Need sound advice

[Granite]

the main thing here is that you have to make a mental shift. It's not about keeping up with the neighbors or your co workers. You have to be concious about your spending. If you are used to getting a coffee in the morning before work, that will have to stop. You will have to learn how to auto program your coffee maker to turn on in the morning, or set it up the night before and plug it in when you get up. Make enough to take a thermos full to work with you, if you are coffee drinker. Forget lattes and mochas, learn to drink the regular stuff. If you are used to a morning muffin, buy a mix or learn to bake from scratch. On Sunday, do your baking. it's a mental shift that will need to take place. it is not an easy process.

for lunch, you won't be lunching with your co workers, you will be brown bagging it. Forget the tv dinners, just buy some rubbermaid containers and start packing leftovers from last night's dinner. learn to enjoy PB & J sandwiches. Life is going to change. There will be some deprivation and some rebelliousness possibly. But you will save money and can pay off a credit card this way. One at a time. It will feel really good.

You can pre fill the crockpot the night before, put it in the fridge and set it up in the morning so dinner is ready when you get home. You are going to start cooking at home now, and there will be no more eating out. If you make some simple shifts you will be amazed at how much you can save.

Gifts will need to be downsized. Travel is no longer an option. You will need to focus on paying off these bills which you have incurred.

This is life, you made your bed and now you are laying in it. Face up to it and start making some changes. I have had to do this and I know it aint easy but that's the way it goes !

[funwithdebt]

You all are absolutely correct. These are decisions we got ourselves into and its up to us to get out.

We can turn this from a discussion from Chap 13 or not, into a discussion about Snowballin vs a DMP.

My wife and I have looked at our budget, and have reduced it quite a bit. (I just canceled cable, yeah!) I talked a DMP today (BOA recomended) and they stated that my payments to them would be $4900, which is what I had in the Snowball. So I'm recomending to my wife that we live by this, as in a DMP we'd have to live with it anyway.

I handed over my Debit card last night, as that is something that makes it too easy to spend money. We are going on a cash basis only. When the cash is done, we don't go out.

The main problem for us is going out to eat, that is what kills us. I stopped going out for coffee a long time ago, and I work at home anyway so I eat at home as is.

DisneySteve, I'm not sure we will make 10k on sales, maybe more like 5k, but then again, I'm not going to sell furniture and such. We have already been taking clothes to consignment, DVDs to Movie Warhouse and Books to half price.

I will be ebaying and craigslisting soon. Even on our current plan on paying 4900 in cards a month, we have about 200 in extra. I am planing on saving that to cover rainy days. $4900 is about 800 more than we are paying now, and should have the nordstroms card paid off by June, Disney Chase by October. Of course that doesn't include any lump sum payments we can make or raises (although in this economy I wouldn't bet on it)

[Granite]

that is great ! I don't think anyone is going to advise you to go Chapter 13. I have dealt with many business owners who have gone this route and regretted it.

in the end it's up to you. You are at home all day, so you need to learn how to cook. Get a crock pot, google some recipes and give up the take out. It's not that difficult.

I would do this myself (debt payoff plan) rather than going to an outside source. You should be able to trust yourself better than anyone else !

Personally I am over 300 K in debt myself so I know how it feels to be in over your head. Our income is only 80K per year total. I would never ask anyone else or the government to solve the situation that my spouse & I got into. It's my problem so I need to find the solution and fix it.

Have some confidence in yourself !

[creditcardfree]

This is important and we've all neglected to mention this. If you haven't already done so, call every one of your credit card companies and request that they lower your interest rate. Point out that you've been a good customer and made payments on time (assuming that is true) but that the high rate is a problem. The worst they can do is say no. The best they can do is drop your rate which can save you hundreds of dollars.

I was just thinking this. It is important to keep looking for ways to reduce the interest rates on these cards. Noppenbd's blog today said PenFed had a great balance transfer option of 2.99% for the life of transfer. Here's the link. The maximum fee is $100. Regular purchases are 13.99%. Of course, you don't know if you will be approved or how much, but this is a great rate that could be applied to some of your higher rate debt. The less interest, the faster you can get this paid off.

Good luck!!

[disneysteve]

My wife and I have looked at our budget, and have reduced it quite a bit. (I just canceled cable, yeah!)

The main problem for us is going out to eat, that is what kills us.

DisneySteve, I'm not sure we will make 10k on sales, maybe more like 5k, but then again, I'm not going to sell furniture and such. We have already been taking clothes to consignment, DVDs to Movie Warhouse and Books to half price.

I will be ebaying and craigslisting soon.

Congrats on trimming the budget and canceling cable. You can watch so many shows for free online today that cable is becoming less and less worth paying for anyway. Go to each network's website and check hulu.com and fancast.com.

Going out to eat kills us, too. I haven't figured out how to deal with that. When we aren't all running on a crazy schedule, trying to get to various activities, we're very good about cooking at home. When the activities build up, though, we tend to eat out a lot more. We also happen to really enjoy eating out. At the very least, do your best to limit the costs when you do go out. Drink only water - no soda, no alcohol. Split one appetizer. Skip dessert (do that at home). Either share an entree or take home the leftovers to eat for lunch the next day.

As for what you can make on selling stuff, I just picked the 10K figure kind of randomly. I figured you had 200K in debt and 20K of that was from taxes. That left 180K. Some of that was spent on experiences (dining, travel) and maybe 100K was spent on stuff. I figured maybe you could recover 10% of that. If you can get 5K, that would be great. Just make sure all that money goes toward the debt.

