topic Re: I've hit rock bottom in General Credit Topics

I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 04:19:20 GMT

Hi everyone, I'm Rob. I thought I had hit rock bottom 2 years ago when my credit score was about 580. Boy was I wrong. Recently I have become trapped in a payday loan nightmare, and it caught up to me last month. I went to 7 store front payday loan establishments and racked up $4600.00 total in payday loan debt. I went to one, then the next and so on to keep up on my money. I blew several chances at catching up. I got a $8000.00 settlement and blew right through it without paying anything off. What happened to the money? I don't know. My wife has a gambling problem, I can't say no when she asks for money, we bought a big screen TV, a new bed, the stupid list goes on. This month I missed my mortgage payment. I missed all 5 of my credit card payments, (total amount of $2900.00) and I was 3 months behind on my electric bill until I was forced to pay $350.00 or it would be disconnected. So I got one more payday loan for $700.00 to pay that, my Water bill (which was 1 month behind) and now I have $400.00 of that in the bank to pay for gas for the car, groceries, the necessities. My wife asked to take $100.00 of that to go to the casino, and I finally said no way. I showed her that my credit score had dropped from 550 last month to 444 today because a collection showed up (medical bill) and my late payments on my credit cards showed up. I am getting a $1000.00 refund from school and the stimulus check of $1500.00 (did I mention we have a baby boy 16 months old?) I will pay the late mortgage payment of $1300.00 (my ARM also adjusted 2 months ago so I'm paying $200.00 more for my mortgage payment). Next month my wife's parents are giving her a check of unknown amount (each child gets a "big" check on their 30th birthday and hers is May 16th).

I absolutely have to default on most of the payday loans if not all of them next month because the fees amount to about $675.00 and I'm sorry, but the payday loans are at the bottom of my list of priorities to repay. Anyone who read my novel above...I need tips! Budget tips? What to do? Moral support, anything will help right now because as I said, I've hit rock bottom and I will not sink ANY lower. My wife's gambling problem is a non-issue now because there's no way in hell she will set foot inside a casino again.

one more thing-I don't want anyone to think I am blaming all my problems on my wife. I have wasted my fair share of money too, and I should have been able to say no to her. I take full responsibility for my problems.

Message Edited by rcuomo70 on 04-16-2008 09:19 PM

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 04:49:46 GMT

Hi Rob. Do not give up! You can make it through this by keeping your priorities straight. Make sure you have enough food (not junk) and can pay for electricity and water. Don't think that your wife's gambling is not an issue. I had some issues with DH and let me tell you... they WERE an issue. She may need counseling but if I were you, I'd keep a close eye on her and your wallet. But tell her how much you love and support her. You are still a team; you just have to pull more right now.

If you are expecting $2500 soon you can pay your house payment as you said and make sure utilities are not going to be turned off. If you've ever heard Dave Ramsey, "it's beans and rice, rice and beans." It's amazing how little we can actually live on when we are FORCED to change. Believe me, I know. I have five kids (six if you count DH, and he has brain damage- seriously guys). Say a prayer, take a deep breath, and get out a long piece of paper. You know what has to be paid first.

I'd sell that big screen TV right away! Put an ad in the paper or pawn that thing if you have to. Walk through your house... what else can you sell if you need money to pay bills? Maybe have a yard sale? Have a family member or good friend babysit a few nights a week while you deliver pizzas or bag groceries to get these loans paid off.

Sit down with your wife and discuss these money issues. Talk about that check she's going to get. Maybe you guys can agree on how to use it to pay down the CCs and payday loans and put something in emergency savings. She is married with a kid and that means her money is FAMILY money. She helped make this mess; she can use her "birthday money" to help clean it up.

Rob, you can do it. Don't focus on you FICO right now. But do keep in touch with creditors as they might work with you.

Best of luck.

Message Edited by Bzzzymom on 04-16-2008 09:49 PM

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 05:01:05 GMT

I'd check for credit counseling places close to you, they usually offer budgeting seminars and can help with this. Some are no cost or low cost.

The federal government has loans to help those with ARM due to the foreclosure crisis.

As for payday loans.........you may be able to call them up and just say "hey I can't pay the fees anymore, I'll make payment arrangements and pay you so much but I can not keep paying the fees and renewing." However, be aware that if you default on these, they will send the check to your bank and when it is returned insufficient funds, your bank is going to charge you overdraft fees and they may try to run the check twice. But if you call and talk to them and tell them you'll set up monthly payment plans or something, they may not send to the bank, explain that if they do, that is money that the bank will charge you that you could be paying them.

