@barkerstv wrote:Thank you very much jeduhi. I currently do not have a months worth of income saved. This is due to DW being unemployed for over a year back in 2009-2010. Not to mention we were living out of our means anyway. Paycheck to paycheck is no fun. Then when she found a job, we had to provide after school care for our son.
We recently set up a budget (Aug. 1st) to cut the fat, so it seems like we're doing the right thing to start saving some $$. Also, we are moving to another home in September where we will be paying $300 less per month. We would like to move somewhere even cheaper, but finding an apartment with our credit scores has been almost impossible. The place we are moving into is a family friends rental.
I'm going to try sending GW letters to Barclays and Meriwest to see if they can delete my lates and/or delete the TL all together. Those are the only 2 that are paid off right now.
Rebudgeting is a great first step. And certainly stick to it! Back in my unwise credit days, I remember racking up $20k+ in bad debt, most of it with CCs. DW and I were in our very early 20s and it was no fun. I remember the stress. I remember getting phone calls and I would say something like "Mr. llecs? No, he died" or "No, he moved out after his lease expired." or something like that. I remember threatening the CAs saying that if they call one more time, I will put their bill at the bottom of my payment list. That showed them. 
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It all boils down to increasing your income and decreasing your expenses. If you did everything you can do to rebudget, and nothing else can be cut, then you'd have an income problem. But here are a few things we did to help alleviate the situation:
We decreased our expenses. Consider cutting out cable. If you have a cell phone and a home phone, then cancel one. Cancel any subscriptions to any magazines or cut out any dues you might be paying. Examine any services you are paying for and see if you can scale back. These include phone, cell phone (do we really use all of those minutes?), insurance (maybe you are overinsured), health insurance (high deductible plans are way cheaper and you can write off more on your taxes), your electricity (budget plans can save if you sign up now in the summer), and so on. Cancel any vacation plans or hobbies that drain money; you can always pick them back up later. Re-evaluate school costs/daycare costs to find a cheaper alternative in the short-term. Stop eating out. Re-evalutate your grocery budget (rice and beans isn't so bad if it means being debt free). Re-evaluate where you shop; if you aren't getting paid to purchase items that you normally buy then go somewhere else. Go line by line and ask if you really need that item.
Reconsider that tax refund. If you are getting a refund, or got one last spring, then change your W-4!!! You can adjust your tax form with your employer and ask for a fixed $ deduction vs. one or two or three or more dependents. This way, you can have more on your paycheck beginning next payday! Do the same for state if applicable. You won't get that big refund next year, but you'll have more of that on your paycheck now. If saving for IRA, 401(k) or whatever, stop that temporarily. It is better to pay off a 30% APR card than it is to save at a 10-15% growth rate on your investment (though not come lately).
Sell any assets. Make eBay and Craigslist your friend. There's junk around your house, stuff you don't want or need, that people are willing to pay cash for. You'll learn that if or when you move. Utilize that and be more organized in the process. Get rid of any fun toys (e.g. waverunners, extra car, golf clubs, etc.) and you can always buy bigger and better later. Sell any non-401(k) or non-IRA investments. If you have two or more cars, consider letting one or more go. Or trade down. Buy a short-term beater and use any asset in the cars to further reduce your debt.
For income, get a second or third job. Start your own business (that's what I did out of necessity). Ask for a raise. Not only re-evaluate your income, but re-evaluate your time and see where it could be rebudgeted. None of this is permanent if you don't want it to be. Just long enough to get them to go away and clean up your reports in the process. Take the stress off.