I need help!!!

[Anonymous]

I dnot know what has happened to me. My finances are awful. I am a 23 yr old single mother. I just move back home with my parents 2 months ago because I couldn’t pay my bills. My daughter’s father stopped helping financially at the beginning of the year. I just went to court for child support and they are making him pay $250 monthly starting July first. I just found out yesterday that he stopped going to work so that he could get fired and receive unemployment. And he is planning to move to Florida with a relative before payment starts. He is very immature.

That put me in a financial bind for the last few months. I got a weekend job with a catering company but it only pays enough to help with gas money for the week. I am trying to catch up on old bills that I never paid off. I was very bad with money when I was younger and now all of it is catching up with me. So most of my problems are from not managing my money correctly from the beginning and having to borrow money to pay off other creditors. I was very irresponsible.

Here is a run down on my expenses.

Monthly income after taxes:  $1440

Monthly Expenses:

Car Insurance: $83

Incharge Debt Solution: $82 – 3 credit cards on account

                Lane Bryant- Balance of $190

                Capital One- Balance of $730

                Bank of America- Balance of $660

Loan #1: $80… Balance  $880

Loan #2- $90… Balance $1200

Title Loan: $60…. Balance- $318

Medical Bills: $105… Balance- $800

Daycare- $380

Gas- $280 (I do not have a car payment, but gas prices are crazy!)

I also owe my old apartment complex because I left to move back home 2 month before my lease was up. Its about $800

Collection Accounts

Wachovia- $500 (in chexsystems)

Cingular (AT&T)- $500

T-Mobile- $800

Charter Cable- $200

Bellsouth- $124

Cavalier- (phone)- $115

Georgia Power- $120

I don’t know where to start to get my balances down. I was reading a lot about Dave Ramsey’s Baby Steps. And I think that the Snow Ball Effect would work well. But it seems like I cant get a budget together. It has also been hard because my dad had surgery 2 days ago to have 2 toes amputated. So I am having to help out around the house with things and I am spending more money to help my parents.  I had to get my transmission in my car rebuilt and that cost me $1200. My credit is awful so I cant finance a car. But my car is running great now. But I want to be able to pay off all of my debt and save up money just in case my car completely gives out on me. I am so stressed. My daughter is 3 years old and it seems like she is growing out of her clothes every month! I have no idea of what to do.

I don’t even know if the child support will start on time since he quit his job. What happens then? I cant do this alone

I am wondering what debt I should pay off first. How do u go about paying off collection accounts? Or should I just leave them alone and let them go away after 7 years. The oldest collection account is about 3 yrs old.

[cam006]

sorry to hear about all of your troubles, but there is a way out!  (I know I sound like one of those cheesy "self help" folks) 

There are some smart folks here who will help you with the credit situation.  They have certainly helped me.

Another good source of information is the "women in red" (WIR) board on MSN money.  They will help you develop a budget.  They've helped me too and actually recommended this board to help me learn about how to fix my credit issues.

[Anonymous]

First, be aware that paying old debts does nothing to improve your FICO score. Once an account goes into collections or charges off, the scoring formula makes no distinction between paid and unpaid. To humans reviewing your credit report, paid does look a little better than unpaid.

But to recover your credit score, I'd say your two biggest friends are:

1) Time

2) Keeping low balances on your revolving accounts

Time is the running water that eventually wears down the rock of bad credit. It's not sexy, it's not the whiz-bang answer we all would like, but it works.

As far as whether or not you should repay those old debts, it's really more a question of your financial situation and ethics. From what I've read, Dave Ramsey is in the self-flagellant crowd that believes you should always pay your debts to the penny. Great idea...if (and only IF) you have the cash position to back it up. It's always easier to "do the right thing" with $100,000 in the bank than with $100, so I take a rather dim view of those with hundreds of thousands of dollars to throw around making those who are far less fortunate feel bad for not paying their old debts.

In short, being born on second or third base isn't a sin, but triumphantly marching past home plate and lording your "success" over all the schmucks who have to start from nothing and get a hit to even get on base themselves is rather annoying.

Before embarking on debt repayment (if you in fact decide to go that route), I would make sure that you are long-term solvent. This means having stable income that's at least 110% of your average expenses, and three to six months worth of savings. And if you do repay an old debt, make sure you pay it all at once, because if you agree to an installmen plan, some CAs will use that as an excuse to reset the clock.

[Anonymous]

If your trying to save more money in the long run...pay a little more than the min payment on the loan...to try to get them paid off ASAP...

Or...if your trying to fix credit...to your hardest to PFD the collections...the are all basically utility bills...and it seems like they are the easiest types of collections to deal with...also...they are pretty recent...so you should see some sort of increase...and like the previous poster said...keep you UTL on your CC's under 10% UTL...


Also...what is the SOL in your state...because you really don't want to get a judgment on you reports from the apartment complex...they are quick to sue...I would set up some sort of payment arrangement...so they won't sue...

[Anonymous]

Thanks for all of the great responses and advice.

My main focus is to pay off all my debt as soon as possible. I dont want to owe anyone. And i didnt know if it was more important to pay collections first because I got an alert on my credit monitoring that there was a judgement or suit for my lane bryant account. What does that mean?

Plus I thought that my stimulus check would have been direct deposited last month, but since i was in such a hurry to get my tax refund to fix my car, i did rapid refund and had it deposited in my account. BIG MISTAKE!!!

So i will not get the check mailed until after the first of july. I want to u se most of that money to pay off some debt. At least $500 of it.

What else do i need to do?

[demi]

I would also check on what programs might be available for you thru either the government or non-profits.  I would check on what happens if your babies father bails....there is still probably money available thru the court system.  If you could take this time and opportunity (living with parents) to find a decent paying job, or to go back to school, in the long run it will help.  Do not look at it as welfare, look at it as an opportunity to help your child.

Good luck !

Message Edited by demi on 06-05-2008 04:24 PM

[Anonymous]

I see that you owe GA Power money and the only reason I bring this up because GA does have some childcare assistance programs if you still live in GA (I live in GA too).  Here is the link:

http://dfcs.dhr.georgia.gov/portal/site/DHR-DFCS/menuitem.5d32235bb09bde9a50c8798dd03036a0/?vgnextoi...

[llecs]

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TheNewWorldMan wrote:
From what I've read, Dave Ramsey is in the self-flagellant crowd that believes you should always pay your debts to the penny.

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I haven't listened in a while, but from what I've heard he always recommends negotiating a settlement if you have the opportunity to do so.

IMO, you should pay in full, not out of any moral sense, but I've been burned in past of CAs and OCs not honoring their agreement (before finding these forums). I figure that PIFing minimizes that risk.