I have no idea where to start... Help?

[agape71]

I'll apologize, in advance, for what may turn out to be a long post.

My family consists of my 4-year old son, my husband, and myself. I am currently the only source of income. Unfortunately, it is not an option for my husband to take a job (several reasons... he usually does not make enough money to cover daycare; his employment skills are in the construction industry, which has a very high unemployment rate in Georgia, right now; and he has three pending felonies on his criminal record, so no one will touch him - long story). My net income per month is $3000.00 (rounding down slightly).

Rent - 625.00
Electricity - 100.00
Cellphones - 190.00
Gas - Natural - 70.00
Aaron's Rental 1 - 117.00
Aaron's Rental 2 - 106.00
Car note ($180/bi-weekly) - 390.00
Auto insurance - 63.00
Water - 65.00
Fuel ($35/week) - 155.00
Groceries + Household Items ($125/week) - 545.00
Cable/Phone/Internet - 170.00

TOTAL $2,606.00

On my income, I am able to cover our bills, and it looks like I have enough for savings, but I can never keep it. I will have to analyze our spending, but I can pretty much guarantee that the money is going to stupid things, like take-out and cigarettes. An emergency would kill us financially.

My credit is total crap. I made a lot of mistakes when I was younger (I'm 31 now) and ended up having to file Chapter 7 bankruptcy (in 2004). We got our act together for a while, and rebuilt our credit and were able to buy a house (2006). Things went well for a while, both of us worked, then went to crap (house fire; insurance company didn't pay... another long story)

By the time all the dust of my long story cleared, my credit cards were beyond help, the house was foreclosed on, I was forced to relinquish one of our vehicles to the repo-man, and my credit was (and still is) shot.

Fast forward a couple of years and here we are. I have been trying to pay off some collections, but have not made much headway (I did manage to pay off two that were judgements, but it took me a year). Here are the collections that I have currently:

Creditor (Orig. Creditor and/or Notes) - Amount - Drop-off Date
Allgate Financial (Freidman's Jewelers) - 654.00 - 10/2013
Arrow Financial 1 (Plains Commerce Bank CC) - 300.00 - 07/2013
Arrow Financial 2 (Premier Bank Card CC) - 533.00 - 09/2013
Asset Acceptance (Capital One CC) - 942.00 - 08/2013
Barclay's Bank (CC) - 1042.00 - 12/2014
Medical Collection 1 (Not owed) - 57.00 - 09/2013
GMAC (Repo) - 15,179.00 - 03/2015
Home Loan Services(2nd mtg purch$) - 26,232.00 - 07/2014
LHR (Juniper Bank CC) - 1043.00 - 11/2014
Medical Collection 2 - 506.00 - 07/2012
Medical Collection 3 - 99.00 - 02/2014
Merrick Bank (may be duplicate) - 1285.00 - 01/2015
Medical Collection 4 (Not owed) - 62.00 - 11/2013
Verizon Wireless - 1192.00 - 08/2015
Property Tax Lien (placed after house was foreclosed on) - 1115.00

The drop-off date is the date that these items are supposed to drop off my credit report (should also be when the statute of limitations is up, as well). I am aware of how terrible it sounds for me to be looking at the statute of limitations, but when I have a family to take care of, I have to look at all my options (including, unfortunately, the immoral ones, such as allowing the SOL to run its course so the debts are not collectible, or considering bankruptcy again in a couple of years, when I am able).

A couple of the medical collections are legitimately not owed (as per the original creditors that have been trying to help me get these taken care of), but if I had to pay them to just make them go away, I would.

Most of these creditors are not contacting me (I am not hiding from them, they just aren't calling or sending letters), specifically the creditors for the 2nd mortgage and for GMAC. The flip side of that is that I am also not contacting them (I am hesitant to because I do not want to reset the SOLs, which will happen, if I take any action on the debts). There are a couple of options that I see...

1. I can sit tight, work on my current finances, and let the SOLs toll on these, so that, even if they do try to collect, they can't

2. I can wait a couple of years, file bankruptcy again (it should be an option - I've already spoken to an attorney)

3. I can pay off the smaller collections, and let the SOL toll on the bigger ones (which will wipe them from my credit report), which will allow me to possibly begin rebuilding sooner than a bankruptcy would

4. Do a combinations of the above

I know my first priority needs to be my current finances. Our lease is up and we will HAVE to move (its a safety issue) and our rent will more than likely go up (based on what I have seen available in the areas we need to get to). So I know that we need to adjust our spending habits NOW and pay down as much of our current debt as we can (Aaron's Rental, specifically). We have called the cable company and our cellphone company and lowered those as much as we can (I know... they are high still... but I am in school, which requires fast access internet, we are locked in to a contract with the cable company for the package we have, and we are locked into a cellphone contract + I use my cellphone for work, which keeps my boss happy).

