topic Re: Potential Financial Disaster in Personal Finance

Potential Financial Disaster

jazzyvar84 — Tue, 06 Dec 2022 03:20:31 GMT

Hello all,

I haven't posted in a while, but I have worked so hard to get my credit score to where it is (all 700s). I have maintained this for about four years; however, I moved to Miami last year, which is way more expensive than I could've fathomed. My pay on my job (teacher) has significantly been reduced, as I am no longer teaching an extra class that I taught before because the population at the school has decreased. I added an $810.00 car payment that was okay last year, but now I'm drowning. Also, I found a note on my apartment door informing me that my rent is going up $300 in 90 days, which is my renewal date. All apartments around here seem to be in the same cost range. My credit card debt is very high right now, all with Navy Federal ($47,000). My check no longer covers my bill's. Does anyone have any tips on what I could do to salvage my credit without losing everything? Any help is appreciated; I'm kind of terrified right now. Please don't scold; I just desperately need some advice.

Re: Potential Financial Disaster

SouthJamaica — Tue, 06 Dec 2022 04:01:32 GMT

From what you've told us the only thing i can think of is to sell the car

Re: Potential Financial Disaster

Cowboys4Life — Tue, 06 Dec 2022 04:03:10 GMT

Unfortunately since 2020 Florida has become the most expensive state to relocate to. The only suggestions I have are:

see if you can get rid of that new car and get something older and reliable that will do the job and not cost near as much in maintenance, gas, and insurance. An $810 car payment is way too high.
See if you can avoid renewing and relocate with a roommate or take one on if there is space for it where you are now.
Can you cut cable, internet, and decrease cell phone bill(s)?
Part time work tutoring or in any other field just to bring in some extra money in the short term

I have been there and it sucks. I had a horse at the time and the stable fees, farrier, vet etc. were getting to be too much but you just can't walk away from a horse. I made a deal with the trainer to take care of the barn 4 afternoons a week feeding, watering and turning out in exchange for my board. Dumped cable and internet and got a burner cell phone. It isn't easy but in the end was worth it because when I finally rebounded I hadn't lost anything but a bit of pride.

Re: Potential Financial Disaster

QuarterB35 — Tue, 06 Dec 2022 04:57:28 GMT

@jazzyvar84 wrote:
Hello all,

I haven't posted in a while, but I have worked so hard to get my credit score to where it is (all 700s). I have maintained this for about four years; however, I moved to Miami last year, which is way more expensive than I could've fathomed. My pay on my job (teacher) has significantly been reduced, as I am no longer teaching an extra class that I taught before because the population at the school has decreased. I added an $810.00 car payment that was okay last year, but now I'm drowning. Also, I found a note on my apartment door informing me that my rent is going up $300 in 90 days, which is my renewal date. All apartments around here seem to be in the same cost range. My credit card debt is very high right now, all with Navy Federal ($47,000). My check no longer covers my bill's. Does anyone have any tips on what I could do to salvage my credit without losing everything? Any help is appreciated; I'm kind of terrified right now. Please don't scold; I just desperately need some advice.

Lot's of love on the way.

Re: Potential Financial Disaster

Aeon — Tue, 06 Dec 2022 10:34:38 GMT

In 2008-2009, I went through two back to back layoffs, then was diagnosed with health issues while unemployed. I thought I could make it on the savings and small serverance I received from one job, but my med expenses burned through my savings. I had too much pride to ask for help/guidance from loved ones and far too quickly than I had hoped, I had to choose between paying for meds and health ins or paying my CC bills. I didn't owe much on my CCs, but when you're broke, you're broke. Before I would have been evicted, I was able to negotiate to terminate my lease early and I worked PT at a grocery store to keep up with my car note and pay a good friend a few hundred dollars to stay with them until I got a better paying job.

If I were in your situation today, I would focus on the four big rocks first:

1. Reduce/eliminate your car payment ASAP.
2. Reduce your housing expenses. Can you take on a roommate? What is your break lease fee?
3. Increase your income. New job, tutoring, gig work until summer school?, Starbucks, etc. Network, network, network. I would ask everyone I know about job opportunities they can send your way; get in contact with recruiters as well.
4. Debt consilidation loan and/or bankruptcy consultation. Do not rule out bankruptcy as an option prematurely.

