Am I doomed for bankruptcy or is there a way ?

[Anonymous]

Look at every single thing you are spending money on, and make an action item how to get it cheaper or cut it out completely. Everything needs to be cheaper.

[kjel]

Here's the Come to Jesus reality....are you looking for validation for your excuses as to why you can't do something or are you really looking to make some meaningful changes?

I've been in your shoes. I went to school and worked two jobs while raising a family. Was it hard? Absolutely. Can you do it? If you really want to. In your cases, filing a BK isn't going to change anything for you or your family. The same habits and same decision making rationale will be present and you will likely end up right back in the same position except that your credit will be further in down the toilet.

I am sure you and your spouse fight about money and finances. You either need to get on the same page and work together for a better future or you need to separate yourself from any joint accounts/credit. Stop using your cards except in the event of a true emergency. You can't afford to use them. Stop buying anything other than food or personal care products. Make a diary of every penny you spend in a week and on what., it will help you determine what you are spending on and help identify areas that you can save in. Even if you can eke out $10 of savings a week, that's a $40 payment on your credit cards. Also, if you are getting earned income tax credit as part of your tax refund, you can fill out a W-5 form to have it added to your paycheck which will also give you a few extra dollars. Cooking at home, couponing, buying stuff only on sale or second hand, selling unused items on ebay or Craig's List, finding a part time gig, looking for a better primary job, reducing cell phone service, cable service, setting your thermostat a couple degrees lower, shopping for better rates on car insurance, combine car trips to save on gas, etc. 

There are many ways to save $ and get serious about eliminating your debt, but only if you are serious about it will you see any change. Good luck.

[Anonymous]

OP, you are wrong about getting a break on one or more CC.

Call your CC and personal loan companies. Explain that you are pretty much maxed out and cannot afford monthly payments. Almost all of them have programs where they will halt or reduce payments for a certain amount of time. Get a few of your payments reduced and focus on paying down one or more cards.

At the same time, you really need to look at your spending. I can see one instance where you are spending too much - your car! Sell that car and buy something used. You can get an early 2000 honda or toyota that's very reliable, much cheaper, and likely similar maintenance costs to your current 2012 that's eating up your monthly income.

Yes, you'd take a loss on your loan, but the cash difference with switching to a much more affordable vehicle will allow you to significantly pay down your high interest debt.

If you are really serious about getting out of this cycle, you'd do three things:

1. Get rid of that car asap for something more affordable, using the cash difference to pay down high interest debt.

2. Call all your personal loan and CC companies to ask them for deferments. Start with asking for 6 months, They'll probably talk you down, but getting 3 months is better than nothing.

3. Kick your husbands ass and get him to live within his means. I don't even understand how with all you two are going through, you can be struggling and he's still living large.

4. Don't use the extra money (from selling your 2012 and buying a used early 2000s car) and CC deferments on anything but debt. It appears that you do have enough income to barely make ends meet - continue doing that and put all extra income you get through this process to your high interest debt.

Be smart! $500 at 30% interest making minimum payments is going to cost you more than $5000 at 5% interest. Pay your high interest debt first, then cut up those cards. You are not in the financial state to play the "maintain CC usage" game. Your top priority is first getting out of this mess. If that results in a couple cards getting canceled due to non-usage, so be it.

[barbaralee]

I think part of the problem here is you say it is too hard and unrealistic, but you are speaking to an audience who has largely been there, done that. We had to carry a balance of 3k on a 0% card recently this last fall, and my husband is salaried while I have unlimited overtime. So I worked every. Single. Day. 10-12 hour days in my first trimester of pregnancy. I was sick, tired, newly pregnant, I would get home and go to sleep immediately. But I did it, and that 3k of debt was paid off in a month and a half. I know it's a bit of a "I climb uphill, both ways" story, but I DID. 

It's like a girl at work who recently bought $1500 worth of furniture, and if she does not pay it off in one year she will have paid 126% in interest. She refuses to do overtime or work on the weekends, because "it's not worth it, I need my weekends". 

You have to find where your priorities are. You don't have to eat by candlelight to cut expenses, you and your hubby just need to get on the same page with making smart decisions on getting rid of debt. And yes, those decisions usually entail working extra, very long, exhausting hours with little to no time for yourself. But it is the sacrifice one must make if they want out of debt. 

Also, I am assuming you are not giving us a complete picture of your finances. First your finances don't make sense: From my understanding, if you get tips and your tips can not or not do equal out to be at least minimum wage then your employer is required to pay you more. It's not possible you are working those hours at that rate (as someone has already done the math). Also, if you are talking about filing Chapter 13, and you can't qualify for state assistance on 20k + kids... then I am assuming your household income is larger than what you are saying. 

[gdale6]

No one is doomed for BK if they are willing to make the hard choices to avoid it.

[Callandra]

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@barbaralee wrote:

Also, I am assuming you are not giving us a complete picture of your finances. First your finances don't make sense: From my understanding, if you get tips and your tips can not or not do equal out to be at least minimum wage then your employer is required to pay you more. It's not possible you are working those hours at that rate (as someone has already done the math). Also, if you are talking about filing Chapter 13, and you can't qualify for state assistance on 20k + kids... then I am assuming your household income is larger than what you are saying. 

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I was thinking that myself...didn't OP say she has 4 kids? So that's a household of 6 and if her income is only 20k, that definitely meets requirements for food stamps/EBT (and WIC if she has a baby). My guess is her husband's income is quite a bit more...so where is all of that going? Even with rent/car/utitlity payments, there should be at least enough left over for food. 

[Anonymous]

I keep thinking about your situation. I know you can do this. What does your husband think with all of this, he isn't willing to help cut costs and take over a few more bills? Have you discussed your thoughts on BK. I know you can find a way to make more money. You mentioned photography, which you can make very good money doing weddings. For beginners probably 1-2k for a wedding package. $500 for solo or family portraits. but you need all the camera, computers and software. If you want, you can PM me for an example of a girl I know who first set up her biz on facebook and it just took off. 

During the recession I was seriously considering taking a newspaper route in the mornings. I actually wish I had, it would have made things a little easier for me. It's hard to sell crafts like dolls, when the market is so small for it. Something easy that a lot of people need is easier. 

[Anonymous]

Three pieces of advice:

#1 - Take the credit cards out of your purse and put them in a drawer. From now on, pay only CASH for everything. Anything you put on the credit cards is simply going to charge interest. If you don't have the cash, just don't buy it. (Debit cards count as cash so long as no overdraft, no line of credit). 

#2 - Cut out any unnecessary spending. 

#3 - No really, cut it out.

And I mean take a COLD look at what really is necessary. A lot of stuff you THINK is necessary just isn't.

Do you really NEED that car? I used to take a bus everywhere. It's possible. Car = insurance, parking, gas, car loan.  Are you buying a coffee every day at work? Do you have a cellphone? Cable TV? Wear sweaters in the house and turn the down the thermostat?

Yeah it will suck to live dirt poor like that for awhile but it will free up $$$ that you can use to eliminate debt, and the more debt you eliminate, the more $$$ will free up to eliminate more debt. It'll snowball, and eventually you WILL knock the debt out. Then you will be able to enjoy a better life WITHIN your means.

Tough it out!