So... that's my story, in a nutshell.

I am looking for a little guidance regarding my current finances and trying to figure out what to do about the collections (some are written off completely, so I'm guessing that they won't be contacting me, but who knows).

Again, I apologize for the wall of text.

Thank you for any input that you can give."

[maat55]

Before I analize further, your husband can work opposite hours that you do, doing just about anything available would help.

[maat55]

Your situation has an philosophical element that needs to be addressed. You limit your abilities before you engage in repair.

Your husband can work, you can do without cable and cells,your furniture rentals need to go.

If I were in your shoes I would be doing this:

Husband getting night job(whatever is opposite you).
Rental furniture goes back.
Cells and cable get shut off.
I would organize your collections by who is making contact and take all extra funds(any funds not supporting life, sell of stuff, funds currently going to cells, cable and rentals))and work percentage deals. This is where you add up the totals, find what percentage they are of the total and offer payments of the same percentage out of the available funds. Those who do not comply will be shut out, to be dealt with later.
I would cut up any and all credit cards.
I would sell everything possible.

I highly recommend that you read: "The Total Money Makeover" by Dave Ramsey. You need a new mental approach to your finances.

Do not concern yourself with what anyone thinks, family, friends or other. You also need an survival mode mental approach to your current budget.

Once you see results(and they will come quickly if you do this), you will break yourself of bad habits.

[maat55]

To add, you should not give any creditors access to your checking account.

Later, you can build up funds and attempt to make settlement arrangements with those creditors asleep.

BTW, I would give top priority to the tax lien.

[ktmarvels]

I would do similar things to what maat55 suggested. #1 those Aaron rental's need to go. You didn't say what it they are, but Aaron's is in business because they ultimately charge you more than you would pay otherwise. We can help you brainstorm on less expensive ways to replace those items, or maybe you don't need them at all.

As far as cable/internet/phone go, I would get rid of all 3. Cable's a luxury, phone isn't necessary if you have cell phones, and with a cell bill that high I bet you have a data plan making the internet unnecessary too. The library is a free way to get internet if it's needed. Most of them also have movies and TV series and books to provide free or cheap entertainment.

I would take a hard look at where the unaccounted $400 is going every month. Since the habit of spending everything you have has developed, prevent yourself from being able to do that. Take $200 and have it automatically go into an emergency fund or towards paying one of your debts. That way you know you are making headway and still leaves a little cushion.

I know it can seem overwhelming, but you and your family will be able to get out of this. It will take a lot of hard work, but you can do it!

[snafu]

There is no magic bullet that will change your circumstances. The terms and conditions in 2006 that allowed you to buy a home you couldn't afford have tightened so much middle class, double income earners have trouble qualifying.

What are you willing to do or to change to cope with so many financial issues besides SOL? It's getting really tough! Moving comes with more stressors and upfront costs for damage deposit, 1st & last month's rent, utility hook-ups & deposits, moving vehicle etc.

2nd. 3 felonies hanging over DH suggests legal costs and child care expenses.

3rd. Cigarettes and take-out are double whammies, money spent which has a negative impact on your health. I hope you have a slo cooker/crockpot to make inexpensive, healthy meals from 'real' food, root veggies, lots of fresh veggies, adequate protein [meat 4 oz. per adult].

DH must bring in some income from whatever hourly work he can find to mesh with your time at home. Could he do home 'handyman' work by advertising for free on Craigslist, Kijji etc?

How many of Maat's suggestions would you be willing to do?

[buildmybudget]

Cut the fat (get rid of the unnecessary expenses such as cell phones, rental) and start a debt snowball. (Dave Ramsey's debt payoff strategy) You aren't in an impossible situation but as others mentioned, you need to make some tough decisions and put together a plan that has a light at the end of the tunnel. Try to gain some small victories and it will help you get going!

[whitestripe]

if your boss is happy for you to use your mobile for work, perhaps he would consider paying for it then? my DF's boss pays for his phone, and DF pays for the personal calls he makes.

[humandraydel]

Uhhh...this is the EXACT same post as this:

I have no idea where to start... Help?

So, you are just creating new user names in an attempt to get additional feedback? Why not just bump your original post?

[catatonico]

I am the original poster of this thread from a couple months ago or so. I didn't repost this, but if agape wants to get advice on how they can pay my bills, I'm all for it

Agape... it really doesn't help your situation to "borrow" anyone else's problems. If you want real advice from these fine folks, tell your own story instead of being lazy and reposting mine.

Thanks!

[catatonico]

Oh... and yeah... I know I'm responding to a really old post. I've been living w/o internet and cable for a while (just until I go back to school in August, though) and have been crazy busy at work.