Announcement

Collapse
No announcement yet.

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

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

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

    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.
    Last edited by catatonico; 05-14-2010, 08:49 AM. Reason: Take out irrelevant information :)

    #2
    I am trying to muddy thru the story and see what you need help with and what can be "ignored".

    Questions- are the items on credit report something you still need to pay? Or are all the debts written off? I did not see a line item in budget for the debt payments?

    If you net $3000/mo take home and spend $2600/mo, you have $400 left. The best method to capture this is to pay yourself first. Don't save what is left, save first.

    So each day you get paid, put $200 into a savings account which has NO ATM ACCESS. Set the account up to be deposit only. Put $200 in, then spend the rest on the items in the budget.

    See if that works (worked for me when I was younger).

    Comment


      #3
      Everything on the credit report is written off. The only current, open debt that I still have is my car.

      I know that it was a lot to read... as I said in the post, part of it was just me needing to get things off of my chest.

      I honestly think that our biggest issue (other than the collections that are just sitting there simmering) is the lack of an EF. Any medical issues that come up tend to send me scrounging for money, so i know that I need to plan for those (and that it with decent insurance from my company). I will call my payroll dept and have them send $100/week (I get paid weekly) to our rainy day account (not tied to my other accounts, no ATM access, no check card, no checks - I have to physically go to the bank to withdraw money - which I hate doing), which I'll need to relabel to our EF (haven't used the account in a while, but its still there).

      Most of the collections I can pay-off, if it ever came down to it. I did have a couple that managed to get judgements against me, but I zapped them quickly before they got the garnishment. I'm only hearing from one other, and I'm waiting on verification of it because I honestly don't remember it (its probably accurate, but I want to be certain). If its mine, I'll more than likely just ask for a pay-for-delete or a settlement on it. I'm just not sure about what to do with the others, or if I should just let them simmer and see if they boil. I don't really like doing things that way, but I don't have the money immediately available to take care of them.

      I am definitely going to set up our EF and, as you said, is to pay myself first, so that I can begin to build up some kind of buffer for those emergencies that my luck seems to attract.

      Comment


        #4
        So if you filed bankruptcy, you'd get rid of a car debt and nothing else? What good would that do?

        Steps:
        1) Press your attorney about getting this resolved, or find one that will. The burden of proof is on the insurance co. to prove your husband committed arson. If they do not have enough proof that he did, they have no case to stand on, and should have to pay the claim as presented. This would release your husband to find a job again. Then life is easier.
        2) Whatever you're renting from Aaron's - take it all back. If it's a microwave you need to cook with, go to a pawn shop and get a used one. Temporary measure. If it's a couch or TV or something, may just have to live without for a while. Save up to purchase a used one. Then save up to purchase a new one.
        3) If you filed bankruptcy before the collections items, then they do not have to be paid, so there's nothing to work through.
        4) See if downsizing in car is an option. 390/month is high. How much do you owe on the car? what interest rate?
        5) Build up a cash buffer in a separate account like Jim said of about 1 month's expenses (for starters)- in your case about $2500. Ultimately you'll want to get this up to 3-6 months.
        6) Make sure you get life insurance on yourself. Get enough to cover your share of the debts plus about 10-12x your income (20-30yr term). If something were to happen to you, your family is uber-screwed. Hubby can't even get a job to replace your income. This is crucial for you to get.
        7) Cellphones + cable/phone/internet = $190 + 170 = $360 which seems really high. Cutback somehow?
        Last edited by jpg7n16; 05-14-2010, 08:53 AM.

        Comment


          #5
          Originally posted by catatonico View Post
          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
          I picked out the things I'd be focusing on first. Your cell phone bill is insane. Ditch the cell phones entirely and get a land line. Actually, you included phone in the last item so I guess you already have a land line. Cell phones are LUXURIES. You DO NOT need one unless your job requires it. If that's the case, cut back to the cheapest plan you can, maybe even go with a prepaid phone.

          What is Aaron's Rental and what are you renting? Is that like a Rent-a-Center deal? If so, those are huge rip-offs. I would try to get out of both of those ASAP.

          How much do you owe on the car and what is it currently worth?

