top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Deep in Debt and Very Scared, Don't know what to do

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Deep in Debt and Very Scared, Don't know what to do

    My husband has a huge amount of debt (around $75,000 in unsecured). There hasn't ever taken a cash advance, no balance transfers in the last 18 months, and most of the cards haven't been used in well over a year. We're only late on a few of them, most are current. Two of the cards (there are 9 card accounts) have been used somewhat heavily in the past few months, but no luxury items. Gas, Groceries, Utility, Phone, Insurance payments have been charged. There was a $300 charge at home depot about 6 weeks ago (non luxury). There is also a charge for a procedure that my dog had to have done at the vet when he was ill. The reason for the usage is that we have absolutely no cash after we pay the minimums each month so we've had to charge everything. We had an open line of equity on our home and had been using that to pay the minimums but it ran out so we had to start charging living expenses.

    We don't want to file bankruptcy, but I don't know enough about it. I'm still hoping to find a way out, perhaps by negotiating with the creditors for lower payments/lower interest. Most of the cards are at 30% interest or higher. We're getting no where with the minimum payments. I cry almost all day long and don't know what to do. I can't sleep at night, when I do fall asleep I wake up in a panic. I'm scared to death to answer the phone. We are only 9 days late on one card and they are already having collectors call. Discover started calling when we were one week late and they called about 7 or 8 times a day on the caller ID.

    My husband makes very little and my previously profitable business (sole proprietorship, not incorporated) has become pretty bad. Last year, I decided to go back to school as an adult learner so I can give up the business and have a career. I've made it through the first year, but I still have another year to go. I'm considering looking for a job at Target or Walmart, but I'm thinking that probably isn't going to help much at this point.

    My husband and I lived together for alot of years before we got married seven years ago (we've been together 16 years). Most of the credit cards are in his name with me as authorized user. I only have $11,000 in debt that is in my name only. There are no student loans or retirement accounts. We don't owe any tax debts. Just unsecured credit. There are no business loans as we used the personal credit cards to pay for merchandise for the business. There is no cash value insurance, only a small term policy on my husband that costs $18 a month with no cash value. We own one vehicle that we owe $15,000 on that we would like to keep, but if we have to give it up, that will be acceptable too. It's not upside down (KBB says worth $18,000) as when we bought it in 2004, we received 1.9% financing. We own a house that we purchased in 1999, a very modest 900 square foot house. We have no equity as we used it up to try to pay some credit cards. All of our furniture is at least 5 years old, as are the appliances and televisions.

    We live in New York. We are well below the median income (about $33,000 a year now). I don't know what we should do. Would one of those credit card consolidation companies be a good solution for us?

    Also, I was hoping to get a good job after college, will bankruptcy affect this? Seeing I don't have too much debt it my own name, would it be better for my husband to file bankruptcy and for me to get a Target job and try to pay off the $11,000 I owe? The house was purchased before we married and both the vehicle and house are in his name alone. We wanted to keep both the house and the vehicle if possible, thats why I want to consider credit counseling before bankruptcy.

    #2
    ##
    Last edited by SecondChanceGal; 03-01-2008, 05:41 PM.

    Comment


      #3
      Welcome to BK Forum, Lindsay - glad you found us!

      From what you've said, except for the mixing of business with personal debt by charging business expenses on your personal credit cards, your case is pretty straightforward. Thanks for giving us such great information - it really helps us help you faster!

      Most bankruptcy lawyers give free consultation visits. Make appointments with at least 3-4 in your area and find out where you stand on the bankruptcy side of things.

      Since you are still uncertain about filing or using debt management, here's a good website that can help you sort things out - http://www.moranlaw.net/consider.htm

      Also here's several really good websites that explain Chapter 7 bankruptcy very well - http://www.uscourts.gov/bankruptcyco.../chapter7.html , http://www.moranlaw.net/chapter7.htm and http://www.moranlaw.net/7discharge.htm

      We wanted to keep both the house and the vehicle if possible, thats why I want to consider credit counseling before bankruptcy.
      If the payments on both the house and car are up to date, and the NY bankruptcy exemptions can protect whatever equity you have in your house, you can file and still keep both house and car. Ask about this when you have your free consultations with the 3-4 bankruptcy lawyers.

      Also with the debt split that you have between you and your husband, it's also possible that your husband can file alone without you and accomplish getting a great deal of relief for the two of you. Ask the lawyers you speak to about this in your case too.

      Hang in there - things will get better! Keep asking questions and venting any time you need it - that's why we're here!
      I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

      06/01/06 - Filed Ch 13
      06/28/06 - 341 Meeting
      07/18/06 - Confirmation Hearing - not confirmed, 3 objections
      10/05/06 - Hearing to resolve 2 trustee objections
      01/24/07 - Judge dismisses mortgage company objection
      09/27/07 - Confirmed at last!
      06/10/11 - Trustee confirms all payments made
      08/10/11 - DISCHARGED !

      10/02/11 - CASE CLOSED
      Countdown: 60 months paid, 0 months to go

      Comment


        #4
        Thank you so much! I feel a little better now that I've posted. I feel so ashamed lately. I never made a late payment prior to last month in our entire 12 year credit history. It just seems like such a shame to lose our perfect credit rating that I've spent years building. What happened to start this terrible spiral of debt was a few of our credit cards decided that something was wrong with our credit and raised our rates to 29.99. We had about $20,000 in debt combined on the these two cards, Chase and Discover at the time. Our FICO score was in the 700's and we were paying way more than the minimum on the cards each month (about double the minimum). The month before this happened, we bought the new vehicle to replace our 1989 rusted out van and the car dealership gave us 1.9% financing. We don't know why Chase and Discover raised our interest so high, we were never late on a payment, our FICO score was good, and we paid more than they asked each month. The extra interest started the terrible descent into the situation we are now in.

