Oh I'm so Embarrassed!

[Anonymous]

I'm a complete newbie to this forum, and just looking to put it all on the table and hopefully hear back from someone that they were once in my shoes, and were able to work their way out (and maybe offer some suggestions)

I'll start by saying that I would consider my household to be "upper-middle class", and there is no good reason for us to be in debt the way we are.  There are no excuses, just the "gotta have it now" attitude I guess.  Our total credit card debt is, OMG are you ready for this, almost $55,000!  Interest rates range from 11.15% on the low end to 29.99% on the high end--CRAZY, I know!

Thing is, with all this debt,and no extra money available each month, we can't make much more than the minimum payments.  Second mortgage isn't an option because our DR is SO HIGH.  We are paying about $2000 per month on credit card payments, and well over half of that is going to the interest alone.  In many cases, almost 75% of the minimum payment goes to interest.  Consolidation loan--same thing--too high of a DR and no one would give us a loan.

According to the CB report, I've managed to pay everything on time (although I know for a fact that I've had some over 30-days along the way--don't know why they are not showing up, but glad for it).  The negative factors are too much debt, one collection agency (medical--and should be another one on there), ratio of available credit to balances on cc's.  I've managed to hold it together for all of these years, but my I'm about to snap!  If it weren't for the tax return this year, I don't know how I would have managed to get the bills paid.  I'm constantly Robbing Peter to Pay Paul, using every day of grace periods, and going right up to the 30-day mark, and sometimes beyond.  The late fees are costing extra money too!  Credit card companies are not willing to negotiate a better rate for us--seems we are not far enough in default to qualify for this.  But I'm trying to avoid that situation of being in default!

OK, enough of that.  I know what the problem is.  Now I need the solution.  Yes, we've stopped using all the credit cards.  My husband was the biggest abuser, so I've made him take over paying the bills each month, so he gets the big picture--not sure if that is a good idea or not.  We are even trying to sell off things just to pay down this debt.  Any other "realistic" suggestions?  Any would be greatly appreciated.  Thank you so much!

[creditwherecreditisdue]

Please post some more specifics here so we can better help you.

How much equity do you have in your home?

Are you expecting any irregular inflows of cash any time soon? An inheritance for instance.

Do you own anything you can sell?

Can you significantly alter your spending patterns? You need to desperately!

What state do you live in?

---

Short of that you may be facing a BK. Your debt is way to high and paying interest only on it is pointless. You need to get those balances down a great deal, pronto - otherwise you are going to have to dump the debt. You are incredibly close to the brink - far better to pull the plug early than wait until a lot more damage is done! Also, if your husband is the culprit do not leave payment of the bills solely in his hands. Make sure you are fully informed of the status of each and every one of those account on an (almost) daily basis. He may neglect his management role when it dawns on him just how hopeless the situation is. You don't want that to happen.

As far as being embarrassed is concerned - don't be! It isn't constructive. Many of us here have been in similar boxes and found our way out. Be thoughtful and decisive. Time is not on your side. Currently you are throwing many dollars away to interest payments and never really reducing your balances. There is, however, hope for the future, and the sooner you act the sooner it will be here.

Message Edited by creditwherecreditisdue on 06-10-2009 09:52 PM

[jaxstraw]

Welcome tophat.

First, don'tbe embaressed here. There are many here who are or have been in a similar situation and have come through.

It can be time consuming and it will be a change of lifestyle but it can be done.

I have not been in your situation but my wife was , her end result was BK but it gave her a start again and she has been perfect since.

I hope others can give better advice because mine is more of the pep talk, good luck

[Too_much_debt]

I feel your pain...

[Trishco]

Google hillybilly housewife for some intensely cheap menu's.  We are talking no frills here.  Just remember that it won't be forever.

Also, take on second, and if need be, third jobs.  Again, it won't be forever.

Go over basic monthly expenses such as cable and insurance premiums to see what can be cut to the bare bone.  Cable can be cut out period.  

Don't discount any savings whether it's $3 or $10, it will all add up!

I say this as at one point in my single mom life, I worked from 11 p.m. to 4 a.m. in the laundry department of a nursing home.  Not fun to say the least, but it served its purpose!

You came to an incredible group of people who I'm sure will share ideas and  cheer ya on!!

Trish

[wndrwmn78]

I really like Trishco's advice. You have the two options: either file BK, or if that is really what you do not want, cut out every single non-essential part of your lifestyle and get second jobs. If friends or family question it and you're too embarassed to explain why you no longer have cable, say you're doing some hard-core retirement saving. If you both have good salaries, I bet that by just not spending, and maybe getting a cheaper car, etc. you could pay it down more quickly than any of us could ever hope to.

I have never filed for BK, and I have perfect credit history, no baddies on my reports. My scores hover around 700...because I have too many inquiries and high utilization (40%), I have a hard time getting decent credit. (High utilization because of low limits.) But there are so many people on these forums who have filed BK and are getting great credit approvals 2 years later. (Can you tell I'm jealous?  So BK is definitely not the end of the world, and you will be on your way back up in no time...and imagine how good it will feel to have all that debt off your shoulders! And with your high salaries you'll be fine not having credit to use in the meantime.