Life absolutely sucks hard at times and I'm sorry you are going through this. Now isn't the time for stubborn, foolish pride or digging your head in the sand in despair. You're going to have to make some uncomfortable, difficult decisions...but remember this is temporary and one day you'll be on the other side of this.

Re: Potential Financial Disaster

acreditdummy123 — Tue, 06 Dec 2022 10:34:35 GMT

possibly even look at a different profession. Teachers don't get paid what they deserve but that doesnt mean you cant change your destiny

Re: Potential Financial Disaster

jazzyvar84 — Tue, 06 Dec 2022 14:19:59 GMT

I've only made one year worth of payments. Would I be able to sell it? Still owe $43,000.

Thank you for responding.

Re: Potential Financial Disaster

jazzyvar84 — Tue, 06 Dec 2022 19:02:37 GMT

@Cowboys4Life wrote:
Unfortunately since 2020 Florida has become the most expensive state to relocate to. The only suggestions I have are:

see if you can get rid of that new car and get something older and reliable that will do the job and not cost near as much in maintenance, gas, and insurance. An $810 car payment is way too high.
See if you can avoid renewing and relocate with a roommate or take one on if there is space for it where you are now.
Can you cut cable, internet, and decrease cell phone bill(s)?
Part time work tutoring or in any other field just to bring in some extra money in the short term
I have been there and it sucks. I had a horse at the time and the stable fees, farrier, vet etc. were getting to be too much but you just can't walk away from a horse. I made a deal with the trainer to take care of the barn 4 afternoons a week feeding, watering and turning out in exchange for my board. Dumped cable and internet and got a burner cell phone. It isn't easy but in the end was worth it because when I finally rebounded I hadn't lost anything but a bit of pride.

Thank you! I don't feel comfortable doing a roommate because I'm here alone and don't know anyone. Can I sell the truck, while still owing so much on it?

Re: Potential Financial Disaster

OmarR — Tue, 06 Dec 2022 16:17:10 GMT

What I would do, if it were me, and WITHOUT judgement:

1. Leave Miami. You don't know anyone, you are alone, and you've only been there a year. I would pick somewhere a lot cheaper to live.

2. Sell the car. Even at a loss. Buy a really cheap, used car.

3. Increase income (2nd job, tutoring, etc).

4. Throw EVERYTHING I can at the $47,000 credit card bill. No vacations, No going out to eat, no cable, etc.

Just my opinion.

Re: Potential Financial Disaster

blossom_rebuilding — Tue, 06 Dec 2022 18:27:03 GMT

No judgment here at all. Life happens. Others have already commented on the big ticket spend being your car, but I also think you may be able to find a roommate or basement apartment or something on Craiglist or other site that can also save on housing costs, if relocating isn't an immediate possibility.

As for picking up a second job, timing might actually be good; it's the holiday season and in my area at least in Maryland, there are still lots of retailers looking for seasonal help; maybe that's the case in Florida too? Maybe you can find a weekend/evening sidehustle for the next month or so to get some extra cash in the near term.

I wish you all the best of luck as you work on your finances. Getting started is hard but I applaud you for being honest with yourself and committed to making changes.

Re: Potential Financial Disaster

jazzyvar84 — Tue, 06 Dec 2022 19:04:01 GMT

Thank you!!!

Re: Potential Financial Disaster

QuarterB35 — Wed, 07 Dec 2022 01:13:40 GMT

@jazzyvar84 wrote:
Thank you!!!

Your most welcome

Re: Potential Financial Disaster

USMC_Winger — Wed, 07 Dec 2022 18:43:29 GMT

@jazzyvar84 wrote:
Hello all,

I haven't posted in a while, but I have worked so hard to get my credit score to where it is (all 700s). I have maintained this for about four years; however, I moved to Miami last year, which is way more expensive than I could've fathomed. My pay on my job (teacher) has significantly been reduced, as I am no longer teaching an extra class that I taught before because the population at the school has decreased. I added an $810.00 car payment that was okay last year, but now I'm drowning. Also, I found a note on my apartment door informing me that my rent is going up $300 in 90 days, which is my renewal date. All apartments around here seem to be in the same cost range. My credit card debt is very high right now, all with Navy Federal ($47,000). My check no longer covers my bill's. Does anyone have any tips on what I could do to salvage my credit without losing everything? Any help is appreciated; I'm kind of terrified right now. Please don't scold; I just desperately need some advice.

