please help

[Anonymous]

Hi everyone I got myself into a real mess, looking for some advise.

I am finally hitting a wall and can't borrow from Peter to pay Paul anymore.

here it it is: all cards are at the limit. I have 3 kids, 1 in college, 1 going to college next year and the youngest in 9th grade. I am not sure who I should go see for help. I have been doing alot of reading, but still confused.   Thanks

Income:

48-Wife-26000-take home-1300. a month

46-Me-70000-take home-3800. a month

Bills:

Me  -score-651-was 720 8 months ago---no days or more late -all current

B of A=10,200.--300.00mo-24.99%

B of A=7600.--135.00mo-8.74%

B of A=5700.--145.00mo-19.73%

Cap-1=2000.--65.00mo-1.99 then 14.90 in 6mo

credit union visa=4500.--85.00 mo-7.0%

car loan-7000.--300.00 a mo-6.0%

wifes car-19000.--385.00 a mo-7.0% upside down on it-$2500.

life insurance-me & my wife 500.00 every 1/4

kids student loan-sallie may--10000.00--126.00mo

RI student loan--9000.00--110.00mo

Mortgage-1st-188000.00-1540.00 mo--house value--275-290

mortgage-2nd 52000.00--350.00 mo interest only -prime

Monthly utilities around--700.00-

Wife-score 620---only (1) 30 day late Fashion Bug, all others current

bills:

Chase--12000.00--240.00mo-12.0%

B of A--12500.00--464.00mo-31.49%

Elan--600.00--30.00mo-31.49% was 6.0% (credit limit-8500.00) but paid late pasts due date 2 times-interest went up for 6 months.

Macys-325.00- 25.00mo-22.90%

JCPenney-2200.00-115.00mo--24.99%

Fashion Bug--375.00--25.00mo--25.00%

Americ-Eagle-400.00--25.00mo--21.24%

Kohls--1500.00--40.00mo--21.90%

no assests or money in the savings---I know it doesn't look good--my wife finally find out and she hit the roof. I took today off to try to get some help.  thanks

Message Edited by northern on 04-03-2008 06:34 AM

[Anonymous]

What I've seen others suggest is take a 2nd job and put all the money from that job towards debt.

Call your CC companys and try to get your interest rate lowered. I also saw someone say something about asking them for a modification or repayment plan. I think maybe it was ivyalmighty who mentioned it.

[llecs]

Welcome to these forums!

If I were in that situation, and DW and I were at one point, then I would hunker down and rebudget. You are making good income. I would stop charging your CCs.

Rebudget. Make deep cuts. Cancel that cable. Keep the insurance if a term policy, but stop any savings you may or may not be doing. Re-adjust your W-4s. Renegotiate APRs. Study every bill or expense you have and ask yourself if you really need it or not. Stop going out to eat and do without the movie or DVD. Track everything out with your wife and create a budget together. Sounds like she's on board for a financial change.

Create an emergency fund of $2-3k and stop using your CCs.

There's so much more you can do, but IMO list all of your current debts from smallest to largest. Make minimum payments on everything but apply all extra money to the smallest. So, by rebudgeting, you should have at least $500 extra to throw at debt, I challenge you. So, if I see correctly, pay off Macys and throw the remaining $125 plus the regular minimum to Fashion Bug. The next month, pay off Fashion Bug with a $250 balance and take the other $250 and pay the next. I bet you could payoff 6-7 CCs by the end of summer by doing this. The minimum payments you are making are not helping any. You're going backwards doing what you are doing.

Also consider ways to increase your income. Think outside the box. If you lost your job tomorrow, what would happen? Find a way to create multiple sources of income to a point where if you did lose your job, you wouldn't stress about hitting the help ads again.

Sorry for going to long. It is hard to be succinct with this type of info.

[Anonymous]

Northern- I can only imagine your frustrations and fear but you said when your wife found out, she went through the roof? This is not just your wrong doing. These items below cannot be a surprise to her at the very least:

Chase--12000.00--240.00mo-12.0%

B of A--12500.00--464.00mo-31.49%

Elan--600.00--30.00mo-31.49% was 6.0% (credit limit-8500.00) but paid late pasts due date 2 times-interest went up for 6 months.

