topic Re: Help!! Need advice......what I should do!! in General Credit Topics

Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 11:06:19 GMT

I am a 38 yr old single mother of 2 living in NY. I live in a 2 bedroom apt that costs me $1547.00 a month without utilities. I have about $15,000 in credit card debt. I have a car payment of $506.00 per month ( I have 1 year left - payment is high due to old car loan on top of the new loan due to divorce) I tried to trade it down but was told I would be in the negative again and I would be better off by waiting until the lease ends. I bring home about $800.00 biweekly and my child support payments are about $482.00 biweekly. I am having such a hard time making ends meet. My son who is a freshman in high school will be going to college in about 3/4 years and scared to death about not being able to afford his college. I do have a 401K that only has about $17,000 and already has 2 loans against it which will be paid off in 2009.

My question is.....I was thinking of claiming bankruptcy. I claimed bankruptcy once before due to my divorce. It just got removed from my credit file - it was on there for 10 years. My fico score is about 653 now. My hightest credit card debt is about $8,0000 with a 25% interest rate. I really do not want to claim bankruptcy but I may have no choice. I am only making min month payments plus about an extra $5.00 bucks on these cards and I am not getting anywhere. I tried calling the credit card companys to lower my interest rate but they tell me no. My fico score is the highest its ever been....so I am having a hard time with deciding what to do. My children see me struggling and that really bothers me.

Does anyone have any advice? Do I claim bankruptcy or not? Does anyone have any suggestions on what I should do? Any advice is greatly appreciated. Thank you.

Re: Help!! Need advice......what I should do!!

Tuscani — Tue, 01 May 2007 11:19:54 GMT

bellarosa717 wrote:
I am a 38 yr old single mother of 2 living in NY. I live in a 2 bedroom apt that costs me $1547.00 a month without utilities. I have about $15,000 in credit card debt. I have a car payment of $506.00 per month ( I have 1 year left - payment is high due to old car loan on top of the new loan due to divorce) I tried to trade it down but was told I would be in the negative again and I would be better off by waiting until the lease ends. I bring home about $800.00 biweekly and my child support payments are about $482.00 biweekly. I am having such a hard time making ends meet. My son who is a freshman in high school will be going to college in about 3/4 years and scared to death about not being able to afford his college. I do have a 401K that only has about $17,000 and already has 2 loans against it which will be paid off in 2009.

My question is.....I was thinking of claiming bankruptcy. I claimed bankruptcy once before due to my divorce. It just got removed from my credit file - it was on there for 10 years. My fico score is about 653 now. My hightest credit card debt is about $8,0000 with a 25% interest rate. I really do not want to claim bankruptcy but I may have no choice. I am only making min month payments plus about an extra $5.00 bucks on these cards and I am not getting anywhere. I tried calling the credit card companys to lower my interest rate but they tell me no. My fico score is the highest its ever been....so I am having a hard time with deciding what to do. My children see me struggling and that really bothers me.

Does anyone have any advice? Do I claim bankruptcy or not? Does anyone have any suggestions on what I should do? Any advice is greatly appreciated. Thank you.

Welcome! I am sorry for your hardship. Unfortuneately, your situation is quite common. I would avoid BK at all cost. I assume you gave the CCC detailed info about the situation you are in? Have you tried escalating your request to upper managment? Have you considered doing a BT to a new 0% intro card? Is 653 your EQ score? What are your other two scores?

As far as the auto goes.. What kind of vehicle? Mileage? Anthing wrong with it? Can you sell it for what you owe? What is the current rate? And do you have exactly 12 payments remaining?

Other thoughts.. I would assume you are already living frugal.. but is there ANYTHING you can cut out to save expenses? Is finding a higher paying job, or moving to a cheaper place an option?

Re: Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 14:10:34 GMT

If it's any help a lot of people are in your position... don't feel alone. I see that you have an income problem not a debt problem and BK won't solve that. But first....I'm not sure what part of NY you live in but your rent does seem high, try to look for a lower cost place to live. Always remember that your home should be your highest priority and if you're warm and safe you can battle the rest of this. Next is keeping the lights on, food and clothing. Consumer debt is way down the list of priorities despite what they tell you.

As you're making payments against your credit cards I doubt they will change a thing.. strange I know but the only thing they'll listen to is if you stop paying them. Of course it will ding your credit but right now.. so what? Sadly you'll probably have to play hard ball with them and get nasty.. it's a shame but it appears that this is all they understand. BTW - I assume you've cut up those cards and are not using them - right!? You could try a balance transfer onto a 0% offer. Bank of America have some good offers right now and they are faily easy to get. I would try this before talking to the CC guys again. Just please be careful and read the fine print.. Also, sub-prime lenders (e.g Orchard) are out there but it's such an expensive way to go you maybe in no better position.

