Underwater. Not sure where to start. Please help.

[rarj13]

Hello,

I have been thorugh a hurricane of personal and financial hardship and need help climbing out of it.

I was financially stable a few years ago 35k credit lines. 780ish credit score. Debt free. (Except for my car loan)

Over the past 2 years, I had two daughters back to back(currently 18 mo and 2.5 years old, one of them was diagnosed with cancer(Now in remission after 6 mo of chemo - Thank God), and now divorcing. I missed loan payments while on unpaid leave in the hospital. My identity was stolen so I have to put a security freeze on my credit reports. Now my credit is 580. I am 2 months behind on my personal loan and I have 5000 in medical bills from this year i still need to pay. My wife stayed at home with the girls so now I am paying for child care, debt that we accrued from chemo, and even with a new better paying job, I feel like I will never get out of debt. 

I will try to attach my budget. Any advice would be very helpful. Thanks

[rarj13]

https://docs.google.com/spreadsheets/d/1jLpiHIu-8i77ZUiyzhpWKkg8AzjieRE9Nts8WCvd_JU/edit?usp=sharing

[Anonymous]

Two things come to mind 1) Regard id issues if you have not already done so file police report and then dispute any affected items on credit report.  Once you give them a copy they will remove them. 2) On the hospital bills. Some hospitals have financial aid offices.  If you explain the issues times they will forgive the debt Ten years ago . Mrs Backwoods was very  ill and her hospital bill hit one million dollars.  Insurance did not cover about $100,00.   I said we could pay but it take many  years .  What they did was forgive the remainder on the condition we keep current on all her bills for follow up treatments. 

[KLEXH25]

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@rarj13 wrote:

Hello,

I have been thorugh a hurricane of personal and financial hardship and need help climbing out of it.

I was financially stable a few years ago 35k credit lines. 780ish credit score. Debt free. (Except for my car loan)

Over the past 2 years, I had two daughters back to back(currently 18 mo and 2.5 years old, one of them was diagnosed with cancer(Now in remission after 6 mo of chemo - Thank God), and now divorcing. I missed loan payments while on unpaid leave in the hospital. My identity was stolen so I have to put a security freeze on my credit reports. Now my credit is 580. I am 2 months behind on my personal loan and I have 5000 in medical bills from this year i still need to pay. My wife stayed at home with the girls so now I am paying for child care, debt that we accrued from chemo, and even with a new better paying job, I feel like I will never get out of debt. 

I will try to attach my budget. Any advice would be very helpful. Thanks

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Hi Rarj13,

First of all, I'm so sorry you're going through this. I can't even imagine the stress and pressure you must feel. I'm so happy to hear that your daughter is in remission at least. Have you spoken to your lenders about the loan and bills? Perhaps you can set something up as far as a more managable payment plan. Is your wife working again? I know you said you are divorcing, but I'm trying to figure out how she is contributing to the finances. Obviously the childcare is really hurting your budget (on top of everything else). Is there any way you can supplement your income, like driving for Uber? I know this is a very minor suggestion, but you can check with your electric company if they do an equal payment plan. It helps take some of the guess work out of your bills, and it keeps the payment the same during the months you're using more electricity.

I have seen people come out of worse debt and situations, so please don't lose hope. I'm sure you'll find some helpful suggestions here.

[JTC-137]

That’s a wonderfully detailed budget, one of the best ones I’ve seen. Since you’re running a monthly deficit first thing to do is stop the bleeding and get back afloat.

1. The medical bills and gym membership are gone, for now at least. Talk to the hospital, if they won’t do a full debt forgiveness try to negotiate a lesser amount. At the most they get $25/mo until you get back on your feet.

2. Is internet a necessity for a job? Could you suspend it and live off cell service? Many plans have unlimited data, might be worth looking into. Between items 1 & 2 you should at least break even at this point starting in September according to your budget.

3. Can you move to a place with cheaper rent for a while? Honestly that rent is too high in relation to your current income (almost 40%). Shoot for no more than $900/mo.(<30%) if you can.

4. Start looking into a side gig and increasing your primary job income. You’ve got a lot on your plate; I’m not sure what custody schedule is looking like, but if time allows you to pick up a second job or work overtime it could be a welcome distraction with all you’re going through.

Finally, try to remember this is just a season in your life that will pass.