Macys-325.00- 25.00mo-22.90%

JCPenney-2200.00-115.00mo--24.99%

Fashion Bug--375.00--25.00mo--25.00%

Americ-Eagle-400.00--25.00mo--21.24%

Kohls--1500.00--40.00mo--21.90%

I don't think you should bear the pain in all of this. It should be 50/50, same for the 2nd job option.

[Anonymous]

We did call Bank of America and they said no, we can't help you. Dept card won't help us either. I have tried to consoildate the credit cards into one, 30 for me and 30 for my wife, with no luck. I tried to refi for a 2nd again, but not enough equity with the 80% rule.

[Anonymous]

my problem is

Income is 4100.00  a month

mortgage is 1900 a month

cc bills is 1600.00 a month

cars are 700.00 a month

college loans 200.00 a month

utilities are 600.00 a month

in 4100.00

out 5000.00

that's with no food or gas for the cars

I have been looking for a 2nd, but no luck yet

I'm not making excuses believe me, I know, just looking for help.

thanks for the responses, it all helps

[Anonymous]

---

northern wrote:

my problem is

Income is 4100.00  a month

mortgage is 1900 a month

cc bills is 1600.00 a month

cars are 700.00 a month- Can you survive with one vehicle? My spouse and I done this for almost a year with a newborn and a 5 year old, working different shifts, didn't live in town, and spouse had college to boot. We made it work b/c we knew that we couldn't afford another payment.

college loans 200.00 a month--  Can you get a forebearance/deferrment? If kid is in school, they should be able too.

utilities are 600.00 a month

in 4100.00

out 5000.00

that's with no food or gas for the cars

I have been looking for a 2nd, but no luck yet

I'm not making excuses believe me, I know, just looking for help.

thanks for the responses, it all helps

---

Utilities-- Does that include phone, electric, water, cable, trash, internet connection, cell phone?

Can you possibly cut anything out? If you have home phone and cell phone, do you need both?

Is there anything that you can live without for a year or so that you could sell for enough to pay some of your smaller balances off? Something that can be easily replaced?

Clean out the attic and garage and eBay?

Edited to add: I don't know your employment situation with you and your wife, but can either of you pick up extra hours? Maybe even for a position that isn't normally what you do, where they may need some temp help filling in or getting caught up?

Message Edited by sidewinder on 04-03-2008 07:47 AM

[Anonymous]

I agree with the above post about re-budgeting, drastic cuts in spending, and paying down the cards one at a time.

Lock up your credit cards in the safe, don't carry them with you, that way you have to make a conscious decision to spend and reduces reflex spending.

If you have a 401k plan a work, most plans you can borrow up to 50% of your vested value and pay back at terms up to 5 years. You have to pay interest, but it goes back to your 401k account. You can get out from under a lot of CC debt that way. BUT I would not suggest borrowing from your 401k plan though until you re-budget and change your spending habits. 

[llecs]

---

northern wrote:

my problem is

Income is 4100.00  a month

mortgage is 1900 a month

cc bills is 1600.00 a month

cars are 700.00 a month

college loans 200.00 a month

utilities are 600.00 a month

in 4100.00

out 5000.00

that's with no food or gas for the cars

I have been looking for a 2nd, but no luck yet

I'm not making excuses believe me, I know, just looking for help.

thanks for the responses, it all helps

---

I think your take home is $5100. Even $5100 seems very low. If your income is $96000 and your net is $5100, then you are paying at 47%. That is high. Excluding Sched. A interest deductions for your mortgage but excluding maybe 7% for FICA, 40% is huge. You should have received a sizable refund. Plus you have up to $2100 coming to you next month for the tax stimulus, assuming you file by the 15th. You can use that for debt reduction.

DW and I have approx the same income and have 3 kids. Our tax rate for federal is 5% for 2007. Very happy about that but we are always finding deductions to reduce our taxes too. 25% should be par for you.

[Anonymous]

Your mortgage alone puts you at a +46%  DTI!!!!

Stop using your cards - NOW!  If you have to cut them in half (keep one 'just in case')

Do you have the space to perhaps rent out a room (or the basement) to anyone?

Get rid of one of the cars - (no payment and insurance  will drop also) - whichever one you can 'clear' don't be picky.  Someone will need to use public transportation to work. (or alternate).

Call each utility and get on 'budget plans' - a set payment each month.  Pay you utilities each month with the one intact card - and pay that total amount every month PLUS  whatever you can throw at it

Pack a lunch (no eating out midday) - also pack a  thermos of coffee/tea or a cooler of water/soda each day.