newbie here, with huge debt :)

**dotty63** · 11-09-2013, 01:41 PM

Oh, wanted to add, that I am considering deferring my student loan, that will free up $100/month.
I am looking for a waitressing (lord give me strength) part time job, not easy to find around here, especially with my current work hours. I should in March be getting approx $1500 tax return. Was planning on just putting into a savings for emergencies. Oh, and when I talked to the credit card agencies, I was not trying to get them to limit my debt, just lower my interest rates. I found another link on a thread here, which explained to me why they are resistant to lowering rates (cause everyone is trying to lower their rates!). So, I don't know. I'm left basically with this thought. I defer the student loan, and even though I know it's wiser to pay off higher interest first, I'm going to pay off lower balances, freeing up those minimum payment dollars to at least live on, I think it will be quite a while before I can actually get to a point where I can use the minimum payments from one paid off debt to go towards another one. But yet, I'm feeling confident this will work. Perhaps it will take me 10 yrs of extremely frugal living to do it, but I will repay every single dollar and be debt free (other than my mortgage) before the day I die!

**disneysteve** · 11-09-2013, 01:45 PM

I think the biggest problem is your current job. You are barely earning anything. And I'm pretty sure forcing you to work overtime and not paying you for it is illegal. Slavery was abolished a long, long time ago. You may have good benefits but you can't pay your bills with benefits. I'd be looking for a better job (and a 2nd job in the meantime for sure).

I also think the house is too much for you with your current income. I'm a little surprised (though I suppose I shouldn't be - banks are insane) that you qualified for such a large mortgage. How much equity do you have and how much is the house worth?

**dotty63** · 11-09-2013, 03:15 PM

Originally posted by disneysteve View Post

I think the biggest problem is your current job. You are barely earning anything. And I'm pretty sure forcing you to work overtime and not paying you for it is illegal. Slavery was abolished a long, long time ago. You may have good benefits but you can't pay your bills with benefits. I'd be looking for a better job (and a 2nd job in the meantime for sure).

I also think the house is too much for you with your current income. I'm a little surprised (though I suppose I shouldn't be - banks are insane) that you qualified for such a large mortgage. How much equity do you have and how much is the house worth?

I agree about the job, and yes of course it's illegal to make people work off the clock, but I'm a public health nurse, there are simply not enough hours in the working day (even though I never take a lunch break).
You are so right about not being able to pay bills with benifits, that's an excellent point, and perhaps I've become too emotionally attached to my benefits! And emotions have no business in finances!(I get a pension and health insurance is $85 month, dental is %35month, that just went up this month it used to be $40 and $20).
But another hesitation about leaving the current job is that the nearest health facility to work at is 60 miles away. Currently, I drive 15 miles to work, once at work I use a municipal vehicle to make home visits). My current vehicle would not withstand that kind of driving, so I would have to get a more dependable set of wheels. Conservatively, I'm thinking that a car loan would add $200 month to my expenses.
I have been looking for another job but it really is a depressed economy here in this part of the country, I'd be willing to do retail, waitressing or housekeeping, doesn't matter to me, but really, there are no jobs here, especially with my limited availability due to my main job.

The house. Well, it's $200/month cheaper than what I was paying in rent, when renting, my power bill budget which included heat and lights was a budget plan of $130/month, and garbage removal was $30/month, I don't pay for garbage removal here). Of course, when renting, I didn't have to buy the new furnace (which I paid for by borrowing against my retirement acct, comes straight out of my paycheck, that is why my net is $2100/month, before buying the furnace, my net was 2350/month).
I've put approximately $6000 on credit cards between the dental work not covered by insurance, the auto repairs, the septic repairs). I used $3000 that I had in savings in other general repair of the house. I was originally qualified for some crazy amount of loan, something like $120,000. I was able to buy this home by putting only $5000 down, so actually, I owe closer to $78,000 on it, not 80,000. As far as equity in the home, when my bank came to appraise it, they did it appraise it at $109,000 (meaning that is how much they would have let me borrow to pay for the home, luckily my accepted offer was significantly less than that!).
So, on paper it looks like there is some equity, but I wouldn't count on that in this economy and that can fluctuate so much. But I can tell you that I must have looked at 50 homes for sale under $100,000, and this was the best I was going to do.
I do not for one moment regret buying this home, I will somehow find a way out of this.
I may have to scrape by like crazy this winter, but come summer it will be easier to find a part time job as this is a tourist area. Not that a part time job alone will fix this, but it will help.

