Drowning, considering debt management

[Starry9281]

My husband and I both lost our jobs months ago and we've been paying our credit card bills every month, sometimes at the expense of other bills (mostly because a lot of them are automatically deducted). I don't want to ruin our credit again (we were stupid when we were younger and even now, after working on it for years it's still not great) but we just can't keep putting hundreds of dollars every month towards credit cards when our electric bill needs to be paid. It's coming to a head now because there's not enough money in our account to cover the automatic charges that will be going through on the 5th. 

The only choice I see is a debt management program because we won't qualify for debt consolidation. Any suggestions, recommendations, cautionary tales? I know of things like Credit Assure that charge you $1 per every $100 in your balance and then help you in situations like this but I don't think I can enroll today and start collecting tomorrow. :-D

I just really don't want to completely trash our credit.

[Anonymous]

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@Starry9281 wrote:

My husband and I both lost our jobs months ago and we've been paying our credit card bills every month, sometimes at the expense of other bills (mostly because a lot of them are automatically deducted). I don't want to ruin our credit again (we were stupid when we were younger and even now, after working on it for years it's still not great) but we just can't keep putting hundreds of dollars every month towards credit cards when our electric bill needs to be paid. It's coming to a head now because there's not enough money in our account to cover the automatic charges that will be going through on the 5th. 

The only choice I see is a debt management program because we won't qualify for debt consolidation. Any suggestions, recommendations, cautionary tales? I know of things like Credit Assure that charge you $1 per every $100 in your balance and then help you in situations like this but I don't think I can enroll today and start collecting tomorrow. :-D

I just really don't want to completely trash our credit.

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Speaking from first hand experience on this as I was in the same boat as you. I wanted to avoid damaging my credit as well and definately did not want to declare bankruptcy. I used FDR to help negotiate all my debt. My credit went to crap instantly. They tell you not to pay on anything so the creditors are more prompt into negotiating the debt. You still get lates, COs, and collections. Almost every account I had went to collections and was charged off which killed my credit. They dont negotiate all of them at once, only a couple at a time as to build a nest in their money pool.

If I had to do it all over again, I would contact the creditors yourself and try to see if they can help you until you get on your feet. I see people on here who filed bankruptcy recently and have 100 more higher points on their FICO scores than me, who never filed.... Almost makes me wish I went that route vs the other.

[Anonymous]

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@Starry9281 wrote:

My husband and I both lost our jobs months ago and we've been paying our credit card bills every month, sometimes at the expense of other bills (mostly because a lot of them are automatically deducted). I don't want to ruin our credit again (we were stupid when we were younger and even now, after working on it for years it's still not great) but we just can't keep putting hundreds of dollars every month towards credit cards when our electric bill needs to be paid. It's coming to a head now because there's not enough money in our account to cover the automatic charges that will be going through on the 5th. 

The only choice I see is a debt management program because we won't qualify for debt consolidation. Any suggestions, recommendations, cautionary tales? I know of things like Credit Assure that charge you $1 per every $100 in your balance and then help you in situations like this but I don't think I can enroll today and start collecting tomorrow. :-D

I just really don't want to completely trash our credit.

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How much total debt are you looking at?

[Anonymous]

Contact your creditors. After the crash in 2008 many of them have programs to lower payments and suspend interest charges.

Also check you area for utilities assistance. Here in Colorado we have a program called LEAP that helps pay some of the cost during winter.

[Anonymous]

OK - I had to be the Queen of budgeting for a while - was supporting a family of 5 on less than $25K and struggling.

First off - lay out your total budget - start with the total amount brought into your house each month.

List expenses - in order of necessity - not order of credit worthiness.

Rent

Utilities

Food

Car Loans/insurance

credit card bills - list minimum payments only for this exercise.

Then see what you can cut out or reduce - don't spend any money you don't HAVE to to survive.   Honestly - look at needs vs. wants - and then still see what you can cut!  You'll be surprised.   Call your insurance agent (raise deductibles), cancel cable, reduce phone plans - anythng you can do.

Contact anyone you are past due/owe money to - Utilities/credit cards/loans/etc.    One month I suspended my car payment (cost me $40) but then I was able to take that $400 and pay off my utilities to catch up!  See who will work with you - who will let you suspend a payment - anythng can help.   My first rule was a roof and food -- after that I paid as best I could.  We layered up or stripped down because I set the heat or ac at the best we could stand it  (heat was at 65 - a/c at 80-82)  and flat out turned it off when I could.   Yes, I ended up with a collection - the cable company - but it's gone now - I did a pay for delete when we were back on our feet.   Sometimes survival is more important than the credit report.  