You said 7 payday loans........how much are each?

Can you explain the circumstances to your inlaws and get the birthday present early? Maybe ask them to pay specific bills instead of handing you all the money. This way you are not tempted into blowing through it until you get this budget thing down.

Do you have Microsoft Money or Excel on your computer? Fix you up a budget and figure out how much needs to each bill from each payperiod.

Example.....mortgage payment $1300......you have 2 pay periods per month........that is $650 per payperiod that goes to mortgage. Take CASH and buy a cashiers check or money order for $650 each pay period. Fill it out as soon as you get it and give it to someone you can trust to hold until the 2nd pay period and buy another, place them both in a envelope and mail off.

If electric normally runs $200 per month, buy a money order for $100 each payperiod and mail it to the electric company.......most let you pay on account even if there is no balance due. **You don't want to mail each money order for mortgage payment in seperately, as they will apply it to your principal and not payment more than likely since it isn't a full payment. Dont' want to take that risk, send full payment.**

If min credit card payment is $2900, split it between 2 payperiods and mail it off as soon as you get it.

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 05:04:02 GMT

rcuomo70 wrote:
My wife's gambling problem is a non-issue now because there's no way in hell she will set foot inside a casino again.

As for this part.........if she truly has a gambling problem that she can not control........don't think for a minute that you saying no is going to stop her. Gambling is as much of an addiction as drug or alcohol is. Get her help! Seriously, people with addictions will stop at nothing to get their fix........whether it be drugs, alcohol, or one more nickel for the slots.

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 15:48:50 GMT

Bzzzymom:

I have thought about selling the TV but I can’t bear to part with it (that’s a joke ). I actually do plan on selling it. we are actually having a yard sale soon, probably in about 2 weeks. I can’t stand looking at the TV anymore anyway because it just reminds me of how I wasted a perfectly good gift (the money from the settlement). I should probably get about $1000.00 for it since I bought it only a few months back for $1600.00.

After I posted this last night, we did have a discussion about money. She is not so far into gambling addiction that she will steal money to go, but I have told her that any money going out has to be agreed upon first and discussed. If she wants to buy a coffee, it needs to be discussed, a pack of gum? Discussed. She feels really bad about the situation, but I know I need to monitor all cashflow.

Instead of getting a night job, I am going to work overtime, because my work allows almost as much overtime as I want.

sidewinder, I do have a budget in excel already. A good one. My problem is that I’ve been ignoring the budget and a budget that gets ignored is useless. So I am going to follow this budget and cut down on unessesary items in the budget like entertainment money, gas (I can take the bus or carpool) and other things like that. I will cut down on groceries by shopping smart, which I haven’t been doing.

The Payday loans with fees are: $795.00, $795.00, $795.00, $795.00, $795.00, $575.00, $575.00, and $345.00. If I were to roll them over next month, I would have to pay a total of $670.00 for the fees alone. I am closing my bank account and informing each of them that I have done so and that sending the check to the bank will just result in a returned check. I have discussed with my bank and they said that I will incur no overdraft or bounced check fees from the bank, but perhaps a $25.00 returned check fee by the payday lenders. I will stay in touch with all of them and ask them to allow a payment plan but hopefully my wife’s parents will give enough to pay off all of them right away.

I am paid monthly so I pay all the bills at the beginning of the month, so I don’t need to split up the payments. So here’s a screenshot of my current budget:

http://img.photobucket.com/albums/v292/Rob8oD/Rally/budgscreen.jpg

Thanks everyone, I appreciate the support!

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 16:35:21 GMT

Believe me - I'm not going to pick on you...But, I would take a second look at the budget you have set up. I think you could do a little more cutting. For example:

I noticed that you have $200 per month allocated for entertainment. Is that right? That's 10 months of payments on one of your credit cards.

You have cable. If you're selling the TV.....

What ever you do - TALK to your creditors. There's so much economic hardship going around that I'm sure they will work with you.

Good luck.

Re: I've hit rock bottom

jmbfl — Thu, 17 Apr 2008 17:07:36 GMT

I hate to say either of these things, but in your best interest:

1) Make certain you know the full legal implications of closing that bank account before you do so. Closing that account may actually leave you open for CRIMINAL sanctions. In some states this could be considered fraud or forgery (yes, forgery). If you have multiple bad checks that alone can be criminal - it would be here in Florida. The only thing that could make your situation worse is a knock on the door from the sheriff with a criminal summons or arrest warrant.

