bank?

Yeah, consolidating your payments would help -- but it'd also lengthen the debt. The real issue is that you have more out-go than income. Have you read The Tightwad Gazette? It's a bit outdated now, but it's full of solid information that could help you on numerous fronts.

I think it's wonderful you have contacted CCCS. They do alot of good and have helped several people I know.

I'm probably in the minority here but to me that extra income isn't worth my child's education. To have them drop a class to work or their grades start slipping due to working too much would be a horrible thing in my opinion. I'm not saying working in high school is a bad thing, I had a job through high school and I learned alot about money during those 2 years. But at the same time I missed out on alot of high school activities and my grades dropped from solid As to Bs and Cs from working 20-30 hours a week. I had no time to study.

So if the kiddos do get jobs just don't allow them to work much. I look back on that time and think what were my parents thinking.

On the other hand, my good friend in college worked as many hours as she could from as young as she could during high school, got straight As in hard classes, had time for a serious boyfriend, AND was on the swim team. She absolutely thrives when she's got a full schedule, and always has. Never know until you start!

And I'm not sure that anyone is suggesting to have the kids drop a class.

Over the years, I've taught the students who can maintain As and Bs in high-level classes, keep up with a social life, AND work part-time. However, in high school, they are the exception rather than the rule. The majority of the kids I teach can't "do it all" with that much success. I see many high school students who, once they turn 16 and get a job, drop out of the band, drop back from honors classes to general classes, and who don't do as well as they could academically. What I don't see is kids giving up their social lives for their jobs.

I did all this in college; however, I always took a lighter schedule than I could've if I'd not been working 30+ hours each week, and that meant that I took longer to finish school. And I'm talking about college. College students are a whole different ballgame. We're talking about teens -- two of them young teens.

Back to high school students: As I said earlier, I grew up in a rural area where part-time jobs for teens weren't really realistic economically. The only jobs available were 15-18 miles away, and that did really eat into one's time and profit. Plus, only the 17 year old can really expect to find a job, so the plan a couple others suggested about everyone going to the same mall is really not all that realistic.

I don't think having the kids work a few hours a week is a bad idea; rather, I think it's just not going to come together in your situation. A more practical solution might be to have the kids pick up more chores around the house (cooking, cleaning) while you and your husband work a second-shift job to bring home more cash. If you could go straight from Job 1 to Job 2 without coming home in between (yeah, I know -- bad -- but we're talking about something to tide you over 'til you pay off those bills; then you'll be better off), you could save on transportation costs.

 

[cndij]

Ahh, now here's a wood cook stove like I've been dreaming of, if yours is like this it would for sure pay a car repair.
http://winstonsalem.craigslist.org/atq/2657425684.html

Also on the antique trunk, even if it's in bad shape, your hubby could probably fix it up. I have a friend of a friend, who reconditions antique trunks for a living (new lining etc.) and sells them at Craft Fairs, for anywhere from $300-700 each.

 

[nancytoby]

You can price-check on eBay -- do a search to see what similar items have sold for in the last several weeks. Might take a few iterations but you can generally get a pretty good idea what people are willing to pay for similar items. Of course that usually includes shipping over a much greater distance than most craigslist items are sold (mainly locally).

 

[patsal]

Learner's permits do not add to insurance cost. I was not able to get a lisence until after I graduated High School, while in High School I worked full time (I was lucky, or unlucky enough to have an employer who did not follow child labor laws). I am no worse for the wear. Graduated on time and though I wasn't on the high honor roll I still got a full scholarship to college--after the first 3 semesters I didn't like it so I transferred and did have to take out loans, but my point is that was my choice I could have stayed where I hated it and kept the free ride. Food clothing and shelter should be your priorities until you get yourself out of debt. Cell phones are luxuries so is driving for a teen.

 

[DisMN]

CCCS is notoriously conservative because they are a non-profit that knows what can and will work in favor of their clients. OTOH, Careone credit is a for-profit agency which is going to put their own interests ahead of their customer's. Do a google search on them before you sign up, OP. There are a lot of complaints about them and some shady practices.

CCCS will only recommend bankruptcy if there is no possible alternative in their estimation. It really does not sound as if the OP is in that dire a situation. She just needs a little bit of breathing room. If she can get her credit cards to lower their interest rates and by doing some more belt tightening, I think she is going to make it.

Your information is innacurate and is meant to scare people into only using CCCS.
Careone does indeed have tons of complaints from people deeply in debt who want to get OUT OF PAYING their debts by settling with their creditors. Those are people who want to only pay a portion of what they owe and often their creditors will sue them. Careone offers debt settlement but they also offer debt MANAGEMENT.
You will find that the debt management programs have very few complaints except from people who aren't willing to do their part in the program.