Contact places for help (church/salvation army/your state's department of health and human services) - I know - pride is a horrible thing - but if for even One month you can get rent/utility/food bank something - it can be a life saver.    For about 6 months my saturdays were spent standing in line at food banks - but we got by - no one went hungy and I kept the house/utilities on.   I was working 2 jobs and still had to do it.   That $25-30 worth of groceries each week (and sometimes more) gave me a couple hundred a month to pay other bills (usually rent and utilities).    

See what you can do to bring any extra cash in.  I took a crappy part time position at Walgreens at Min wage - (and I have a college degree and work at a law firm) and was able to bring in an extra $500 a month.   I sold stuff we didn't need (extra bed $50, old TV another $30) and sent that money off to the bills.  It wasn't easy - but we got by - now I am rebuilding credit - actually have some - have paid off other bills - and have an almost clean report - it takes work and patience.      

[Anonymous]

First  itemize your debt for us. Tell us each cards due date, minimum amounts and auto deductions date? Tell us the dates you get your paycheck/income/Resources

Secondly, remove all auto deductions no matter what the amounts are. I have successfully done such and still never been late.I seriously hate to request a waiver on a NSF fee charged by banks.

i always always spread the risk from one bank to another.  (between me & wife 5 checking accts). Make one account exclusively for payments to Credit cards. Have money deposited the day or two before each payment due date. Mobile Deposit credit your account the very same day check is deposited.

Work on changing due dates on Credit card accounts.  

send out requests for credit reports from SageStream/ChexSys/EW ?  to make sure nothing shows up on there. 

My situation
Myself
KOHLS : Due Date 10th Stmt Date 13th: Bal $100/$300
Cap1: Due Date 22nd Stmt Date 26 Bal : 41498/1500
Chevron Card: Due Date 7th Stmt Date 12th $489/$500
Lowe's Consumer Card: due date 17th: 25th Stmt date: $2109/$5000
Merrick Bank: Due Date 13th : stmt date 19/20th every month $300/$315 credit limit

All cards are getting just about the minimum payments until i can tell i have sufficient $$$$ and very much work to payoff balance just until the statement cuts and the reporting date (which really do vary by credit bureaus) . I aggressively use gap between due date and reporting date to bureaus to really really try with any $$$ I have the ful balance payment of last month. Once its reported with lowest balance to credit bureau it sure has a score IMPACT and allows you to charge back once statement is cut. (You dont want to charge back to that cc; however, circumstances works against you mostly). 

If i had special on BT i have successfully used this method to avoid having to pay any interest yet make the payments successfully so higher interest /Adv Fee/ cannot be accruing on my cards. Whenever, i get money i work on paying off balances. 

Quite Honestly, my total balance on CC is near $6000 and lately i have been applying for consolidation loans with little to NO success. I just so much wish i had approval for a consolidation loan with a 27-30th payment due date and no other cc to pay for the month. 

I WOULD NEVER NEVER NEVER work with a credit counseling company, no matter how dire my situation.

All things done by you are VERIFIABLE. depending on someone to do the DIRTY WORK and paying them to do it when you can do it YOURSLEf.. is ??????????(bad adjective).

@Starry9281 wrote:

My husband and I both lost our jobs months ago and we've been paying our credit card bills every month, sometimes at the expense of other bills (mostly because a lot of them are automatically deducted). I don't want to ruin our credit again (we were stupid when we were younger and even now, after working on it for years it's still not great) but we just can't keep putting hundreds of dollars every month towards credit cards when our electric bill needs to be paid. It's coming to a head now because there's not enough money in our account to cover the automatic charges that will be going through on the 5th. 

The only choice I see is a debt management program because we won't qualify for debt consolidation. Any suggestions, recommendations, cautionary tales? I know of things like Credit Assure that charge you $1 per every $100 in your balance and then help you in situations like this but I don't think I can enroll today and start collecting tomorrow. :-D

I just really don't want to completely trash our credit.

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[Starry9281]

I'm so sorry for not responding! I thought I had it set to email me when someone responded and when I didn't get any emails, I thought no one had responded! 

Our issue is that we don't have steady income. My husband started his own business and it's in the building stage. He's using skills that he's learned over the past 20 years and the business has the potential to make enough to support our whole family but it's not at that point yet. It's hard to sit down and make a budget when I don't know when the money is coming in and how much. We have been doing much better in the past two months but I know that part of that is due to the fact that my mother has paid our mortgage (which she is longer going to do) and we received a decent check from an escrow overage. 

I can't get a job because I can't afford daycare for my son and my husband can't watch him because he's gone at all hours trying to build his business. We don't know anyone in our area so getting free babysitting from someone we know isn't an option. I've been working on selling things we don't need from home so that's been helping as well. 