Keep us posted on your progress. Start a blog if you'd like. You'll find that the folks here can really help keep you motivated and on track.

[funwithdebt]

Granite,

Thank you for sharing, I think it helps for my wife to see that we aren't the only ones in this situation, she sometimes feels that way.

We can do this, canceled cable today and dropped my insurance by 20 bucks a month. Once her cell contract is up we can reduce her exp there.

Of course, now I need to get a TV air attena so I can watch the locals at least, but its better than 60 a month on dish.

[FoolFromAZ]

I am kind of in similar situation as yours. I have cc debt around 50K and I have car loan of 21K and home mortgage 1st and 2nd ( 280K). My income is pretty much same as yours and I am also a Software Developer.

If you dont mind, can I ask you this question. You may ignore if you dont want to share. What all did you have to buy or spend on to get into this much debt. Did you not feel that you were living beyond your mean when your CC debt was around 50K or 100K?

My CC debt was going up last year, when it was around 60K, i realized that I was in trouble. since then I started cutting as much as I could. I was paying off my cc debt quicker, suddenly we had an employment break for a month, that again increased my debt back up 5K more. anyway mine is currently around 50K. I am only making minimum payments and I am just dumping every penny I save in to saving account (emergency fund). I have 4K currently in it.. until it goes up to 30K, I wont send anything more than minimum payment for all my credit cards and I am not using my credit cards either. anyway intrest rate on my credit cards are from 0% to 10%.. so i thought I am ok on that.

[swaymonae]

If you'r keeping the internet, just logon to websites like cbs.com, fox.com or any other network lthat you used to frequent via cable, they all have full episodes online.

Also, I read everything in this thread.. you said "try" a couple times like it was nothing.. you're just going to "try" and succeed in life financially?

I understand you make good money, but if you "try" and you "fail" you're going to be in a world of hurt here pretty soon... BK is obviously not the answer for you, as you still have the means to get out of your debt and if you think it's going to save you money, you're wrong.. I know the laws changed, and I'm not sure what the stipulations are now but I do know that after that BK, your credit card limits are going to be $300 with an introductory fee of $200 leaving you with $100 available cr, a monthly "maintenance fee" of $10, a yearly fee of $150 and an APR of 21% -and good luck getting anything better for a while..

I honestly don't think you're mentally ready to change.. you're finances are still in control of you and your attitude towards getting out of debt is still pretty reckless..

$200/month of "misc" or clothes is just silly.

G'luck,.. I really hope you start making good decisions because based on your income.. your future has the potential to be very comfortable.

[funwithdebt]

I honestly don't think you're mentally ready to change.. you're finances are still in control of you and your attitude towards getting out of debt is still pretty reckless..

$200/month of "misc" or clothes is just silly.

.

I would never get rid of internet, its way better than food... Seriously, though, I work from home so there is no getting rid of the net.

Um, in previous posts, we have elimated the misc budget. Clothes are gone too. I'm going to be paying 900 a month over miniums. in less than a year, 3 cards will be paid off. Maybe more or sooner if we can find some extra money. I think we are mentally ready, and it will be a tough road. Of course, there is no try, only do or do not We do have about $200 of wiggle room and will be guarding that carefully and saving to cover emergencies.

Once again, not looking at BK at this time.

And actually, both cars will paid off as well, one in 3 years, the other by the end of our plan

[swaymonae]

You also said you would "try" this budget for two months. In June are you reinstating the misc and clothing expenses? If not, great..

Glad they talked you out of BK, just thought I could've added on what to expect afterwards, after all, I filed in 2003.

[funwithdebt]

No, the budget will be the budget for some time to come. Until I get my promo at work (I can always hope right) This is what we will be going off of. Basically 5000 to debt and 4500 to exp. If it got too crazy or we couldn't cover emergencies then I would look to get rid of 1 car for a while.

I know this will work with alot of discipline, and there is no time to get some like the present

The only reason for BK at this point would be job loss. I've seen the light

While this is a completely serious situation, I'm trying to stay light and humerous in my posts cause its the only way I survive it all.

[wnlbutterfly]

Looks like you are getting a "IT CAN BE DONE" attitude. That is what you need!! Glad to see it!

The only other thing I would point out that popped at me in one of your posts was this:

"When the cash is done, we don't go out."

At the point you are at right now, it just needs to be "WE WON'T GO OUT" period. Remember, this isn't forever. Just think what you can do once you have that credit card debt paid off and that money you are sending to them is now YOURS.

[DebbieL]

I wish you all the best as you pay down your debt. It may not always be fun in the process, but just think of how much better off you'll be when it's over. Just like the poster above me said. Plus, by then you'll be in the habit of living BELOW your means so savings should be easier. I'm proud of you for not trying to take the easy way out. You are going to make it!

[arthurb999]

Five years from now when you can start SAVING 5000 a month... with a paid off everything.... nice position to be in

[funwithdebt]

Well, I think not going out at all every is unrealistic honestly. Its just not going to work for us. Now, when 150 is spent, we won't be going out, and we don't have spend 150, but I'm not going to set a budget that I can't live by.

Now, that being said, we will go as hard as we can as long as we can and funnel as much as we can into debt. At some point we may revaluate the amount on the snowball so that we can get on with our lives and have kids. I'm 34 and my wife is 32. But that discussion is about 3 years down the road, and I'm guessing with raises and such we will be out in about 4 years or less.

Even better than 5000 a month, I'm guessing we will be closer to saving 6 or 7 Then I can knock out the second mortgage