@jazzyvar84: Sorry to hear of your dilemma. Perhaps I can give you some helpful advice. I had the great misfortune of living in Homestead, Florida, in September of 2017 when a Category 5 hurricane, Irma, smashed through Florida, and I found myself homeless and unemployed and had to evacuate to Miami. At the time, Miami had the dubious honor of being the US metropolitan area with the highest average cost of housing compared to the average local salaries. I can't imagine it's gotten any better. I moved 12 times in 17 months and worked multiple jobs, but I finally escaped Miami.

Normally, I'd advise getting rid of the vehicle and its loan payment and replacing it with a much cheaper alternative. However, you mentioned that it's a truck. Does it have a trailer hitch, brake controller, and a 7-pin plug for controlling the trailer's brake lights? What's the truck's towing capacity? Can you drive your truck with a trailer? If not, are you willing to learn?

Do you speak Spanish or Hebrew? 70% of Miami's residents are foreign-born, so working side-hustles in Miami is much easier to navigate when you speak their native tongues.

You mentioned Navy Fed. Are you a military veteran?

Re: Potential Financial Disaster

Aim_High — Mon, 12 Dec 2022 22:01:26 GMT

@jazzyvar84 wrote:
@Cowboys4Life wrote:
see if you can get rid of that new car and get something older and reliable that will do the job and not cost near as much in maintenance, gas, and insurance. An $810 car payment is way too high.
Thank you! I don't feel comfortable doing a roommate because I'm here alone and don't know anyone. Can I sell the truck, while still owing so much on it?

You're getting some good advice and encouragement, @jazzyvar84. So sorry to hear of your situation but you can work your way through this, one piece of it at a time. Hang in there.

The truck situation is tricky. @USMC_Winger had a good suggestion to put it to work for you, if that is a possibility. If not, I agree that $810 car payment needs to go away.

Yes you may be able to sell the truck. Depending on how much money you put down, the price you paid, and the current value of the truck, you may be "upside down" after only one year where you owe more than it's worth today. Do some research on the web and take it to several car dealerships. You can get offers to buy it from Car Max or Carvana among others. Compare the offers to what you owe and see if it is feasible. If you can't pay off the loan with either the sales price or combined with cash on hand, your current lender won't release the lien on your title to transfer ownership.

Depending on the terms of your loan, you could try to refinance with a different lender to lower your payments. This could be done by lowering the APR (although that would be challenging in this rate environment) or extending the repayments by another year or two.

If you cannot sell the truck, voluntary surrender back to the lender (in lieu of repossession) is possible but it can also adversely affect your credit. However, it would look better than having a repossession and would relieve you of the burden of the monthly payments. The lender would sell the truck and you would be responsible for the difference in value unless the lender agreed to forgive the shortage. If you're unable to pay, they could file for collections of the difference. But if you work with them, they might allow you to set up a payment plan. The surrender and/or collections will be indicated on your credit report and could affect your scores for up to seven years. So this is a consideration but would be a last resort other than not paying until the lender repossesses the truck. Repossession would likely entail other charges for the repo and storage costs.

The first step is to get the value versus the payoff amount of the loan. If you have more value than you owe, I would sell it and find a more economical ride.

Re: Potential Financial Disaster

jazzyvar84 — Thu, 08 Dec 2022 22:43:26 GMT

Hello. I'm willing to learn Spanish, but I honestly don't have any understanding as to the exacts of the truck. I also have a 2013 Kia Optima that's paid for, but it was very uncomfortable for me. I'm very tall. I may sell it, but I don't know if it has any value. Thanks so much for Your advice. This is so scary.