There is a very small service fee each month anywhere from $15-$50. I'm not certain but I don't believe that's considered a for profit agency fee. Due to paying lower interest rates, we will have paid some interest to the creditors but NOT the $132,000 in interest they would have collected if the interest rates hadn't been cut. You read that right. $132,000 is what we're no longer paying in interest.


From what I understood the OP has contacted her creditors and they will only work with her IF she becomes late on paying them. That doesn't help the situation at all but will in fact make her situation much worse. Creditors usually work quickly with a debt management company to help the customer by drastically lowering the interest rates and creating a payment plan that the customer CAN afford. Of course their credit cards will be closed but that's not really bad news.

Our creditors refused to work with us unless/untill we missed 3 months worth of payments and as soon as our debt management company contacted them they quickly responded by lowering our interest and cutting our payment amounts. We are fully paying back our debts, which the OP indicated they would like to be able to do as well.

An example of how it might work for the OP is like this:
$7000 debt at 25% interest before debt management program. Monthly payments basically only covered the interest so the debt never goes away.

After debt management the interest rate is brought down to a much more reasonable 7% and often (not always) payments are smaller and you can now watch the debt slowly go down. Finally!

The management company does most if not all the contacting of the creditors and the creditors willingly work with them.

My husband and I listened to people *warning* us about for profit agencies so we just didn't look further into it. 5 years went by where we could have been well on our way to having this debt dead and buried but instead we were certain that the ONLY way for us was going to be bankruptcy because that's what the CCCS told us. They were wrong.

 

[C.Ann]

Your information is innacurate and is meant to scare people into only using CCCS.
Careone does indeed have tons of complaints from people deeply in debt who want to get OUT OF PAYING their debts by settling with their creditors. Those are people who want to only pay a portion of what they owe and often their creditors will sue them. Careone offers debt settlement but they also offer debt MANAGEMENT.
You will find that the debt management programs have very few complaints except from people who aren't willing to do their part in the program.

There is a very small service fee each month anywhere from $15-$50. I'm not certain but I don't believe that's considered a for profit agency fee. Due to paying lower interest rates, we will have paid some interest to the creditors but NOT the $132,000 in interest they would have collected if the interest rates hadn't been cut. You read that right. $132,000 is what we're no longer paying in interest.

Our creditors refused to work with us unless/untill we missed 3 months worth of payments and as soon as our debt management company contacted them they quickly responded by lowering our interest and cutting our payment amounts. We are fully paying back our debts, which the OP indicated they would like to be able to do as well.

An example of how it might work for the OP is like this:
$7000 debt at 25% interest before debt management program. Monthly payments basically only covered the interest so the debt never goes away.

After debt management the interest rate is brought down to a much more reasonable 7% and often (not always) payments are smaller and you can now watch the debt slowly go down. Finally!

The management company does most if not all the contacting of the creditors and the creditors willingly work with them.

My husband and I listened to people *warning* us about for profit agencies so we just didn't look further into it. 5 years went by where we could have been well on our way to having this debt dead and buried but instead we were certain that the ONLY way for us was going to be bankruptcy because that's what the CCCS told us. They were wrong.

My sister (now 70 yrs. old and widowed suddenly in 2004) found herself in a very bad situation a few years ago that was truly not of her own making.. She used one of these places (I think CCCS - but not postive) as a way of paying all of her debts in full (just lower interest rates) and come Jan. 1st she will finally be debt-free..

The place she worked with did charge a very small fee each month but without them she would have lost everything.. As each debt was paid off she received confirmation (in writing) from the original debtor that the amount was paid in full, so the firm she used was definitely legit.. Sometimes people have to do what they have to do - based on circumstances that were out of their control - and if there's a way to get those debts paid without going the BK route, it's really better in the long run.. People just have to be careful about which firms they go with..

 

[mrsklamc]

DH and I also collect all the aluminum cans from the breakrooms at our respective employers....

Someone mentioned sewing...a friend of mine whose husband is out of work posted on facebook that she's making and selling pumpkin rolls for the holidays...you might need a license or a commercial kitchen for that...

Childcare? Can your husband make furniture? Are you or your teens crafty & can open an etsy store?

 

[Marionnette]

Your information is innacurate and is meant to scare people into only using CCCS.
Careone does indeed have tons of complaints from people deeply in debt who want to get OUT OF PAYING their debts by settling with their creditors. Those are people who want to only pay a portion of what they owe and often their creditors will sue them. Careone offers debt settlement but they also offer debt MANAGEMENT.
You will find that the debt management programs have very few complaints except from people who aren't willing to do their part in the program.

There is a very small service fee each month anywhere from $15-$50. I'm not certain but I don't believe that's considered a for profit agency fee. Due to paying lower interest rates, we will have paid some interest to the creditors but NOT the $132,000 in interest they would have collected if the interest rates hadn't been cut. You read that right. $132,000 is what we're no longer paying in interest.