2) Tell your wife she MUST go to GA (Gamblers Anonymous) meetings. Tell her you will go with her and support her, but under NO CIRCUMSTANCES will you provide her with any funds for gambling! You need to go to Gamanon meetings. You may be able to find a location that has simultaneous meetings and that would be perfect. The purpose of your going to meetings is a little bit about understanding her problem and a lot about understanding and coping with what her problem is doing to you. Gamblers/Alcoholics/Drug Addicts are LIARS! They lie to themselves and lie to others. It is easy and nothing will get between them and their vice. You, yourself are at the point of lying and defrauding others to support her gambling problem!

Don't dig your hole deeper! Get real help from those that have been there ASAP. There is hope, but only for those that actively seek to be helped.

Message Edited by jmbfl on 04-17-2008 10:07 AM

Re: I've hit rock bottom

Jesedmotherof5 — Thu, 17 Apr 2008 17:29:47 GMT

Man- Im sorry to hear your tough times... but good for you for taking the bull by the horn before it gets worse. When I was at this crossroad I just gave up and let everything go bad. That was NINE years ago and Im still fighting it. I did close my bank accounts and i went to checx systems... not a good system to be on. I worked a few out for settlements whihc looked bad on my credit too. I was young and that left over money went to having fun!

Contact your mortage co and let them know you will catch up on your payment... they do not want another foreclosue so they will be helpful. An employee of ours was three months behind and he just got caught up! You can too!

Do not let your credit cards go.... Even if they build up fee's you can and will catch up, just dig away at those payments.... Use your entertainment money to catch up. It will fill good when its done! You can do it! You will need these to later build up your credit!

Do you have a dollar store around? The ones out here (CA) have food and baby items, cleaning suply everything. You can do it all for little to nothing!!

I have a 52" Flat screen TV that hubby just bought sitting still in the BOX in our formal living room becasue...why???. WHAT were we thinking??? We already have one in our bedroom... So I feel your pain there.

We have made alot of money in the last two years and we are constantly struggling EVERY MONTH... It just is not managed correctly! We like to spend. Luckily for me I have been paying those few cc i have gotten over the last two years flawlessly. I jsut wish I would have invested more time in this forum fighting to get thing PFD well before now.

Do NOT give up... fight ... fight ... fight... You made some bad chioces and now you will have to pay for them... we all do sooner or later right?

Give yuor wife a big hug and say you will get throuogh this togehter!

PS: MY SECRET: I have a scrappbooking addiction... seriously! I charged it all so my hubby wouldnt see it! Now I am paying down those BILLS to get my UTI down... Its hard... maybe not the same as your wife... but I have to watch myself the same as the two of you will have to watch her.

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 18:27:46 GMT

TexMontana:

Yes, I agree with you. I just posted what my budget currently looks like, before I cut items from it. We definitely cannot afford to have $200.00 in entertainment money each month. That will be cut. I posted the current budget to get suggestions and feedback. Our Cable will be cut to basic, but the phones are on contract and can't be cut any further than I have cut them. I am going to be contacting my creditors; definitely my mortgage company.

jmbfl :

I have looked into the implications of closing my accounts. According to the site www.paydayloaninfo.org, criminal action is not permitted in the state of Washington (where I live). It is a loan, plain and simple. A bad check would be if I found some old checks from an account I closed a long time ago and used those to obtain the loan, or if I printed some fake checks and used one of those. My only course of action to get a payment plan is to close the account first and then negotiate with the payday loan stores. Otherwise as soon as they get word I’m not going to pay it all upfront, they will start sending my check to the bank or trying to electronically debit the money.

I will definitely take my wife to GA. She is open to whatever we need to do and she will agree to go with me. (Heck, I need to go too, because I’m basically enabling her).

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 18:36:08 GMT

Hey Rob,

Sorry to hear about all that stress. Unfortuneately, it takes some of us hitting rock bottom to finally straighten out. It took me hitting rock bottom 4 different times before I got it.

My advice, take it or leave it -

Whatever you do - do not get behind on your house! Do whatever it takes to keep up on your house payment. Get your last mortgage payment caught up and and don't let it get behind again. When I started with myfico, my score was 471. You do not want a foreclosure on your record, trust me. Then you would have to worry about people even being willing to rent to you - let alone loaning you $$ for another house. Once you start letting house payments go, it gets easier and easier - just like those stupid payday loans! I hate them. I have vowed to never walk into one of those places ever again. I just have to think of how stressed I used to get when it came time to pay them back and I knew I wouldn't have the money.

