Sink or swim?

[Anonymous]

Hi everyone.  I lost my job about 6 months ago but have managed to keep my credit card debt really low.  I have a home and 3 cars  (husbands, mine, sons).  As it looks now, the unemployment picture does not appear to be improving and I'm running out of the savings I had that has gotten us through until now....

So.. I need some advice:

My current scores are in the mid 700's with 1% utilization..

Do I start living off the credit cards, rack up debt... (and will doing so make them cut all my limits??) Right now I have about 100k technically available...but I don't know how I'd ever pay anything like that back... I worked hard to get those limits so I would have them in an emergency (see tag line!) - but now that I'm on the brink of it... I don't know what to do!

We've already cut every expense other than the house and cars I can think of.....and we're still down by about $1200/mo.

The only problem with selling though is it looks like we're upside-down on just about everything.... so would we end up owing money we don't have anyway? Is there a way to 'walk away' without it killing my credit? 

Advice appreciated!

Thanks,

Sovi

[Chopbrocoli]

One thing I never recommend is using the CC's if I there is no income. I have heard too many horror stories where people lose their jobs and rely on credit cards to help them out short term, but in the long run they still cannot find a job, max out their cards, are sent to collections, and trash their credit. By any chance do you have any family that might be able to help you out temporary? Is their any expenses you think you might be able to cut? If you PM me with your email address, I would be happy to send you an excel spreadsheet that calculates your family budget, disposable income, and debt. I wish I could help further and hope things get better for you and your family soon.

[Anonymous]

Thanks for your suggestions Chop.  I actually have a pretty good handle on the budget (use Excel a LOT), and I'd like to leave family for a true emergency... don't know if this really counts... it's more a 'I don't want to go down that road' kind of thing and want to keep a good credit /good credit'.  If I were truly drowning, I'd have less qualms about asking them.. but frankly I wouldn't even know how much to ask for...I mean, I know my monthly nut to crack, but I don't know how long I need help to meet it. 

What's sad is I did everything I was supposed to... put money away.... cut out expenses, etc....  but six months later the clock has just about run out.  I'm just really hopeful that I'll qualify for the federal extended benefits, because it's really only the unemployment plus the savings that has kept me from going into deep CC debt these past months.

I'm just wondering if I can get away with not 'trashing' something:  My credit, or my debt load....and if I can't.. which is the lesser of evils?? 

Sovi

[Chopbrocoli]

I guess what you can do (if absolutely needed) is use the cards, but only up to a 20% utilization on each card. Once you hit that point, sock drawer you cards. Be sure to use the cards with low APR of course. Although you might get a small ding for having too many accounts with balances, family does come first and you can recover those points in no time by continuing to pay in a timely manner and paying down the balance. Also, don't forget to miss any payments otherwise you might trigger the universal default (if it exist on any of your accounts).

[Scamp]

I hear you on not wanting to 'go there', Soviyana, and sorry to hear you're going through this.

FWIW, when I was in a similar situation several years ago, I decided to just get whatever job I could to start bringing in SOME money (I didn't do unemployment, though, so if you have, I'm not sure about how that works or whether you CAN do a part-time job to get some money in without giving up those benes).  Waitressing, bussing tables, working at a local convenience store, etc., more or less kept a roof over my head and food on the table.

I didn't have kids or anything, so it was easier for me to work slightly odd hours like 6 a.m. - 2 p.m., which may not be possible for you, but grabbing some kind of low-wage part-time (or full time, if you can swing it) job just to get even a fraction of your income coming back in might keep you from dipping into the cc's a while longer.

You might also want to nose around on the Smorgasboard for the threads about an online tutoring thing that might work well if you have a degree, as well as for threads about work-at-home jobs - something like that might also be a lifeline to squeak you through until you regain full employment in your field.

Hope this helps, and good luck!