Who do I talk too - Money issues

Sorry for the fake name but I know people IRL here


We got ourselves in a big financial mess. It is what it is most of our debt was unavoidable with kids in daycare full time; some I admit was definitely avoidable. Lesson learned.

Right now I am current on our house payments, car payments and insurance, loan and credit cards. Household bills (cell, cable, electric, etc) not so much I am month behind on all of them trying to catch up.

But I can't sustain it any longer and we can not afford to stay current on our credit cards.

I signed up with a debt consolidation company a couple months ago but it has not given me any type of relief; the monthly payment is too high.

I need to talk to some one about the best options. I plan on keeping up to date on my house, car, loans etc. I know my our credit will now be shot but I need to do something about the credit card bills. I am willing to pay it off but I can't at the amount they want a month and the interest rate it will never be paid off.

Is bankruptcy the best bet? Settling the debt?

I need to know I won't loose our 401K, our house, cars etc.

Do I talk to a lawyer?
I plan on talking to the debt consolidation company to see if they can cut the payments in half but I have a feeling it will not go over well though to me its better paying them less than me not paying the creditors anything at all.

I am so stress and trying my best but its not working.

Who do I talk too - Money issues

Deep breath. DH & I got ourselves into quite a bit of debt recently also so I know it's overwhelming.

Can you or your DH get an extra job? This is what DH is doing. It's PT in his field and we plan on using that money to replenish our savings and then pay down our debt. Also bonuses and income tax money is getting thrown to the debt until its paid off.

Temporarily stop or lower your 401K and any other investments until you get back on your feet.

I am a Dave Ramsey fan although I don't fully agree with all of his advice. Can you get the Total Money Makeover book from the library? It's a great easy read and reading the testimonies in there shows you you are not alone and there is light at the end of the tunnel.

Second you won't lose your 401K those are protected assets so don't stress about that.

Keep current on your mortgage, car, insurance, electricity bills..basically the necessities and stop using the cards.
I think bankruptcy should probably be your last option.

I would try calling your cards and lowering the rates and payments.
Can you do balance transfers to 0% cards and try to pay down faster that way?

Did you do a debt consolidation loan or go through a debt consolidation company where they negotiate your debt??
If it was the latter call them back and ask if anything can be done to lower the payments even further.

Mainly breathe, you are not alone and it's not the end of the world you will eventually get through it

Who do I talk too - Money issues

I would make an appointment and see about filing a Chapter 13 BK. Obviously probably not a popular opinion, but it will allow you to keep your cars, your home, and you will enter into a structured repayment plan to your creditors. You would make one monthly payment to your bankruptcy trustee each month, and the plans typically run 3-5 years. Many of our clients paid off all of their debt this way, many just paid a portion of it (it really depends on your income and expenses). Just know, if you are only paying a portion of your debt back through this route, they will take your tax refunds each year until the plan is paid off. (If you want the name of a law firm, message me)

Message edited 10/21/2016 9:30:16 AM.

Who do I talk too - Money issues

Sorry for your troubles. I know financial stress can take a huge toll. A close friend of mine filed for bankruptcy. I didn't know much about it at all and had a lot of preconceived notions in my head about it.

Once my friend started the process and confided in me, it didn't sound like the worst thing ever. They are married and breathing much easier now. They are able to keep their home (they still pay mortgage) and their car (still paying it). I believe they had to write a letter stating that they'd keep paying those things.

I think after two years, they will be able to get a secured credit card.

Yeah, your score drops and it's on your credit report for 7-10 years or so but the good thing to keeep in mind is that credit is repairable. So that's good. They obviously have no credit now and just pay cash for everything - so that's something to think about. It's good if you have family who can help out if god forbid something happened, you know?

They were so stressed out before all of this but are much more hopeful and relaxed now. It does seem that people who run into financial trouble like this tend to have it happen again - (there are stats that show it) so after things are on the mend for you, I would also examine how to prevent it from happening once more.

Don't feel bad or beat yourself up. It's happened to tons of people! You won't be the first or the last. :)

Who do I talk too - Money issues

The quickest and easiest thing would be to get part time jobs. You need to bring in more income.

Re: Who do I talk too - Money issues

I did a debt consolidation company. They got 0% on some of the card and really low rates on the other cards. I just can't keep up right now with the agreement they mad. In a few months from I can probably sustain it again but right now I can't.

I am no longer using the cards.

I am trying now to get a second job, I can't work too much more since I work full time as is so it won't be tons of money but I figure it something.

I would hate to loose my tax refund. Plan is to use that to put aside for daycare expenses and use it to pay off some of the debt. I don't want too loose control of that. Bankruptcy needs to be last choice.