As for the car, as it's a lease I'm not sure what you can do other than explain your position to the company, telling them that this is what you can afford.. they either take it or you hand the car back. Again, you'll have to be tough with them.

Regardless of what I wrote above somehow you've got to get that income up. Roughly you earn $30-$35K a year and that is not an easy wage regardless of what your debt load is.

BTW - Your could have your child start to save now for college. Have him/her mown lawns, work at a fast food place etc... with some effort on their part they will learn two things... life ain't free and debt isn't fun... and that will see them in better stead than any degree.

Also, don't touch that 401K.. doing that now could cost you $100K's when you retire.

Good luck... get that income up, get a cheaper appt. and you'll be fine.

Message Edited by htc on 05-01-2007 07:09 AM

Message Edited by htc on 05-01-2007 07:10 AM

Re: Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 13:25:22 GMT

Yes, you are not alone, not by a long shot. Though I was not as deep in debt as your current situation I was in contrast to my salary really struggling and having to deal with debt collectors etc.

I used this book Dave Ramsey's Total Money Makeover. http://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/0785263268. You can get it at any bookstore. It's hard progam he devises up but it works and it works well, and it did help me alot and though I am not out of the woods yet I can see the end sight is near. I think you should give it a shot, it cost about $25 new but you can get some used ones for like $10.

BK really should be your absolute last resort especially since you are coming out of one.

As far as your child going to college. Many programs, special scholarships, Grants and different types of student loans to choose from. Your son's guidence counsler would be a good place start and their is a multitude of sources on the internet to research financial aid. State schools are always a good option and this is no shame going to a community college for the first two years either.

I hope this helps

Re: Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 13:40:34 GMT

I want to also endorse Dave Ramsey (www.daveramsey.com)... He changed my way of thinking and I just wish I had listened to the man 15 years ago. I'd be a millionaire by now rather than paying for all those glossy downtown sky scrapers with marble lobbys the banks have... still better late than never!

And before anyone says "it's OK for him he's a multi-millionaire" Dave Ramsey was broke and BK TWICE... Interestingly enough he doesn't have a FICO score but could buy a Rolls Royce with cash. How many people here, so concerned about getting over 700FICO could say the same thing.

Message Edited by htc on 05-01-2007 06:37 AM

Message Edited by htc on 05-01-2007 06:40 AM

Re: Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 13:50:46 GMT

Sorry you're in such a bad place. I know how frustrating it can be and it must be stressing you out.

I am curious how you managed to get yourself back in debt after your first bankruptcy. You make a good living and bring in decent child support so how are you in this position again? Did you learn anything from your first bankruptcy?

A $15,000 credit card debt is easy to resolve. Stick it out til your car lease is up and then use that $500 a month to pay down your debts. I also live in a high rent area and know that $1500 a month isn't outrageous for a 2 bedroom apartment. I wouldn't recommend moving unless you can find a job with the same salary in a more affordable community.

I hate to break it to you but there's no way you'll be able to pay for your child's college education. Lots of kids have to make it on their own. I have $50,000 in student loans myself because my parents couldn't afford it. And I am only able to put a little bit aside for my two kids. You are going to need that 401k money for your retirement. Do not sacrifice it on your child. Your son will be fine.

Re: Help!! Need advice......what I should do!!

Anonymous — Tue, 01 May 2007 15:52:38 GMT

Check out http://www.savingadvice.com for more information and forums about budgeting and saving money. Nice community. Good luck!

Re: Help!! Need advice......what I should do!!

smallfry — Tue, 01 May 2007 20:42:50 GMT

Sorry to hear of your problems. I think you might make too much to receive much in the way of money for college but it is worth checking out. Sorry to say this but the kids need to learn to gear down and go to a college that the parents can afford or take out student loans. Sounds harsh but that is the way it is. $500 gross pay per week? I don't know what you do and it is easy to say from where I sit but perhaps you might consider moving across the river to find a cheaper living situation. Jobs are tight too but you might not need to live in NY.

Re: Help!! Need advice......what I should do!!

Anonymous — Wed, 02 May 2007 00:50:14 GMT

Thanks for responding.....I have cut every expense I can think of. I cut my cable down to the min.....basic cable $12.50 month. I use my cell....I have the cheapest plan possible. I do all my online stuff and phone calls at work....thank god my boss lets me do that when my work is not too busy. My electric and water bill is great...very affordable...$45.00 month. Moving is definately not an option for me. I have moved around so many times with my kids that they are finally happy with the apt we live in....plus cannot move out of school district. I live in an apt complex...yes the rent is high but I have so many pro's than con's. I have cut up my credit cards!! I am not a compulsive buyer or anything like that. My credit card debt consists of things I needed not things I wanted or just because. I have 2004 trailblazer that I lease..which is up in august 2008. I got it in 2004 and only have 24,0000 miles on it. I don't even drive it that much....I work 3 miles away from home. I had a convertible that I had to trade because of my divorce.....had to take his name off the loan. I can't sell it....technically I have about $7500.00 left.

