I made this post in the Bankruptcy forum originally, but as we have not yet filed I thought I could asked here and see if anyone could help.
Whether or not to file has been the topic of conversation between my husband and I for months. We really would like not to, do our best to work out how we can get ahead and then become so discouraged all over again. Tonight I actually started to fill out the paperwork but thought I would post here and see if anyone has advice, alternatives or perhaps think our situation is as bleek as we feel it is.
Long story short, bad money management skills, stupid mistakes, years of them...have resulted in $39,000 of credit card debt. I tried to alleviate the interest load by shuffling some of it to 0% apr cards but it is still so...hard.
After rent, utilities, health insurance, cell phone ($70) cheapest we can get atm) we have about $1000 we can throw at debt a month, possibly a little more if we get extra hours of work. $1000 is a definite...well as long as something doesn't come up (like the $500 car repair we just had to pay)
We don't have cable, gym, memberships to anything except for Netflix ($9) but we don't go out.
We are putting a very miniscule amount in retirement through work.
I didn't list every thing individually because everything that can be cut, is cut. I feel like I am suffocating. I am embarassed, ashamed and already inflict a lot of negative feedback on myself and realize this is all of our faults so please refrain if you are feeling the urge to do so. It is credit card debt, half health related costs and half we-were-stupid-and-irresponsible costs.
We don't own a home. Our income is around $4500 (after taxes) a month.
When I plug in our information in to debt calculators it will take over 3 years to pay with an insane amount of interest. My concern is what if one of us loses our jobs? We have no money in the bank, and my husband is currently in school so about $1000 a month is from his GI bill which we have 1 1/2 left with, so in a 1 1/2 we will be losing $1000 income and he will have 1 year left of school that we will have to pay for out of pocket...we won't have money to pay for it because we will be in so much debt.
We have 1 child, one on the way, and anything I bring it isn't constant (I don't have a trade or skill which is a whole other bag of insecurity issues)
I don't know what to do other than what we are doing. I don't know that we can get lower interest rates, and I don't know if debt repayment plans or bankruptcy is where we should go next. I have read about taking debt counseling courses but I don't know how to be sure which places are legit. We called a lawyer and he advised us filing for chapter 7...but I know that could be from wanting a case or just plain looking at the numbers and seeing we are drowning.
Can someone please point me in the right direction? We made our bed, and are ready to lay in it. I just need to know where to start.
Yearly income around $50,000-55,000
Total Debt: $38,000
Rent: 1,100
Health Insurance: 165.00
Phone: $100 (after taxes)
Prek: $198
Utilites: Approx $300
Netflix: 8.53
Internet: $64 (It used to be $80, we negotiated down. My husband has to have this level of internet for his work)
Food: $500
Gas: $350
Medical: (RX, Copays, etc) $200
Household (Toilet paper, toothpaste, shampoo etc) $100
Things that bound to come up in a month that fluxuate $100-$300 to be safe.
Then I'm sure there will be times when we eat out, need to buy a gift, etc etc etc I will also need to buy clothes for my growing child and I do try to get it one clearange or 2nd hand to help cut costs down.
Total:
$3385
So if we bring in the $4500 - $3385 = $1115 which puts me right about on budget of that $1000 a month payment assuming that the $200 isn't used elsewhere (sometimes gas or food ends up being more than budgeted but we are trying to stick as close to budget as possible)
Below are two sets of stats: The first being from July 2014 and the second is this month...little progress made.
As for minimums, it is 2% of the balance so these are round about figures
July 2014
Debt 1 11.90% $19,225.90 - $385
Debt 2 15.24% $5,425.43 $110
Debt 3 22.90% $3,742.25 (0% until April 2015) $75 will go to 22.99% after
Debt 4 13.90% $6,070.55 (0% until April 2015) $85 will go to 22.99% after
Debt 5 22.90% $4,227.25 (0% until April 2015) $85 will go to 22.99% after
Total: 38,691.38
This is now. Debt 1 and Debt 6 are with Navy Federal Credit Union. My husband as been with them for about 10 years, and I have been with them for 7. I am so reluctant to lose membership with them because of BK. We called them to see if we could work something out and they lowered our interest rate to 6% for a year. The reason debt 6 had a charge on it is because we had an unexpected bill come up that we had to pay asap and didn't have the cash flow. So while some of the other balances went down, the total stayed about the same.
Debt 1 NFCU 6% $18,870.74 - $188 (until Sep 2015) will go to 11.99% after
Debt 2 CHASE 15.24% $5,771.19 $110
Debt 3 DISCOVER 22.90% $2,548.25 (0% until April 2015) $75 will go to 22.99% after
Debt 4 USAA 13.90% $5,890.55 (0% until Feb 2015) $85 will go to 22.99% after
Debt 5 DISCOVER $3,977.25 (0% until April 2015) $85 will go to 22.99% after
Debt 6: NFCU 6% $1,637.94 (until Sept 15) $21 will go to 12.90% after
Total: $38,695.32
After sitting down with my husband again tonight we are just so concerned about...what if he lost his job? What will we do with GI runs out? How will we pay for school? We have a child and another to care for. We have no money in savings and less than $2000 in retirement. So then BK feels like our only way out and way to take the money we are paying on the debt and saving the heck out of it but then...I just really, really don't want to. I keep reading about some people feel that BK is amazing to start over, others say that...it such a horrific road to avoid at all costs.
Any help, thoughts advice, anything will be so helpful and appreciated.