**hamchan** · 11-09-2013, 03:39 PM

I would honestly talk to a bankruptcy attorney. At your income level you should certainly qualify for a chapter seven, and they can't take your car or your primary residence. Believe me, it's a massive relief to get a fresh start. It doesn't sound to me like you have a ton of options for cheaper housing or better paying work. And you are already working a lot of hours in a demanding job. Taking on another job would very likely start yo cause you health issues. Your physical stamina is finite. Without adequate rest your body cannot repair itself and you increase your risk for injuries, GI problems, cancer, etc. If you didn't have to pay out 800 a month to debtors you could finish your BA and be in a much better position quickly. Some people are dead set against bankruptcy, but I believe it is both valuable and often necessary. None of your creditors would have any compunction about taking you to court to have your wages garnished. You have just as much right to use the laws to look out for your best interests. It will not cost you anything for a consult with a bankruptcy lawyer, and they can give you all the info on what will and won't happen. Don't look at it as a failure. Look at it as a new start.

**dotty63** · 11-09-2013, 04:06 PM

My mother had suggested bankruptcy (after scolding me horribly for taking such a huge loss in the divorce, but of course, I hadn't told her about the multiple abuse issues, and please, while I can take being judeged for my fiscal irresponsibility, I have more difficulty for being judged for taking the abuse as long as I did, but I now have three healthy grown children who are making their way in the world and thus far, seem no worse for the wear of their upbringing, but I was able to maintain a strong presence for them, in fact, the youngest had no idea of the abuse until family counseling during the divorce, sorry, I digressed), but I really want to try again with my creditors.
If I can just get them to lower the interest, and accept less than the minimum payments, at least for a while, it would help. I have worked the numbers all kinds of ways and admittedly, my head gets to spinning and my pencils break but I think I have it figured that I could maybe be out of debt by 2024. I will be 61 yrs old at that point.
The thought of not paying for what I've purchased is something that doesn't feel right to me.
I'm going to sleep on this tonight, and go for a long walk tomorrow and ask for some guidance to reach me somehow. Perhaps I just need a better backbone when dealing with these creditors? I'm not exactly a forceful type of person. But I do have determination and I need to make it work for me here.

**disneysteve** · 11-09-2013, 06:15 PM

Originally posted by hamchan View Post

I would honestly talk to a bankruptcy attorney. At your income level you should certainly qualify for a chapter seven

I disagree. The answer to low income isn't bankruptcy - it's a better income. OP, you can fix this if you really want to. You're a nurse. I'm willing to bet nurses in the private sector are earning more than $2,200/month. If the nearest medical center is 60 miles away then that's where you need to go. Sell the house and go where the jobs are.

As for the credit cards, let them know that you're willing to pay if they lower the rate but if not, you are going to stop payments entirely as you can't afford them. Then do just that. You said that your credit is already bad so letting those accounts go into collections won't do any more harm. Don't defer your student loans. That just delays the problem. I would much sooner default on the credit cards and then down the line you can negotiate a settlement with the colleciton agencies for 25 cents on the dollar.

**hamchan** · 11-09-2013, 06:22 PM

Yes, and her chances of increasing her income go up if she is able to finish the degree she has already invested time and money into, at least some of which she is currently paying on.

And it is absolutely not true that her creditors can't do anything if she stops paying. I got sued over a six year old medical bill that my insurance declined, which I had already paid half of. The total was around 500$. After the lawsuit it went up to 2000$ and they drained my bank account of everything in it one day. No warning. No letters or phone calls for years. I couldn't pay rent and had to get a payday loan to buy food. The only reason they didn't do anything sooner is because until that point my income was low enough that I was judgement proof. The OP is not.

**hamchan** · 11-09-2013, 06:27 PM

There are also tax implications if you settle. There are no such implications after filing bankruptcy, and ultimately even with the filing and attorney fees it will probably be not more than 1/10th of what she owes. Plus her credit is currently trashed anyway, so she is going to be better off in virtually every way filing over trying to pay it off and putting herself at risk for a lawsuit. I've brought my credit up much faster post bankruptcy than I ever could have without filing.

**disneysteve** · 11-09-2013, 06:27 PM

Originally posted by hamchan View Post

they drained my bank account of everything in it one day. No warning.

How did they get access to your bank account?

**dotty63** · 11-09-2013, 07:32 PM

I sincerely appreciate all comments and advice that has been given, as vastly different as the advice has been, and I thank you.
Truly, this is a very complicated matter and it really wasn't until I shared it on here that it's coming to settle on me and I am actually feeling it for all it's intensity.

**hamchan** · 11-09-2013, 07:52 PM

Originally posted by disneysteve View Post

How did they get access to your bank account?

Once they have a judgement they can get permission from the court to tap your bank account and they can take all of it until the debt is repaid. They have ways of finding out where your bank account is. It might take time, but they will find it if you have one.

The only way I was able to get the money back and stop them from doing it again was to file for bankruptcy. After that experience I have zero sympathy for creditors. I won't compromise my well being over a bill I can't afford to pay.