How do people get debt settled. The thought of just stop paying for a while stresses me. I am not that type of person. I can't imagine be harassed by them etc. Plus I imagine fees and interest rate will keep making our debt go up more

Re: Who do I talk too - Money issues

Posted by stressmoney

I did a debt consolidation company. They got 0% on some of the card and really low rates on the other cards. I just can't keep up right now with the agreement they mad. In a few months from I can probably sustain it again but right now I can't.

I am no longer using the cards.

I am trying now to get a second job, I can't work too much more since I work full time as is so it won't be tons of money but I figure it something.

I would hate to loose my tax refund. Plan is to use that to put aside for daycare expenses and use it to pay off some of the debt. I don't want too loose control of that. Bankruptcy needs to be last choice.

How do people get debt settled. The thought of just stop paying for a while stresses me. I am not that type of person. I can't imagine be harassed by them etc. Plus I imagine fees and interest rate will keep making our debt go up more

Re: Who do I talk too - Money issues

Posted by stressmoney

How do people get debt settled. The thought of just stop paying for a while stresses me. I am not that type of person. I can't imagine be harassed by them etc. Plus I imagine fees and interest rate will keep making our debt go up more

Re: Who do I talk too - Money issues

Honestly, second jobs for both of you, completely cut all tv, eat out, see if you can get basic no frills phone for $12 a month. Hopefully you have unlimited internet and use that for entertainment. Sell stuff. Pick a less expensive day care, or talk to them to see if they can cut the cost. Can you get a family member to watch the kids. Could you sell the house and move into something less expensive?

Re: Who do I talk too - Money issues

Re: Who do I talk too - Money issues

Sorry you are in this mess.

I know this is not the popular answer and probably not the best advice for everyone, but the way we personally got out of debt was by me taking out a loan on my 401k, and paying off all our debt. Sure my paycheck took a big hit, but that was happening anyway with all the bills that I was writing checks for each month. I saved a ton of money on intrest and my credit score kept climbing higher & higher.

Honestly, the best thing we could have done.

There are HUGE risks in doing this and it is generally not advised, especially if you are not fully vested AND your job is not secure. You have to really look into the terms & conditions of your individual plan to see if it would work for you & your family.

You will get out of this one way or another.

Message edited 10/21/2016 1:31:16 PM.

Re: Who do I talk too - Money issues

I am in the same boat as you. Daycare and aftercare is what is killing me!! I work full time and have a small business on the side making treats, so I am doing that also even though its not much money.
I have went to basic cable, changed phone plans to lowest I could find. I had to switch to different car insurance also. In the end I took out a loan from my 401k to pay off my highest credit card of almost $6,000. I took out $8,000 total. and that has helped big time. I pay myself back and yes my paycheck is less but not by much. It is still a struggle but at least now I can buy some food for my home and have a little comfort. I can not wait until my 3 year old goes into Kindergarten I will save $1000 a month. You will get through it. Hang in there!!

Re: Who do I talk too - Money issues

Have you thought about taking a loan out against your 401 K? you will get fines on it but if it is enough to pay off your credit cards it may be an option.

Re: Who do I talk too - Money issues

I have thought about taking loans out of my 401K but I don't know how much that would help and if I lost my job I would never be able to pay it back.

That's why I need to talk to someone about all this to find out what the best options are. Just don't know who to call.

Thanks everyone for you advice and input

Re: Who do I talk too - Money issues

Have you thought about
-cutting your cable completely?
-get a very very basic cell phone plan?
-sell you cars and pay off those loans and buy a $1000 beater off of craigslist?
I don't know about your lifestyle, but maybe it doesn't go without saying, no more starbucks, no more out to eat, no vacations, no more new clothes, shoes, bags, golf stuff, or whatever extra out of pocket expenses. Stop spending money that isn't an absolute necessity
-someone gets an extra job on the weekend, waitress, bartend, overnight home depot shift whatever.
-craigslist/FB board stuff. Old kids toys, sporting goods, electronics, purses

If your credit isn't shot yet, you could apply for one of the 0% cards, and transfer some balances and start paying down that way.

I don't know how big a hole you are in, but doing both a very hard to the bone cut of things can save $100s a month. You can generate $100s from the craigslist selling, make a few hundred a month from 1 person working 1 weekend shift a weekend. Selling the cars will stop those payments and buying something cheap for cash will not start any. If you have any equity in the cars, that can go to paying down debt.

Re: Who do I talk too - Money issues

I did the loan against my 401k in my 20s and it helped tremendously. Although I wasn't earning on that money I was at least paying the interest back to myself. I would cut your 401k contribution and look into you and your husband doing a loan. But you need to be very disciplined. Save everywhere you can if you aren't already. I cut out every unnecessary expense and within about 6 months it was all better and I was able to breathe again. Good luck!