Re: Potential Financial Disaster

Aim_High — Fri, 09 Dec 2022 07:55:00 GMT

@jazzyvar84 wrote:
Hello. I'm willing to learn Spanish, but I honestly don't have any understanding as to the exacts of the truck. I also have a 2013 Kia Optima that's paid for, but it was very uncomfortable for me. I'm very tall. I may sell it, but I don't know if it has any value. Thanks so much for Your advice. This is so scary.

Glad to help @jazzyvar84. I've had a few other thoughts that might help.

First, you need to free up cash flow but you probably also need something to drive. But something reliable that costs less than $810 a month will work. That could include a nicer late-model used car. I've never done it this way but I'm pretty sure if you go into a dealership "upside down" on your loan, they will pay it off for you and roll the additional debt back into a new loan. But ... if you trade down from, say, a 2022 new pickup truck to a low mileage used 2017 SUV or sedan, you'd probably be able to lower your overall payment even with that pay-off debt.

Now let's add another element. I don't know all the details for your Kia but using rough average condition and mileage, I come up with somewhere around $5,000 to $7,500 trade-in value. Better or worse for condition and mileage. If it turns out you are "upside down" on the truck loan, the Kia might be enough to help you out. And you could probably trade in both the truck *AND* the Kia to the same dealership on a vehicle you can afford the payments.

Again, I've just been trying to help you deal with one element: the truck. I'm just trying to lay out options for you that won't harm your credit like a repossession. It's still important to address the other factors including income, housing payments, and debt payments.

Re: Potential Financial Disaster

Aim_High — Sun, 11 Dec 2022 22:43:13 GMT

From the CarMax website:

What if I owe more on my car than the amount of your offer?

If your payoff amount is more than the offer for your car, the difference is called "negative equity." In some cases, the negative equity can be included in your financing when you buy a CarMax car. If not, we'll calculate the difference between your pay-off and our offer to you and you can pay CarMax directly. If the amount you owe is less than $250, we will accept a personal check. CarMax stores accept cashier's checks, certified checks, certified funds, cash, and debit cards. CarMax Car Buying Centers (locations that only buy cars) can accept cashier's checks, certified checks, and certified funds. Our written offers are good for seven days, giving you time to get any necessary funds to settle your transaction.

Re: Potential Financial Disaster

USMC_Winger — Sat, 10 Dec 2022 00:19:44 GMT

@jazzyvar84 wrote:
Hello. I'm willing to learn Spanish, but I honestly don't have any understanding as to the exacts of the truck. I also have a 2013 Kia Optima that's paid for, but it was very uncomfortable for me. I'm very tall. I may sell it, but I don't know if it has any value. Thanks so much for Your advice. This is so scary.

@jazzyvar84: Learning to be fluent in Spanish is a very handy skill to have in Miami. You won't regret it.

According to Edmunds, a 2013 Kia Optima is worth $5,136 to $10,134, depending upon the trim, condition, and mileage, so you've got some value there. You'll get more money selling a used car to a private party than you will selling to a dealership, but it will take more time to sell it.

If you bring your truck to a U-Haul rental facility, they can examine your truck for free and tell you whether or not it already has the tow package. If it doesn't, they'll tell you exactly what equipment your truck needs to tow one of their utility trailers and how much it will cost to install the equipment. But honestly, unless it's only missing a $25 trailer hitch mount with 2-inch ball (which you can buy on Amazon for cheaper than U-Haul will sell it to you), I wouldn't pay to upgrade your truck if it doesn't already have the complete tow package. I'd just sell the truck and the Kia Optima and replace them with a cheap, reliable vehicle, preferably one that I didn't have to make monthly payments on.

If you have a truck with a 4,000 to 6,000 lbs. towing capacity that can tow a utility trailer (rent a trailer from U-haul or buy a used one on Craigslist), then you can put an ad on Craigslist that you're available to haul sod, wood, or debris. When someone hires you, get them to pay you in cash first before they load your trailer. If they expect you to do all the loading and unloading, feel free to tell them you're just the driver and have a bad back. If they don't pay the cash up front when you get there, and you've already rented the trailer for the day, then just leave. You can go hang out at a nearby Home Depot or Lowe's parking lot and offer to deliver customers' wood, appliances, or whatever they bought inside the store that won't fit into their vehicles to earn some money. Charge at least $50 per trip.