From what I understood the OP has contacted her creditors and they will only work with her IF she becomes late on paying them. That doesn't help the situation at all but will in fact make her situation much worse. Creditors usually work quickly with a debt management company to help the customer by drastically lowering the interest rates and creating a payment plan that the customer CAN afford. Of course their credit cards will be closed but that's not really bad news.

Our creditors refused to work with us unless/untill we missed 3 months worth of payments and as soon as our debt management company contacted them they quickly responded by lowering our interest and cutting our payment amounts. We are fully paying back our debts, which the OP indicated they would like to be able to do as well.

An example of how it might work for the OP is like this:
$7000 debt at 25% interest before debt management program. Monthly payments basically only covered the interest so the debt never goes away.

After debt management the interest rate is brought down to a much more reasonable 7% and often (not always) payments are smaller and you can now watch the debt slowly go down. Finally!

The management company does most if not all the contacting of the creditors and the creditors willingly work with them.

My husband and I listened to people *warning* us about for profit agencies so we just didn't look further into it. 5 years went by where we could have been well on our way to having this debt dead and buried but instead we were certain that the ONLY way for us was going to be bankruptcy because that's what the CCCS told us. They were wrong.

I'm glad that you are able to get back on your feet. My warning to the OP is about both the debt reduction and the debt management programs. She can do a google search and decide for herself if Careone is a reasonable alternative to CCCS. Given that she already has an appointment with CCCS, the least she can do is to find out what they have to say instead of dismissing them outright.

 

[veraletta]

You said you are union, call your union president they sometime have money saved aside to help people like you. Try them first. My husband was union president for over 20 years and they always helped when the union could.

 

[Vacation Lover]

I do work in the town that is 11 miles away. My DH works about 25 miles from home because that's where the job is. Like I said, he carpools with someone, so he pays him $40 per month for gas.

Some good replies here but I don't think this has been addressed. Can your DH work out a trade instead of the $40 cash for carpooling? For example, he could do some odd jobs for the friend, your kids could babysit or clean their house once a month, etc.

 

[shopnfun2me2]

Have you thought about selling AVON or something similar?

 

[mickeyluv'r]

You mention that DH has already been offering to do off jobs - but an Idea I had after this was that ou mentioned he works on cars...

What if DH and one or more of the kids started a business of changing oil in folks' cars. (and perhaps other small auto jobs.) In addition to changing the oil - they could do minor detailing (cleaning the car) as kind of a free add-on.

Often local newspapers and grocery stores, church flyers, etc. will let you place an ad for free, or a very nominal fee.

If the price is low enough, and the work of exceptional enough value (car detailing normally costs upwards of $100) - then it won't take long for word of mouth to spread.

The trick is to work harder than anyone else in the same price range.

 

[MoonpieMomma]

A job is not worth it if it costs almost as much to commute there as you take home in pay.

Mature teenagers don't make a big fuss about getting a car and driving.

Before letting your kid drive, you should have a million dollars of insurance, typically including an umbrella policy.

When I was growing up (in a decent suburban town), it was said that the typical high schooler got into an accident within a year of getting his license.

I did not have a car until I graduated from college.

If you are running into health and dental problems, consider having the older kids drop (or audit) some high school courses (public school only) if that will allow them to earn more money. The missed courses can be made up in a later year.

Will not consider compromising my children's education so they can work. Their education is priority one and its just not an option as far as I'm concerned. Part-time job....yes. Dropping classes at school....no.

 

[MoonpieMomma]

CCCS is notoriously conservative because they are a non-profit that knows what can and will work in favor of their clients. OTOH, Careone credit is a for-profit agency which is going to put their own interests ahead of their customer's. Do a google search on them before you sign up, OP. There are a lot of complaints about them and some shady practices.

CCCS will only recommend bankruptcy if there is no possible alternative in their estimation. It really does not sound as if the OP is in that dire a situation. She just needs a little bit of breathing room. If she can get her credit cards to lower their interest rates and by doing some more belt tightening, I think she is going to make it.

 

[MoonpieMomma]

Ahh, now here's a wood cook stove like I've been dreaming of, if yours is like this it would for sure pay a car repair.
http://winstonsalem.craigslist.org/atq/2657425684.html

Also on the antique trunk, even if it's in bad shape, your hubby could probably fix it up. I have a friend of a friend, who reconditions antique trunks for a living (new lining etc.) and sells them at Craft Fairs, for anywhere from $300-700 each.

Mine is actually much nicer than this one. It took 4 men to move it into the house and was still being used to heat/cook by the person we received it from. I love it, but I also need to be realistic. Probably time to get rid of it. By looking online I think its probably worth about $1000-1200. Sure would help a lot if we could find a buyer. My sister is going to help me post on craigslist. She has a tiny bit of experience.

