Category : Personal debt

Getting started!

I know how to Average my bills and divide them by the amount of pay periods in a year to come up with a weekly amount to put away strictly for home finance but I just cant figure out how to get it started. how to get out of this tornado where a bill comes in the mail and THEN I raise the money to pay it, or where most my utilities are a month behind, etc. I know how to make a budget on paper but how do I get it rolling when I’m behind to begin with. How do I get an entire months worth of bill money saved up so that putting a weekly amount away for bills will give me the next months bill money at the BEGINNING of the month, So that when a bill comes in the mail I can just simply walk over to my desk…. Write the check…. seal the envelope…. and put it out in my mailbox for pick up???????????

I am new to the CZ blog, and have already found reading the posts helpful.

Five years ago I moved from an area where I was earning a good income, to an area that has a much lower pay scale, so could be near my parents, siblings, and other family.

I worked my way to a better income again, and two years ago bought a house on my own.

I was doing ok till that point, but suddenly every bank came out of the woodwork to offer me a credit line. I decided to make a lot of repairs (some, not all, necessary right away) and improvements to the house. Bottom line, I took on too much debt, including charging up new credit cards.

Then the inevitable happened (I think inevitable, anyway) – the house then needed repairs I hadn’t anticipated (flooded basement, leaking siding in winter), and so did my car. Insurance took care of some, but I did pay out of pocket as well.

In Spring of this year, I started falling behind. I considered going to Consumer Credit Counseling Services, but just didn’t want them to close all my accounts. Also, I’m not looking to necessarily settle my debts – I just want to keep up and pay things off.

So I got on the phone and started talking to creditors. I’ve been doing that since this past summer.

My biggest problem right now is high interest and late fees. I’ve been bleeding money in late fees, overlimit fees, and high interest.

I’ve set up my spreadsheet with all my debts, and all the info I need to track them and pay them down. I encourage myself by putting a strikeout line through something when I pay it off, so I can see it and get that feeling of accomplishment, and also by seeing the “amount owed” column go down.

I try my best to meet due dates, but can’t always. It’s a vicious circle – I incur late fees and overlimit fees, have to pay a larger chunk, and then something else gets behind.

I’ve culled every resource I have available – small loan from parents, 401k, refunds, etc. I have very little left at the end of the month for extras (Christmas is particularly difficult this year). I would be happy to work overtime at my job, or get a second job, but haven’t been able to find either opportunity so far.

I guess mostly I need to be informed about what options are available for paying down debt and working with creditors.

For example: I have a $2000 credit card (now closed) that I’ve been paying on for a long time, but can’t get down, because the interest rate is high. This company I do want to call and work out some sort of settlement with, because I think I’ve now paid that original $2000 twice.

Sometimes I feel completely overwhelmed. Then I go back to my spreadsheet and remind myself of what I’ve accomplished so far.

I’ve found that, when you really are in a spot where it’s hard to pay on time, companies will work with you. Even small businesses, like your plummer, will work with you. They would rather have at least small payments coming, and know you will make good on the debt, even if it’s slow and late.

One thing I never knew is that you can write creditors to stop harassing phone calls. It’s things like that I need to learn – strategies having to do with working with creditors, negotiating interest rates … things that will help mitigate my circumstances so I can get my debt down faster.

I guess I just need a place where I can talk about all this, and learn from others’ information and experiences.

Thanks for listening!

Re: Should I file bankruptcy?

Your monthly payments below almost equal your net income; you have to make some drastic decisions on your expenses and increase your income if you don’t want to file bankruptcy. No choice there. $500 a month just isn’t enough money to cover groceries, gas, repairs, clothes and other unexpected expenses especially if you have a family.

I am not saying you can’t do it, you can; but it will take time and hard work, being dedicated to trimming excess, willing to work another job, etc.

Now, as far as bankruptcy is concerned, Chapter 7 is liquidation and there is no Chapter 14. Chapter 13 is reorganization. You don’t make the “choice” of filing which Chapter anymore; that was changed last fall and the median income of your State is in large part the determiner for which chapter you can file. If your income is below the median income for your state, you can choose to file 7 or 13; however, if it is above, then you will likely be forced into 13. Also, you have to take a finance/credit counseling class within 6 months prior to filing. Keep in mind, student loans are not dischargeable in bankruptcy, no matter which chapter you file.

You can learn more about median income for your state here:
https://www.justice.gov/ust/means-testing

Expense standards for 48 contiguous states:
https://www.justice.gov/ust/eo/bapcpa/20111101/bci_data/national_expense_standards.htm

The first thing you have to deal with, believe it or not, is the depression … depression can make you physically ill and prevent you from working so this is the big thing for you right now. The most important thing in your life is your health and your family … are you married, can you discuss this with a spouse or significant other?

Being honest and upfront with your spouse, and they with you, is extremely important to resolving these issues and supporting each other will go a long way in resolving the depression.

Also this is what dave Ramsey says:

Remember, they (Creditors) can’t hurt you … they cannot physically hurt you … only you can do that to yourself if you let it happen … absolutely refuse to be depressed … there are solutions, from tightening your belt … ok breathing may be a tad hard for a while 😉 but you will breathe … to filing bankruptcy … to just not paying anything but the necessities (meaning no cc’s, no unsecured loans … just keeping a house over your head and related expenses).

Hope this helps some and do post back if you need more questions answered.

My Story: Business and Personal Debt

I’m new here, and would like to discuss my story…any advice is well appreciated! Sorry, kinda long.

Our debt story began when my husband got laid off from a good paying Union job in 2003. He never got called back for a FT job. We were in the process of starting our own Heating & A/C business at the time he got laid off…and we started things up and he went FT with our business. I work PT as a nurse, but make FT pay.

Of course, we accumulated a lot of debt to buy stuff for the business, and to provide our living expenses when he didn’t get paychecks…Owners are last to get paid. That landed us to where we are today….

  • around $50,000 in credit card debt for our personal finances.
  • around $45,000 in business debt, of which we are personally liable for…mostly $ due to our suppliers.

To compound the situation, my husband was diagnosed with Adult ADD (Attention Deficit Disorder)last year. He is a super smart, mechanically inclined man…but lacks motivation to get started and to finish jobs, is disorganized, irresponsible with money and spending habits. Unfortunately, this affects our business. We are trying to find the right medication for him, it’s been rough!

I feel we can negotiate our way our of credit card debt, IF he gets another job making descent money…and avoid bankruptcy.

The business CAN be profitable if managed correctly. I feel I have the skills to be able to take it places, but was held back b/c of my husband who wanted control. I know it can be profitable.

BUT, we are personally liable for the business debt, even though it’s a corporation. SO, we can’t simply fold the business, and file bankruptcy with the business, b/c they will come after us…and the only way to avoid that is to file bankruptcy ourself, after closing the corporation, and include the business debt in with our personal debt in the bankruptcy.

I would like to avoid bankruptcy. It is a possibility to keep the business open on a part-time basis, but nearly all the profit will have to go to debt, and maybe later after my husband is settled, he can start it up FT again…the right way. Or, keep it as a part-time thing, and once all is paid off, it will be all extra money after paying for parts and supplies.

That’s my dilemma! Big one, huh? Any advice, or stories, encouragement is welcomed!

Thanks for ‘listening’