Next, call a bunch of real estate agents in your area. (Their phone numbers are online and in the phone book.) Ask the real estate agents if they need a clean-up crew to clean up and haul to the dump any furniture, appliances, and trash the evicted tenants left behind in the homes the agents sell. You work as an independent contractor for the real estate agent or agency, and you can earn anywhere from $400 to $1,500 or more for each home you clean, depending upon how desperate they are, how big the job is, and how quickly they need it done. (Warning! Some of those houses are really nasty! You may want to wear coveralls and a spare pair of boots that you change out of before you get inside your truck to drive away.)

You need all the cleaning gear a housekeeper would have, several big trash cans to hold the trash (sometimes you can get by with just large trash bags, but don't count on it), a dolly for moving heavy items, plus tie-downs to secure the trash cans and any furniture and appliances in the trailer when you leave the house to drive to the dump. If the furniture or appliances are in good condition, you could probably sell them on Craigslist and earn some additional money. You'll have to come up with the dump fee and the trailer rental fee if you rent a utility trailer, even before you get paid by the real estate agent or agency.

Set yourself up with multiple real estate agents so you get consistent clean-up work each month. For small jobs, you can probably do the clean-up and the trash hauling yourself. The bigger jobs will need a crew of two to four people. If you don't have friends willing and able to help you, then please let me know. I'll tell you where to hire a small, reliable, motivated clean-up crew in Miami as independent contractors.

If you love dogs, then you can go to the luxury condos in Miami, Miami Beach, Surfside, Aventura, and Hallandale Beach, and you'll see people walking their dogs in the early evenings on weekdays or on weekends. Offer to walk their dogs every day after school for a fee (or M-W-F or whatever your schedule allows). Make sure any prospective client knows you're a school teacher and what subjects you teach. First, it tells them why your schedule is constrained to "after school." Second, it tells them you're trustworthy enough to teach kids all day, so you're trustworthy enough to handle their beloved pets. Third, it tells them you may be open to after school, evening, or weekend tutoring for their own children or their friends' children.

Focus your dog walking on luxury condos, because luxury condo owners and renters are willing to pay more than normal condo dwellers to someone who will pamper their pets while they're at work all day. Also, luxury condos in the Miami area have security, so when you get hired, ask how to get through security to come get their dogs and return the dogs to their homes after their walks.

Try to walk the dogs as a group, not separately, so you earn your money in fewer trips to each building, and the dogs get to socialize. You'll need several dog leashes, dog treats, a few stackable water bowls, a bottle or two of tap water, a pooper scooper, baby wipes (for accidents), and doggy do-do bags. Wear a T-shirt that says, "Let Jazzy walk your dogs! Call 305-XXX-XXXX" with your own phone number to advertise your business as you walk the pups.

Also, cut your expenses to the bare minimum. Either find roommates to share expenses or downsize and just rent a bedroom, bathroom, and parking space from someone else. You'll be better off with the former rather than the latter, because you'll always get the short end of the stick when you rent in someone else's household.

Re: Potential Financial Disaster

Jeffster1 — Mon, 12 Dec 2022 03:23:21 GMT

I'm still recovering from reading about the $850 a month car payment. As others have said, you gotta get rid of that.

Best of luck to you in climbing out of this.

Re: Potential Financial Disaster

rosco75 — Mon, 12 Dec 2022 17:42:22 GMT

As a native to south florida, I can tell you the 1st step is to leave Miami and move to the suburbs. Try more north-northwest in hialeah/miramar/pemboke pines area. trust me the 20-30 min commute beats the cost of living in miami. Next I would, as others have suggested, get out of that high car payment asap. I'd also look into doing uber / lyft / grubhub with your kia, not the truck. At the airport as an uber driver you can make great additional income in your downtime, and could even do shopper apps as well.

download a budgeting app, like Mint, or something simular so that you can create a budget and track your spedning. try to cut out any fluff thats not needed and attempt to live on a strict budget the next 6 months or so. It gets easier as it goes - pay down your CC debt with the higher intrest cards first, or if you have any 0% cards you can BT to, do that and keep paying off the high interest ones.