          I would also be cutting the cable TV and looking for cheaper internet access. We pay a total of about $70 for cable/phone/internet in our house.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


            #6
            I'm going to try to address everything quickly (without my usual carrying-on)

            Bankruptcy - Is a last resort for me, and will only be considered if I end up with the balance of the car AND the 2nd mortgage on the house coming after me (I can't take the chance on them getting judgements and garnishments); they are currently not even trying to contact me

            Cellphones - locked into contract and necessary for work; currently trying to get my company to pay for it, but I am not going to push so hard that I risk my job on it. I admit, too high, though

            Cable - locked into contract on current bundle until late September. I will ditch it, and just do extreme basic (or internet and phone only) when we move and can change it

            Aaron's - probably was a mistake, but now locked into a contract and I can't return the TVs for a few months, and they will be paid off by then. I pay about double what I'm supposed to. No interest for 6 months on both TVs (our others died in the same week and we had a knee jerk reaction)

            Car - unfortunately, getting out of it is not an option. I am upside down on it (by about 4k), I live 50 miles away from where I work, and I have been turned down by everyone. Drive Time was the only place that would sell to me when our truck finally died (it had 300k miles on it, so it was bound to happen). Believe me... I want out of it badly, but when you have credit like I do and you need something fast in order to keep your job, you take what you can. I only had 2k saved when the truck died, so I used that as a down payment. At least they are reporting favorably to the credit bureaus. I've been adding more to the payments, as I can.

            Life Insurance - Life insurance is covered through my job at about 8x my income (I don't have to die on the job), and I have another policy paid for by my grandparents that is for $200k (about 4x my current income)

            Attorney - unfortunately, we have to use a public defender, but he is not the one holding up the case. The judge keeps pushing it back. The judge and the prosecutor have been continuing the case for 2 years now. Our attorney is leaning on the prosecutor to drop it, and has recently submitted evidence refuting everything the prosecutor claims, so we're hoping this will be over soon. But I'm not going to count on it... I can't. ***EDIT: I forgot to say that we were advised to completely drop the insurance claim on the house in order to make my husband's criminal trial look better (that was NOT the public defender advising that... that was an attorney that was hired for us, that I ended up firing because he blabbed the case to everyone - another long story), so the insurance part is done and the house was not paid for by the insurance company. At least they fixed it for the mortgage company after the mortgage company foreclosed on it

            I can see my way clear of a lot of the current stuff (so long as I get that EF built up quickly so that I am better equipped to handle anything that may come up). I am really concerned with the collections. I am not sure what to do about them.
            Last edited by catatonico; 05-14-2010, 09:59 AM.

            Comment


              #7
              Originally posted by catatonico View Post
              Cellphones - locked into contract

              Cable - locked into contract

              Aaron's - probably was a mistake, but now locked into a contract
              All contracts can be broken for a price. I would pull out the paperwork on each of these and find out what it would cost you to get out of them. It might save you more money in the long run. For example, breaking a cell contract usually costs about $150-200. You can save that in a month or two by not having the service. You can get a cheap prepaid plan if you need it for work.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


                #8
                Cellphones - locked into contract and necessary for work; currently trying to get my company to pay for it, but I am not going to push so hard that I risk my job on it. I admit, too high, though
                reduce the fee some way some how- the cell phone company would prefer you pay $50/mo than nothing/month, use that to your advantage- negotiate a better rate or walk away.

                at minimum if you need the phones for work, and the company does not pay, claim it on tax return as unreimbursed business expenses.

                If you cannot lose the cell phones, lose the landline (we have no landline, just cell phones).

                Comment


                  #9
                  Attorney - unfortunately, we have to use a public defender, but he is not the one holding up the case. The judge keeps pushing it back. The judge and the prosecutor have been continuing the case for 2 years now. Our attorney is leaning on the prosecutor to drop it, and has recently submitted evidence refuting everything the prosecutor claims, so we're hoping this will be over soon. But I'm not going to count on it... I can't. ***EDIT: I forgot to say that we were advised to completely drop the insurance claim on the house in order to make my husband's criminal trial look better (that was NOT the public defender advising that... that was an attorney that was hired for us, that I ended up firing because he blabbed the case to everyone - another long story), so the insurance part is done and the house was not paid for by the insurance company. At least they fixed it for the mortgage company after the mortgage company foreclosed on it
                  I think its important to not add drama to the situation... deal with budget in black and white terms. Don't focus on past judgements, don't focus on who is getting screwed by who and what judge or lawyer did what to who.

                  Focus on the $2600 expenses and $3000 income and preserve both of those at all costs. If husband is dead weight kick his a** out, if husband can contribute to improving situation (by getting any paying job) he should do so immediately. If you or him continue to accept excuses for why he cannot help, eventually the relationship will struggle and possibly cause more drama.

