Oh I'm so Embarrassed!

[haulingthescoreup]

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singduets wrote:

All I can say is don't be eambarrassed!  There are many of us out here with the same problems as you.  Our credit card debt (which, like you, I left my husband in charge of -- silly me!) was about $50K as well.  We first decided to turn them to a debt elimination company.....BIG mistake.  For 4 months all they did was take our money for themselves and change our address to theirs on all our accounts so we were unaware that nothing was happening with them.  We realized this when we were served a summons for court by one of the creditors who was suing us! 

At that point, I fired the debt elimination company and took things into my own hands...

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Welcome to all the new members of the forums! Lots of hard-earned wisdom here.

I'm glad that singduets (hey, I sing duets too!) mentioned debt elimination companies. Her experience is typical --these companies take your money, tell you not to pay your bills, and let your credit be destroyed in hopes that they can get the lenders to cave in and cut deals on your debt. (And btw, in the future, collection agencies can buy that unpaid portion of the debt and come after you!)

We don't even mention this type of "credit-repair" business here, because it's against the Credit Repair Discussion Guidelines, Terms of Service, and User Guidelines. But it's always handy to have a testimonial from someone who learned the hard way.

For those trying to figure their best way out of debt, the Federal Trade Commission has a website that discusses all the options: Knee Deep in Debt.

I never had much CC debt, but I was a stay-at-home mom for many years until I went back to work. I'm waaaaaay short on retirement savings, and I was still paying three tuitions for my kids, so I wound up getting a second job. Not only did it bring in more income, but I was too tired and had no time to spend it, so that helped me sock away a lot more than I could have with the income from just one.

Recently, with the market jitters, I stopped funding my retirement accounts with the maximum $22K a year (I'm over 50) and reduced it to just enough to get the matching. I'm putting the difference into regular savings to get my emergency fund up to 6-8 months, and then I'll switch back.

It's not a bunch of fun working 60 hours a week, but that extra money is awfully nice to have coming in.

Good luck to all!

[Anonymous]

Hi, I apologize if I sound harsh but have you REALLY eliminated all unnecessary expenses? Do you use a housekeeping, laundry or gardening service? Do you have a home phone as well as multiple cell phones? Do you still have cable or premium channels? Do you eat any meals out? Do you go out often or continue to take vacations? Do your kids go to private school or participate in mulitple extra-cirricular activities? I know that there are numerous areas where we all think we can't cut back any further but the truth is that we could. I had to act as if I'd lost my job and create the tightest budget I could imagine and actually follow it for months before I felt like I was even making the slightest dent in my CC debt. Think basic necessities and survival. You can also call you Credit Card companies and hint at bankruptcy to obtain a lower interest rate. They would rather get some of their money back than none at all. Lastly, educate yourself and your spouse and pay bills together. It is never a wise move to have one person solely responsible for handling the budget and bills. You CAN solve this problem, it just takes time and commitment!!

[Anonymous]

Hi tohat1,

your debt is really high. I could see that there is many giving you good advice, so maybe just to summarize it: Before you can make further decision what to do, you should start budgetting to see whether you can make it on your own, or you would need further help or file for BK. It will be tough work and you have to become a general like in the battle filed - tough, strict, no compromises, no mercy to yourself and to your family. First you should sit down and analyze all your expenses:

- do you have Cable TV? if so cancel it and borrow DVDs in your local store or at Netflix, instead of paying $36/mo or so you will pay around 5 dollars/mo

- if you have subscriptions, cancel or do not renew them

- if every member of your family has a cell phone, keep only one and cancel others or put them on hold

- do not use car, walk even shopping (I personally have bought a bag with wheels and walk)

- if you lunch and dine out, stop and eat at home, as Trishco says cook large chunk of food and freeze it (I for example buy pasta and bake it with ground beef, sausage or chicken with aggs and a little cheese in a crockpot and have food for a whole week and I cook two or three different dishes so I do not have to eat same food every day, even thoughI do not have problem with it.

- you should start planning your grocery shopping, buy only such food which can be prepared in a large scale (rice, pasta, potatoes, etc), once I made menus for myself for every day and created a list what needs to be bought for those menus. And when you are in a grocery store, buy only what is on the list, no excuses. (hard one!)

- you may look at the option to reduce electric bills not only by not having lights or computer ON all day, but maybe if you find somespare cash, buy the energy-efficient bulbs, my bill dropped by circa $10 when I replaced all conventional bulbs, but this option involves spending, so think and budget it carefully.

These are just examples how you may squeeze your budget and will see if you can save extra money every month. If you find out so, then every paycheck pay this extra money to your most expensive credit card on top of your regular payments. Do not wait until the last moment, pay it right away from your paycheck and live of the rest. Pay your regular payments immediatelly as well right after you pay your other bills (such as electricity, gas, HOA, etc.)

You should talk to all members of your family about the budget and new rules so everybody will follow it and know about it at all.

Then you may start looking for additional income, but use it all to pay the most expensive CC first.

After you sit down and do all the analysis of your situation you will see whether you can make it or you are still short and you will need help from the debt relief companies (be careful when selecting one) or file BK.

[Anonymous]

OK so you have no reason to be embarrassed but you should start by being honest. I work for a credit card company and by your interest rates I can see exactly where you stand. And so you know an over 30 day late is actually after you have missed two months worth of payments even though you have been 30+ days late its really just considered a 1-5 day late. But you need to first get it out of your head that you are "upper middle class". YOU"RE NOT. As soon as you come to that realization maybe you can curb your spending. #1 all meals should be had at home. If you're even just buying lunch out. You're spending over $4000 A year just for you and the hubby.