Re: Who do I talk too - Money issues

Re: Who do I talk too - Money issues

Posted by stressmoney

I have thought about taking loans out of my 401K but I don't know how much that would help and if I lost my job I would never be able to pay it back.

That's why I need to talk to someone about all this to find out what the best options are. Just don't know who to call.

Thanks everyone for you advice and input

Message edited 10/24/2016 12:23:16 PM.

Re: Who do I talk too - Money issues

I'm going to mention this but you are probably doing it already. Stop buying any type of food item out...even a cup of coffee. Plan your meals using flyers and coupons. That will help with your food costs.

Re: Who do I talk too - Money issues

I have been there too. Dh and I filed for Chapter 7 bankruptcy back in 2011; I wasnt working; we owed so much.

Our house was protected b/c we owed more than the house was worth at the time. (Thanks to the market crash of 09).

1) steer clear of DEBT SETTLEMENT companies. these are no good and worse than bankruptcy.

2) Debt consolidation: look into Green path Debt solutions. they are reputable. We did look into it, but b/c we were in the red every month, we were advised to file for bankruptcy. You need to show that there is $$ every month to pay the payments they set up for you.

3)if you want to modify your loan with the mortgage company (which we did in 2014) you will need to NOT pay the mortgage for 60 - 90 days in order to get any help. They will not consider anything help wise unless you are in arrears. (What we did was keep the $$ we would have used to pay the mortgage in a seperate account in case they denied us, then we would have the $$ for the back payments). See if your mortgage is Fannie Mae or Freddie mac backed and then start with them. or your mortgage servicer (whoever you pay the mortgage to). it lowered our payment and gave us some relief there.

I can tell you 5 years later we have rebuilt credit, we do have credit cards (some we were able to keep with the filing as they werent entered into the judgement, but have small limits); and anything we do put on the card is really to earn airline miles and gets paid right away.

we own both of our cars, so no car payments or leases.

I love Dave Ramsey and try to follow a lot of his practices. Instead of the envelope system using cash, i do this electronically with Capital one 360 checking / savings accounts. IT has worked well for us.

Feel free to PM if you need anymore info. Im happy to help.

Who do I talk too - Money issues

Do you have a budget? I would make a detailed budget (go over the last 6 months of actual spending) and see where you can cut. Cable/cell/eating out/car payments,etc.

Do you typically get a tax refund? I would run a tax calculator - maybe you can change your w4 and get more cash in your checks each month.

Who do I talk too - Money issues

Depending on your tax bracket- I would not stop retirement (maybe lower it if at all). Banks can't come after your ira/401k or pension.

Who do I talk too - Money issues

How much exactly do you owe? I don't think filing for bankruptcy would be the answer. I would first start with the card companies and see if they can work with you on the payments.
I would also look where you can cut expenses. Expenses such as eating out and coffee add up fast. Twice a year DH and I do no spend months where we literally pay our bills, buy the essentials from the food store and that's it. We take the money and put it in the bank and it's honestly crazy how much we spend on extras at times but at the same time we enjoy going out. I take all the money I saved in those months and it goes in our emergency account.
Same for food budget- that's a big one in EVERY household! Don't buy stuff you don't need- chips, Soda, etc. as far as snacks yogurts are inexpensive, crackers and peanut butter- sure it may not be ideal but you have to do what you have to do!
I do try and follow different methods of tracking and monitoring some work some don't.
If your minimum on a card is say $100 then don't go to dinner one or two nights that right there is a payment. Do you have like an employee assistance thing where can get free anonymous financial counseling? I did it through work prior to us buying our house to see if there was anywhere I was overspending and it was so helpful just to outline our expenses and look where I could save. I'm not sure if banks offer the service for free? But it could be something to look into.
In regards to childcare are you spending more on day care than you are bringing home? If that's the case I would evaluate if you would be better off staying home for now rather than working. Also is it possible to work 4 days a week or a weekend day so you can cut 1 day from day care?

Message edited 10/24/2016 12:28:53 PM.

Re: Who do I talk too - Money issues

Since you are still current, I would try for a low APR personal loan or home equity loan and pay off as much of your CC debt as possible. Not only with the interest rate be much lower it will be set for a certain amount of months so you are not continually building interest. I did that about 5 years ago and what I have been able to accomplish with paying off debt is amazing.
I would also speak to a lawyer, though, just to learn about the different bankruptcy options and know where you stand. Many will offer free consultations.
Good luck! I know it is daunting but it can get better and it will!

Re: Who do I talk too - Money issues