                  If some of the debts (line items) in the budget will be paid off soon, make sure you capture those payoffs into savings. If the rental TV is paid off in July, that payment goes into savings in August and all months after.

                  Comment


                    #10
                    The cancellation fee is $350/phone (we have two smart phones). I use at least 1400 minutes/month for work and have to be able to receive and respond to email from my phone (hence the smart phone). Doing stuff like that usually gets me a 7.5% raise at review time, and it allows me to maintain a flexible schedule when I need it.

                    Since the phones are in my husband's name, I could simply drop them and get the phones in my name instead, which would allow me to take advantage of a 20% discount that is offered to my company's employees, but I would have to be able to afford any deposit required. If I did that, I could drop my husband's smartphone and data plan and just get him a regular phone for an extra $10/month. That would cut the phone bills down to about $90, I think. Its the same thing with the cable. Its in his name, so I could see about doing that to.

                    Yes... I am talking about deliberately ruining his credit. He's got a ton more debt then I do, though, from his business going belly-up, and he is being advised to file bankruptcy after his case is done. In Georgia, his creditors can not come after me for his debt, as we are not a community property state. I've fought some and won already. Its not the most moral thing in the world to do, but its an option that I have.

                    Comment


                      #11
                      They can't come after you for his debt but they can take your income into consideration when they decide whether or not to sue him for what he owes. Just keep that in mind.

                      I am in a community property state and made a heartbreaking decision not to marry the man I loved because his finances were a mess and he was facing numerous lawsuits etc. regarding his debt. One of things I found out during making that decision is that, while they can't come after the wife...they can try AND they can take your income into consideration when deciding what to make him pay.

                      Comment


                        #12
                        you are under 4k for your car, but much do you owe in total?

                        In future, never finance a car ever. Buy if with the cash. If you dont have enough cash, you dont need an expensive car. 5-6k car is good enough in these situations.

                        Comment


                          #13
                          Jim,

                          I'm sorry, but you touched on a nerve. My husband is NOT dead weight. There are more ways to help then strictly financial. He supported us well for awhile. I work full-time and am in school full-time, as well. I am only able to do that because my husband takes care of our 4-year old who requires special attention and extra work. Without him, I would have to pay daycare costs and then have to deal with them when they could not deal with him. I would also not have the time to do the 35+ hours worth of school work every week and still be any kind of parent to my son. When I was going through some tough times, he was the one that supported me. Why shouldn't I support him now? He does not ask for anything, nor does he spend money behind my back. Our kid is well-adjusted and happy with him. Please do not presume to judge a situation unless you know the WHOLE situation. And he has been applying everywhere. They get to the criminal check and stop because they have other applicants that are clean. He has been looking for any way to bring in some extra cash (including cutting grass, doing odd jobs, anything).

                          As for drama.. you are right. I do need to remove the emotions from it and look at it in black and white. That's what I'm trying to do, but when I am dealing with something that is not completely our fault (house fire, insurance company, etc), its hard to keep a level head when you are ticked.

                          I am going to try to get those cellphones cut down (Verizon, btw... I have never had much luck negotiating with them, though), but not at the cost of my boss's happiness with me. I am given a lot of lee-way and treated well because I am willing to go above and beyond, if needed and because I am always accessible. As I said... I will do what I can with the phones, but there is only so far I can go and maintain the accessibility my project manager has come to expect and depend on.

                          I agree with you about making sure that whatever money I am paying on the TVs gets put into my savings when the TVs are paid off.

                          What's a good number to shoot for in Savings? 3 months income? Also, what advice can you offer about the old collections? Should I just let them sit and see what happens? Or should I try to tackle any of those once I get some savings in place?

                          Comment


                            #14
                            You are right, Diamond. They can take my income into consideration when deciding what he has to pay. We'll have to be proceed with care, I guess.

                            Hector,

                            I don't prefer financing cars, but I was stuck with no vehicle, not much savings, and a job that I HAD to get back and forth to. As sole-earner, I just didn't see any options besides to do what I did.

                            The balance on the car is now about 7k. I financed about 9.5k. I have to consider the cost of fuel to drive 100+ miles a day and whether or not the car will get me there reliably. Being stranded in downtown Atlanta, in the dark, by yourself, is no fun for a female.

                            Comment


                              #15
                              Do you go to school nearby where you live?

                              I am asking because, if you are taking online classes and if rent is cheaper near your work compare to where you live, did you consider moving nearby your office so that you can save time and money on gas and will have more time to spend with your kid.

                              Comment

                              Working...
                              X