If you were upper middle class you would have a serious savings account or retirement set up. Upper middle class is not determined by your house size the clothes you wear or the car you drive. Its plain and simple your bank account. Sounds to me like you have a dropping credit score and if I were you I would look into a HELOC even though I bet your credit score has sunk enough not to qaulify you. If you only pay the minium you will be in debt till you're old and gray. Cut up all your cards, and how much are you guys putting towards your 401K and IRAs right now. Think about putting the money you are saving for retirement towards those credit card bills. Bottom line. The credit card company is not going to help you. Contact CCCS and see if they can help you. And try finding shops that offer consignment and sell some of your higher end clothes and downsize everything, And no more eating out. It will be the death of you. trust me. and remember..YOU're Poor. not upper middle class. maybe then u will realise the importance of paying cash for everything. If you can't buy it out right you can't afford it.  

[haulingthescoreup]

risingscore, there's some good advice in there, and I understand (and apply) the concept of tough love, but please tread more gently.

Unlike other forums, we make it a point of being helpful without beating down on an already beaten fellow member.

The main forums page features this message: "Please be friendly, supportive and respectful!" That's our goal.

[Anonymous]

Dear Haul. Thank you for pointing that out to me. I didn't realize I had been as harsh as I was till I reread my post. Wow I sounded b@!?tchy!!! I guess coming from a "lowerclass" family that was always taught the value of everything it just sort of seems like a lot of everyones problem on here was truly just living out of there means. Maybe I let a little bit of that 13 year old that never got more than the second hand remnants of the "rich" people that my mother worked for scrubbing their toilets and cooking their meals come out. I just think this whole class thing is ridiculous and with the exception of the emensely poor and the outrageously rich we are all in the same boat. Thanksfor reeling me in. I will be sure to be nicer in the future. But it was my tough love that got my boyfriends credit score to jump 180 points in a year and a half. He was around 440 when we met. And it's still not good but it was my tough love advice that got it there. But ur right. And I'm sorry to the woman and her family and I hope it wasn't taken wrong. 

[Anonymous]

FIRST LET START BY SAYING DON'T BE EMBARRASSED!!!

IF YOU DON'T WANT TO FAIL BK, YOU CAN ALWAYS STOP PAYING THE CREDIT BILLS FOR 90 DAYS THEN THE CREDIT WILL START TO WORK WITH YOU!!! MAYBE YOU CAN SETTLE  FOR CARDS FOR A LOWER PAYOFF!! 2 YEARS AGO I OWE $75,000 IN CREDIT BILLS I END UP PAYING AROUND $15,000. THE KEYS WAS I HAD TO WAIT THE 90 DAYS BEFORE ANY OTHER CREDITOR WOULD TALK TO ME!!1

[Anonymous]

I would have to agree with you on this risingscore! far to many of us "think" we are "upper middle class" and most of us have the credit card debit to show for it. Our present econimic situation is another indicator that more Americans thought they were above their true social and economic status. The first step is to take this advice and realize you are poor and work hard at getting out of debit as soon as possible. I wish you the best of luck along with everyone else in your situation.

[Anonymous]

Chasen850 Thanks for putting it much more eliquent than I did. I realised I was a little harsh and should have been a bit more delitcate in my wording. And I'm happy to see that others feel the same as me Once we all realise that we should only be using on our credit cards for what we can afford to pay off in a full months time will we all be able pull ourselves out of this mess. A credit card is a great thing. What with all the incentive cards we have out there. But we need to use our credit smarter. I am a full believer in putting everything I can on my card to rack up points. From my car insurance to my groceries. But I will not put it on there if I don't have the cash in the bank to back it up. And I can't wait till everyone realises that balance transfers are great but do not use that card before or after transferring the balance. Because as I hope everyone knows. The money we send into our credit card companies will always go towards the balance in the bucket that is collect the least amount of interest first. Once thats paid off it goes to the higher ones next. So many times I have talked to someone who doesn't understand that. 0% for 15 months is fantastic but only if my balance is also 0 and I put that card away. That being said. We also can't be "surfers" moving our money constantly to the lowest interest rate and continuously opening up new cards. The CC companies will figure it out and start to punish you by a rising interest rate. I can't tell you how many times I've spoken to someone with a 645 FICO that expects a 7% rate. NEVER going to happen. Thats where we get the 29.99%ers from. We need to as a society learn how to use our credit to  our advantage. And yes CC companies still love people who pay their bills in full every month because everytime you swipe they are still getting a piece of the pie. And for all those people not using their cards at all because they are afraid. Start using them and earn yourself a plane ticket to Europe or $500 back. Just like I said pay it off in full. And start paying for the satellite bill to gas to copays for doctors visits on your card. Just don't let your balance acure for more than 30 days. And you'll be pleasantly surprised that not only do you know have a great way to track your yearly expenses but a great way to go away and not have that vacation bill cost 20K by the time you're done paying it off. Again GOOD LUCK to everyone I'll try to be nicer in the future. 

[haulingthescoreup]

I'm so old skool on this that I even say to never do a 0% BT unless you have that amount of money in the bank, so that you can immediately pay it off if something blows up on you.

I use plastic for rewards (cash point, points, etc.) and the convenience of paying my bills just once or twice a month. (Incidentally, a century ago that's how people handled their daily expenses at the store etc. --the merchant kept an account, and the customers would come settle up periodically. The more things change, the more they stay the same!)

But I'm horribly allergic to carrying balances, because I never, ever want to be in someone else's power, including banks. I've got some high-limit cards, and if there's ever some sort of crisis beyond the ability of my savings to handle, at least I've got that for back-up. But not for Stuff.

And if I've learned nothing else in my time on these forums, it's the truth that almost all of us, including those with supposedly good medical insurance are just one or two medical disasters away from credit disaster and bankruptcy.