It is going to be hard, but you will find your way. Be realistic when considering your budget -(if not you are just setting yourself up for failure if your like me) - but you have to be willing to be hard on yourself. I would get tons of great advice, but I just couldn't make myself follow it for some reason. Making good financial choices is something I will probably always struggle with - but I am definitely getting better and can say that I have learned tons from the school of hard knocks. Get help if you can. I couldn't give up the tv, but i had to make myself get rid of the cable. Sounds stupid, but now we just have local channels and use a movie- by-mail program for on $20/month. It's actually easier to get used to local channels only than you think and is way better that paying over $100/month.

The most awesome thing about this forum is that it let's me know that I am not alone and offers so much knowledge and support. I was always so embarassed about my financial difficulties/downfalls. I couldn't let anyone know how bad I had messed up - I figured they would think I was scum. Eventually, I realized though that tons of people are in similar situations and that we all make mistakes and experience different trials in life. It's great that you recognize the problems and are seeking help! Be thankful that you have a beautiful, healthy family and that you can at least talk with your wife and share this burden with her. You guys will get through it - good luck with the journey ahead of you. ~

Re: I've hit rock bottom

jmbfl — Thu, 17 Apr 2008 18:39:27 GMT

Glad to hear there are no legal implications. Here in FL they can and will get you civily and criminally. It is like debtors prison: put you in jail because you cannot pay, but you can't work then, so how in the hell are you supposed to pay? But once they get the legal hooks in you and you cannot pay up on the spot that is what will happen.

ChekSystems is worse that any CRA! If your bad checks end up in check systems you will not be able to open any new accounts until you settle them - and even then they will retain a record of them. So if you are opening other accounts DO IT NOW! Remember: You have rights pertaining to your credit record information. You have no such rights with regard to those bad checks...

Go to GA/Gamanon TODAY! AND NOT ONE MORE CENT FOR GAMBLING! Not even a lottery ticket. If it is a wager, it is out! The support group will do you both wonders.

Re: I've hit rock bottom

lyssa29 — Wed, 03 Sep 2014 21:49:37 GMT

I get that sick to my stomach feeling just reading your story because it reminds me so much of the place I just got past.

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 21:09:44 GMT

Thanks Lyssa:

My wife admits she has a problem and is open to whatever it takes to solve the problem. For now I'm monitoring the money closely and will see about getting her help. And I totally agree with you regarding my problem of going to payday loan stores. It was an addiction being fed by another addiction and it has hit the fan now.

I did look into other assets I have including a 401K which has $12,000 in it. I called them and they told me I cannot pull any out until either I retire or I quit my current job. It's frustrating to have that money which could save me and not be able to get it.

Re: I've hit rock bottom

jmbfl — Thu, 17 Apr 2008 21:13:08 GMT

DO NOT TOUCH THE 401k!

As long as that money is in the 401k plan in cannot be touched by your creditors.

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 21:25:20 GMT

But if I at least pull enough out to pay off the payday loans and my credit cards, I would be in much better shape, wouldn't I?

Re: I've hit rock bottom

jmbfl — Thu, 17 Apr 2008 21:42:52 GMT

How old are you?

Re: I've hit rock bottom

Jesedmotherof5 — Thu, 17 Apr 2008 22:34:02 GMT

You could request hardship loan and you would have to pay it back, but its not as bad as having serious credit problems.. I did this and it was fine

Re: I've hit rock bottom

Anonymous — Thu, 17 Apr 2008 22:41:06 GMT

Its odd that the payday loan people gave you 7 loans at one. I can tell you in the state of IL you can only have 4 at a time. They track something thru the govt so that no matter what office (be it the same company or different companies) you can only get 4 at any given time. Even then their are cooling off periods.

Re: I've hit rock bottom

jmbfl — Thu, 17 Apr 2008 23:05:22 GMT

Jese -

You are recommending to a person who cannot repay a loan that he borrow against JUDGEMENT PROOF MONEY to repay those paycheck loans. This is a bad plan and I am pretty much against it. I have no idea how much income is available to throw against this problem, but it sounds like not quite enough. I think the hope here is that the "birthday check" will be of a sufficient amount to aggessively pay down this debt. Short of that one has to ask if it will ever be possible to repay it. If the answer is "NO" I would be looking to make myself judgement proof before it hits the fan.

Re: I've hit rock bottom

Jesedmotherof5 — Thu, 17 Apr 2008 23:17:44 GMT

JMBFI

- You are probably right!

I just wish I could have gone back to the day when I was in the situtation to do anything possible to fix my credit before it got to that point and do it. Borrowing on my 401 would have been the best solution.