Message Edited by wndrwmn78 on 06-10-2009 07:39 PM

[Anonymous]

Specifics, huh?  Well, FS is now 633--not horrible, but not good either.  Live in Wisconsin.  As for stuff we can sell, I've put everything from my jewelry to our boat up for sale.  I'm taking lunches to work instead of eating out, and we dont' eat out much for dinner.  Could be less though, honestly.  Cancelled the memberships to Weight Watchers, and the "Y", and cancelled the lawn service.  We are keeing the satellite TV cuz we live in the sticks and cannot get ANY tv without it.  Don't have any extra pay channels though.  Same with internet--satellite or nothing.   We don't do a lot of shopping for clothes, etc.  Most of our cc spending came from vacations, furniture, electronics, etc.  We used to spend a lot of money going out every weekend, but have stopped that almost completely.

No unusual money flow coming our way--not that I'm aware of anyway.  Oh, I also cut back on payroll tax withholdings, but don't want to do that too much and get into trouble at tax time!   I have taken another part-time job, on top of my full-time one.  Hard though, with kids at home.

Really don't want to do the BK thing--that reallyh scares me.  Although, I do know that life does go on.

[Trishco]

Oh oh oh....one more thing, that has saved me probably a lot of $$ as well as time is crockpot and freezer meals! 

When ground beef goes on sale, I'll cook up 10-20 lbs at a time and freeze it in portions.  Super fast and easy to throw together some sloppy joes, or soft tacos etc!!   If age appropriate, get the kids in on it!

It will be tough, but you have to make your "will" tougher!!  

[Imhotrodcrazy]

---

@Anonymous wrote:

I'm a complete newbie to this forum, and just looking to put it all on the table and hopefully hear back from someone that they were once in my shoes, and were able to work their way out (and maybe offer some suggestions)

I'll start by saying that I would consider my household to be "upper-middle class", and there is no good reason for us to be in debt the way we are.  There are no excuses, just the "gotta have it now" attitude I guess.  Our total credit card debt is, OMG are you ready for this, almost $55,000!  Interest rates range from 11.15% on the low end to 29.99% on the high end--CRAZY, I know!

Thing is, with all this debt,and no extra money available each month, we can't make much more than the minimum payments.  Second mortgage isn't an option because our DR is SO HIGH.  We are paying about $2000 per month on credit card payments, and well over half of that is going to the interest alone.  In many cases, almost 75% of the minimum payment goes to interest.  Consolidation loan--same thing--too high of a DR and no one would give us a loan.

According to the CB report, I've managed to pay everything on time (although I know for a fact that I've had some over 30-days along the way--don't know why they are not showing up, but glad for it).  The negative factors are too much debt, one collection agency (medical--and should be another one on there), ratio of available credit to balances on cc's.  I've managed to hold it together for all of these years, but my I'm about to snap!  If it weren't for the tax return this year, I don't know how I would have managed to get the bills paid.  I'm constantly Robbing Peter to Pay Paul, using every day of grace periods, and going right up to the 30-day mark, and sometimes beyond.  The late fees are costing extra money too!  Credit card companies are not willing to negotiate a better rate for us--seems we are not far enough in default to qualify for this.  But I'm trying to avoid that situation of being in default!

OK, enough of that.  I know what the problem is.  Now I need the solution.  Yes, we've stopped using all the credit cards.  My husband was the biggest abuser, so I've made him take over paying the bills each month, so he gets the big picture--not sure if that is a good idea or not.  We are even trying to sell off things just to pay down this debt.  Any other "realistic" suggestions?  Any would be greatly appreciated.  Thank you so much!

---

I will make you feel a lot better.  My wife, ( now ex because of it ), put me over $71,000 in cc debt.  I blame myself because I never checked on the household acct because I was too busy with my business.  I found myself, as others did here, in the same similar situation as you are now.  I was barely treading water and staying afloat.  I tried to avoid bk at all costs.  I did not want to feel like a "failure" but, I came to the realization that I had to do it.  I am just now comming out of that bk.  In fact, July 1, 2009 is the day it will be behind me.  I can't tell you what to do, that has to be your decision.  All I can say is, no matter how bad things seem to you, there is always someone out there, like me, who was in a little bit deeper.  You may not think so now, but things will work out for you when you make your decision.  Read as much as you can on this forum and listen to what a lot of the knowledgeable pros on this forum suggest to you.  I wish you luck in your decision. 

[creditwherecreditisdue]

Where do you live in WI? If you don't want to post it in the open forum PM me.

I do not know WI BK law with regard to homestead protection. I also do not know what your husband does, i.e. is he employed or does he have his own business? These are things you need expert advice on as it will be a large factor in your upcoming decision. (NOTE: I said expert advice! Not advice from the "Wisconsin rumor mill" as I call it.) I do know WI people and and I can fully understand your extreme reluctance to pursue the BK option, or even to post in this forum. But I do think you need to get yourself to the best BK attorney you can ASAP for an (almost always free) consultation and find out all the facts. Both of you must go and take a summary of your current status to the meeting with you. I understand that there are many areas of WI where this may not be terribly convenient to arrange, but you need facts and need them as quickly as possible. Times are tough and no one will think the less of you for looking into a BK. Just remember the purpose of filing a BK is to protect the assets that you currently have from those you owe money to. Nothing more and nothing less. Invest a few hours, get the facts and let us know what you find out.

P.S. Also, knowing WI people I'd be willing to wager you've already cut things pretty close to the bone and were not living that high on the hog to begin with. Is cutting your expenses further really a possibility?