 

[C.Ann]

Mine is actually much nicer than this one. It took 4 men to move it into the house and was still being used to heat/cook by the person we received it from. I love it, but I also need to be realistic. Probably time to get rid of it. By looking online I think its probably worth about $1000-1200. Sure would help a lot if we could find a buyer. My sister is going to help me post on craigslist. She has a tiny bit of experience.

Price higher and allow those interested to offer less - so that you end up with exactly what you feel it's worth (or you want).. Take lots of photos - show all angles and features.. Good luck!

 

[MoonpieMomma]

Well, it was a LONG weekend. CCCS appointment has been made and we put together all our financial information...... I should have taken a more active role in the finances in the house. Too little, too late I'm afraid. All we can do is go to them for help and see what they can do. If that doesn't work out then we will move on to another solution.

Oldest son has applied for a job at McDs, which is ten miles from the house. Manager said weekend are when he need the help most and when he can offer him a full shift. Supposed to be getting back to us.

DH is applying for work with the local gas industry. Means five days away from home each week, but we have to do what will keep us afloat. Long hours and hard work, but the pay is fantastic. Keep your fingers crossed!

DH is also at the bank today seeing if they will allow us to skip our December mortgage payment. It will allow us to pay for the fuel oil we had delivered and will leave a little bit left to buy something for the kids for Christmas.

I'm looking into selling on Craigslist. My sister is helping me figure it all out. Hopefully will have some stuff ready to post by mid to end of week.

We have looked at the monthly budget and have whittled it down to bare bones (with the exception of the cell phones). The organization that the kids belong to has offered other families assistance with the costs when the going got tough. Will be talking with them and seeing if they can help out so the kids can stay active.

Clipped coupons yesterday and checked with the neighbors who will be saving their coupons for us. Also making up a menu at the beginning of the week and sticking with items only on the list when doing my shopping. Does anyone here check the sales ads to see what is on sale and then make up their meals accordingly? That's the plan, at least for now. Will see how the monthly total goes and adjust from there.

We are taking the van to a friend to be fixed. He works at a garage and they are allowing him to take home the tools needed to repair our vehicle. He has told us not to worry about it until we get back on our feet, but we will try to barter some type of trade.

Well....this is it. It's the plan we have come up with for now. Two weeks until our appointment with CCCS, so we will wait and see what else to do from there.

 

[tlenzendorf]

I'm glad you have a plan now. That has to be some sort of relief.

Often when I didn't have a lot of money I would make the grocery list right from the ad. We wouldn't eat anything if it wasn't on sale. I could do a week for a family of 3+1 infant for around $60. I know it would be higher now since that was about 5 years ago, but still. You can make it work that way

I also would suggest to just give Care One a call and see what they could offer. I went thru them and it was super fast and easy. It really saved me a lot of money and get thru a difficult time. It doesn't hurt to have options.

 

[KennesawNemo]

Well, it was a LONG weekend. CCCS appointment has been made and we put together all our financial information...... I should have taken a more active role in the finances in the house. Too little, too late I'm afraid. All we can do is go to them for help and see what they can do. If that doesn't work out then we will move on to another solution.

Oldest son has applied for a job at McDs, which is ten miles from the house. Manager said weekend are when he need the help most and when he can offer him a full shift. Supposed to be getting back to us.

DH is applying for work with the local gas industry. Means five days away from home each week, but we have to do what will keep us afloat. Long hours and hard work, but the pay is fantastic. Keep your fingers crossed!

DH is also at the bank today seeing if they will allow us to skip our December mortgage payment. It will allow us to pay for the fuel oil we had delivered and will leave a little bit left to buy something for the kids for Christmas.

I'm looking into selling on Craigslist. My sister is helping me figure it all out. Hopefully will have some stuff ready to post by mid to end of week.

We have looked at the monthly budget and have whittled it down to bare bones (with the exception of the cell phones). The organization that the kids belong to has offered other families assistance with the costs when the going got tough. Will be talking with them and seeing if they can help out so the kids can stay active.

Clipped coupons yesterday and checked with the neighbors who will be saving their coupons for us. Also making up a menu at the beginning of the week and sticking with items only on the list when doing my shopping. Does anyone here check the sales ads to see what is on sale and then make up their meals accordingly? That's the plan, at least for now. Will see how the monthly total goes and adjust from there.

We are taking the van to a friend to be fixed. He works at a garage and they are allowing him to take home the tools needed to repair our vehicle. He has told us not to worry about it until we get back on our feet, but we will try to barter some type of trade.

Well....this is it. It's the plan we have come up with for now. Two weeks until our appointment with CCCS, so we will wait and see what else to do from there.

You are doing a great job and teaching your kids a valuable lesson. I hope things will get better soon for you guys!

 

[nancytoby]

Thanks for the update and good luck to you! Please let us know how it goes!