Another issue is that we still use these credit cards. They're not maxed out so when we need something like clothes or shoes, I can use a store credit card instead of it coming out of our bank account. We are living as much within our means as we can and not spending on extras but the only guaranteed income we have every month is a part time job my husband has to supplement his business which brings in $600. Our bills total about $2000 when we're not behind and right now, it's even more because of late fees that have added up on the utilities. We've gotten approved for food stamps which has helped but every time I try to get utility assistance, they say they don't have any left for the month and to try again next month. We owe more on our car than it's worth so it doesn't make sense to sell it to get a cheaper car, I don't think. We can't afford to do anything that isn't necessary so we've let some outside maintenance on our house go and now our HOA is charging us fees and threatening to put a lien on our house. I feel like we can't catch a break! 

[Anonymous]

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@Starry9281 wrote:

I'm so sorry for not responding! I thought I had it set to email me when someone responded and when I didn't get any emails, I thought no one had responded! 

Our issue is that we don't have steady income. My husband started his own business and it's in the building stage. He's using skills that he's learned over the past 20 years and the business has the potential to make enough to support our whole family but it's not at that point yet. It's hard to sit down and make a budget when I don't know when the money is coming in and how much. We have been doing much better in the past two months but I know that part of that is due to the fact that my mother has paid our mortgage (which she is longer going to do) and we received a decent check from an escrow overage. 

I can't get a job because I can't afford daycare for my son and my husband can't watch him because he's gone at all hours trying to build his business. We don't know anyone in our area so getting free babysitting from someone we know isn't an option. I've been working on selling things we don't need from home so that's been helping as well.  You are really going to have to find one I think.  See if you can get daycare help from the State or tell your husband he is going to have to adjust his schedule so that you can work at night while he does paperwork/contacts at home - something.   If your bills are over $2000 a month and you only have a steady check of $600 - well anyone can do that math and it isn't in your favor.   Either he or you are going to HAVE to work more hours to survive - and work the start up business into/around those hours.   If you have to work overnights stocking shelves or something and sleep when your son takes naps, whatever.   You didn't say how old your son is, but I am assuming not in school.   You may not see each other much - except to pass off your son - but you are going to have to do something.  (see if any daycares are hiring - sometimes you can get free daycare for your son while you work there). 

Another issue is that we still use these credit cards. They're not maxed out so when we need something like clothes or shoes, I can use a store credit card instead of it coming out of our bank account.  You would be better off shopping at thrift stores than using your credit cards.   Find some good ones - even now that we are on our feet we hardly ever buy new.   We are living as much within our means as we can and not spending on extras but the only guaranteed income we have every month is a part time job my husband has to supplement his business which brings in $600. Our bills total about $2000 when we're not behind and right now, it's even more because of late fees that have added up on the utilities. We've gotten approved for food stamps which has helped but every time I try to get utility assistance, they say they don't have any left for the month and to try again next month. We owe more on our car than it's worth so it doesn't make sense to sell it to get a cheaper car, I don't think.  I understand that one - we had the same issue.   We can't afford to do anything that isn't necessary so we've let some outside maintenance on our house go and now our HOA is charging us fees and threatening to put a lien on our house. I feel like we can't catch a break!  Are you better off trying to sell the house and rent something cheaper for a while?  Just a thought....

Contact a church (catholic charities is good - and you don't have to be catholic) or salvation army - not just the state to try to find additional resources.   Contact your mortgage company and see if they will work with you.   Basically - you need to find a way to bring in more money....Credit can be rebuilt - and if you work with the companies you can rebound faster than using a credit consulting company - besides - they will only consolidate your current debts - and you are running at a deficit of $1400 per month - you have to make it up somewhere.

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[Anonymous]

I worked in the IT department of a credit counseling company, one who had a 501(c)3 status, at one time. Then, I was deposed by the FTC when they were taken down for deceptive marketing practices. 

While bankruptcy court mandates you look at credit counseling, I would just avoid bankruptcy whenever posssible, since it is the "nuclear" option. Contacting your creditors can help to see what programs are available. One other option is to look at what your overall average APR is and look at using a service like Lending Club to consolidate all your cards into a lower rate, single installment payment plan. I did it and saved around $2.17/day in interest alone, not to mention my revolving credit went from 80% utilization to 0% utilization. 

If you want to look at a debt consolidation company, be cautious and do your research. You can contact the FTC for assitance in choosing a real counseling company that is a compliant 501(c)3 organization. Why is this important? Well, in having a lot of intimate knowledge of the process, they'll work with the creditors, and when I say "work" there is usually a guideline setup to working with non-profit debt management companies.

Back in 2006, for example, American Express would drop the interest rate to 0% and after 90 days "re-age" the account and, amazingly, remove all instances of late payments dating back 90-days to present. I forgot the other creditor, but there was one in particular that would remove all negative information but their agreed upon interest rate was low, 0.5%. This can work for those who really need it, but be aware, almost all creditors will close your account upon entering debt management.