**snafu** · 11-10-2013, 08:36 AM

You have explained that your take home income is $ 2,200 while the outgo is $ 2,350. not including food. I disagree with your view that buying that home was cheaper than rent in your circumstances. First you agreed to take on the debt accrued in a painful marriage and had no emergency savings in place. With less than 20% downpayment you are required to have very expensive mortgage insurance added to property tax, utilities, land phone since cell coverage is insufficient in your zone + cell. Worse yet is without an emergency or home maintenance fund in place you've had to replace the furnace, water tank and major septic tank work. ouch

Added to this mix is that the house prevents you from seeking a decent paying job in another location. It has been pointed out that creditors charge you higher interest because your credit limit to debt ratio is so high. Over riding all these sad facts is that your expenses at $ 2,350. exceed your take home $ 2,200. Since you reject the idea of selling, would it be possible to rent that house at a rate to cover all it's expenses? It's a high risk option because any month empty shifts the whole cost to you. Alternatively, would you consider sharing the house with a roommate for half the operating cost?

I worry about pointing this out but you believe you took the 'easiest way' out of marriage, likely find it easiest to remain in your current job that is comfortable and familiar. At 50 you also need to think about your retirement. I hope that you have been contributing to an employer's pension all these years and did not relinquish those benefits in
divorce.

**dotty63** · 11-10-2013, 12:33 PM

Originally posted by snafu View Post

You have explained that your take home income is $ 2,200 while the outgo is $ 2,350. not including food. I disagree with your view that buying that home was cheaper than rent in your circumstances. First you agreed to take on the debt accrued in a painful marriage and had no emergency savings in place. With less than 20% downpayment you are required to have very expensive mortgage insurance added to property tax, utilities, land phone since cell coverage is insufficient in your zone + cell. Worse yet is without an emergency or home maintenance fund in place you've had to replace the furnace, water tank and major septic tank work. ouch

Added to this mix is that the house prevents you from seeking a decent paying job in another location. It has been pointed out that creditors charge you higher interest because your credit limit to debt ratio is so high. Over riding all these sad facts is that your expenses at $ 2,350. exceed your take home $ 2,200. Since you reject the idea of selling, would it be possible to rent that house at a rate to cover all it's expenses? It's a high risk option because any month empty shifts the whole cost to you. Alternatively, would you consider sharing the house with a roommate for half the operating cost?

I worry about pointing this out but you believe you took the 'easiest way' out of marriage, likely find it easiest to remain in your current job that is comfortable and familiar. At 50 you also need to think about your retirement. I hope that you have been contributing to an employer's pension all these years and did not relinquish those benefits in
divorce.

Good point about the house being more expensive in the overall long run than renting was, although the rent was going to be raised another $100 month by September. But at least I would have still had my other money in the bank rather than spending on repairs, so that is a very good point.
While renting, I was still 60 miles away from another job however.
I did have a smaller than needed emergency fund after buying this place. It just got used up very quickly. I was out on disability for only a few weeks (injury from work), but along with repairs to the house (some I was totally prepared for but others were not noticed during the inspection), that fund got used up very quickly. And actually, with the way things worked out in my mortgage, there is no PMI as it's a rural development loan, which can be obtained without a down payment, but I chose to make one. I never rejected the idea of selling, but am obligated to live in the home for 12 months after taking out the loan, leaving me with another few months before I can rent or place for sale. I tried the roommate thing and did not get any responses from people I would feel safe having access to my home.
I assure you, I did not take the "easiest way out" of my abusive marriage. It was either leave, or die. Literally die. But I am glad for you that you've obviously never experienced what I've experienced.
I have been contributing to my retirement for as long as I've been a nurse, which has only been 10 yrs and yes, was able to keep that despite the divorce.
I'm happy to report a slight miracle. I had previously applied for a part time job at a local B and B, and this morning they called me, and they agreed to hire me, partially obviously because they needed someone there NOW and I was able to do that. I'm thrilled. No, it's not going to solve every problem, but it's only a few miles away, so I can walk there if I want. The work was not as physically demanding as other housekeeping jobs, as each room is set up like a little home, so it was kinda like cleaning my house 6 times. A little tiring yes, but doable. They are being generous in the pay, but they are asking me to accept cash as payment. Which is a good thing and a bad thing...I'm going to have horrible guilt working "under the table" and not paying income taxes on this money. I will bring home about $100 per week from this job (on Sat and Sun mornings, and I will also work legal holidays when I don't have to work my real job, but I do have to work 2 legal holidays per year at my real job).
I called my father today and he will take care of my propane obligation, which frees up another $180 per month.
So now, I've got an extra $580 per month.
Not the ultimate solution, but I feel hopeful.
I am going to try again with the credit agencies to work on lowering interest or accepting less than minimum payments.
I just spent a little time perusing the jobs in the bigger city, and I'm going to brush up my resume tomorrow, and start attaching it to the online applications. I need to go on interviews and see what kind of salary and benefits are offered.

**dotty63** · 11-10-2013, 12:45 PM

Oh, and cell service is sketchy here, but I assure you, the beauty of the mountains that surrounds me makes up for it. My cell phone does get reception in the front part of the house, but not in the back section.

newbie here, with huge debt :)