With everyones advice.....( by the way thank you all for it ) I am definately not going to claim bankruptcy. I am going to stick it out until my truck is paid for in full.....I will not take out another car loan. I will be getting a car out right that will cost me nothing. Once my truck is paid for - that will free up another $500.00 and can put more towards my cc bills.

I am doing everything possible to pay off my debt. I am do for a raise so hopefully that will help.

Re: Help!! Need advice......what I should do!!

Anonymous — Wed, 02 May 2007 14:59:07 GMT

I think you're making the right decision. Things will get easier once the lease is up. It's just going to be a long hard year and a half.

Kudos to you for all your hard work.

Re: Help!! Need advice......what I should do!!

Neblett — Wed, 02 May 2007 15:36:09 GMT

This is not meant to be critical, so please do not interpret my incredulous tone as an accusation...

My biggest question - why are you LEASING a vehicle? The absolute MOST expensive way to "own" a vehicle.

Also, why do you need a Trailblazer in the city? You must pay hundreds each month to park/store it.

Re: Help!! Need advice......what I should do!!

Anonymous — Thu, 03 May 2007 11:00:30 GMT

I have what is called a "smart buy" on my trailblazer. I have it for 4 years and then hand in the keys at the end of the term. I walk away without oweing anything else. Its exactly like a lease but better terms. I don't live in the city...I live on Long Island, NY. I live in a Garden Apartment.

Some other people I spoke with says the same thing. Just keep doing what I am doing and NEVER EVER claim bankruptcy. I did it once before and I hated it. For what I pay in rent, utlities and my cc bills, I could be owning a home and get $$ back. I am just throwing money out the window by renting. Unfortunately, I consolided my cc bills about 2 years ago - only $7,000 in cc bills then.... Now I have about double!!! I was in a situation that money wasn't coming in and had to live off credt cards for a while. But since then, I cut them up with the exception of one...9% interest rate with only a $500.00 credit limit for emergancy only.

Since I have been on this forum....I have been sleeping better!! I guess it allowed me to voice my problem and getting some feedback.

Thanks Again!!

Re: Help!! Need advice......what I should do!!

Anonymous — Thu, 03 May 2007 11:03:36 GMT

Thank you!!

Re: Help!! Need advice......what I should do!!

Neblett — Thu, 03 May 2007 14:36:22 GMT

Sounds like the frustration you have about renting your abode should also go towards the "renting a car" situation. How is it a "smart buy" when it's not even yours to keep when you finish paying? Throwing money out the window there, too.

bellarosa717 wrote:
I have what is called a "smart buy" on my trailblazer. I have it for 4 years and then hand in the keys at the end of the term. I walk away without oweing anything else. Its exactly like a lease but better terms. I don't live in the city...I live on Long Island, NY. I live in a Garden Apartment.

Some other people I spoke with says the same thing. Just keep doing what I am doing and NEVER EVER claim bankruptcy. I did it once before and I hated it. For what I pay in rent, utlities and my cc bills, I could be owning a home and get $$ back. I am just throwing money out the window by renting. Unfortunately, I consolided my cc bills about 2 years ago - only $7,000 in cc bills then.... Now I have about double!!! I was in a situation that money wasn't coming in and had to live off credt cards for a while. But since then, I cut them up with the exception of one...9% interest rate with only a $500.00 credit limit for emergancy only.

Since I have been on this forum....I have been sleeping better!! I guess it allowed me to voice my problem and getting some feedback.

Thanks Again!!

Re: Help!! Need advice......what I should do!!

Anonymous — Sat, 05 May 2007 01:54:50 GMT

When I was going through my divorce, I had to get rid of a car because he had his name on the loan. My credit was already bad due to the divorce.....chevy had this "smart buy" program that I was approved for. This was the only program I was eligible for....plus I had 30 days to get rid of the "marital" car. The old loan on top of the new loan. The only good thing about this is, is that I only have 16 payments left and I have never been late!!! So once I hand in the keys, I will be rid of a car loan payment. Yippee!!

Re: Help!! Need advice......what I should do!!

Tuscani — Sat, 05 May 2007 02:18:26 GMT

Keep your head up! Its pretty obvious it is the car payment that is killing you!