        I still don't understand. If they thought we were having trouble paying our bills, why would they raise our interest? We weren't even really having trouble paying anything until that happened. They never gave an explanation except to say that it was based on something in our credit report. We obtained copies of our credit report and there were no lates or derogatory items on it. Over time, some of our other cards did the same thing to us. Citibank charges us nearly 33% interest. This basically killed us financially. There is no way that we can keep up with the minimum payments at these rates. I just used an online calculator and plugged in the amounts of interest charged versus what is owed and it says that if we pay $2000 a month in payments, it will take 113 months to pay it off. We don't have that kind of money right now. My only hope is that my husband can find a better paying job and that the credit companies will lower our interest and payments until we can get on our feet again. Has anyone on this board been successful with this?

        I feel like a failure. My mother told me that she was once in $35,000 worth of debt and paid it off with a minimum wage job that paid $2.95 an hour at the time. I don't see how this is possible, but it makes me feel worse. She would be mortified if I filed for bankruptcy; they publish it in the papers around here and all of her friends would see.

        We live very modestly. We haven't taken a vacation since our honeymoon in 2000. We have old furniture. The only nice thing we have is our vehicle. I don't have any jewelry, not even a wedding ring. It only cost $60 when we bought it and while I was out shopping a few years ago, it slipped off my finger and I never was able to find it. We never replaced it. We have no health insurance and I haven't went to the doctor or dentist in over 10 years. Two years ago, I grew out all of the layers in my hair so I no longer had to get it cut at the salon. I haven't bought new clothes in probably five years. Things I did charge over the years include necessary things for the house, repairs, groceries, and gifts for the kids (just regular Christmas and birthday gifts, nothing extravagant). I don't care about material things, I just want piece of mind and to have this paralyzing fear over with. I would be afraid to ever get another credit card.

        I haven't used our citibank card in over 5 years. The original balance was $10,400. After 5 years of $250 a month payments, I still owe $10,000. How can that be?

        I'm embarrassed to go to a lawyer because I feel like he's going to think we're stupid and irresponsible. Plus I can't stop crying when I talk about it and I'd be too much of a wreck to even talk.

        Also, the two credit cards that we used recently, should we continue to make payments to them so they don't object if we do have to file? I'm going to check out some of the links that were provided to me by Lrprn and see if I can make some sense of this mess. This is a great board and very non judgemental.

        2ndchancegirl, its great that you found a good attorney to accept payments! That is probably a relief for you. I hear that it is expensive to file chapter 7; I don't know how most people could afford that without payments.

        Comment


          #5
          Originally posted by Lindsay View Post

          I still don't understand. If they thought we were having trouble paying our bills, why would they raise our interest?

          My only hope is that my husband can find a better paying job and that the credit companies will lower our interest and payments until we can get on our feet again. Has anyone on this board been successful with this?

          I feel like a failure. My mother told me that she was once in $35,000 worth of debt and paid it off with a minimum wage job that paid $2.95 an hour at the time. I don't see how this is possible, but it makes me feel worse. She would be mortified if I filed for bankruptcy; they publish it in the papers around here and all of her friends would see.


          I haven't used our citibank card in over 5 years. The original balance was $10,400. After 5 years of $250 a month payments, I still owe $10,000. How can that be?

          I'm embarrassed to go to a lawyer because I feel like he's going to think we're stupid and irresponsible. Plus I can't stop crying when I talk about it and I'd be too much of a wreck to even talk.

          Also, the two credit cards that we used recently, should we continue to make payments to them so they don't object if we do have to file? ......... This is a great board and very non judgemental.
          CC companies have odd rules. You get too far in debt to other Creditors and they jack your interest rates. Make a late payment to another Creditor, and they jack your interest rates. It's all part of the Universal Default clause.

          You can't make financial decisions based on hope. Hope that you'll land a job at Target or Wal-Mart. Hope that Hubby will land a better paying job. You need to deal with your situation in the here and now. If things change and life gets better down the road, GREAT! But you've got to plan for now based on your current means.

          Parents exaggerate. Mom may have paid off some level of debt on a minimum wage job. But it's pretty unrealistic that she paid off $35K with a $3/hr job. Our minimums on 9 CC accts were nearly $3K/month. $5.15/hr, 40 hrs/wk, doesn't even add up to $3K/mo Gross. So take Mom's comment with a grain of salt.

          You still owe Citi $10K because,.......... Every month, when you pay that $250 payment,.......... $245 is interest and $5 is principal. Or some such silliness. Take a good hard look at your statements. The statements tell you how much of your payment is applied to interest and how much to principal.

          Whether or not the recent charges will be an issue depends on a lot of things. The attny you choose to work with. The total $$$ amount of the charges, line of credit by line of credit. How aggressive the Creditors want to be. You'll just have to ask attnys in your area how those charges will be viewed.

          Our BK was published in the paper nearly a year ago. We live in a small town too. Nobody has ever said, "Oh, BTW,......... I saw in the paper where you filed BK." If you'd sign up for a PACER acct and search your friends, relatives, and neighbors names, I'd bet you'd be surprised to learn who you know that's already filed BK.

          You've got to do what you've got to do for the financial, mental, and emotional health of your family.
          Last edited by SinkingFast; 07-23-2007, 07:58 PM. Reason: math error
          Filed Ch 7 - 09/06
          Discharged - 12/2006
          Officially Declared No Asset - 03/2007
          Closed - 04/2007

          I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

          Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

          Comment


            #6
            ##
            Last edited by SecondChanceGal; 03-02-2008, 10:36 AM.

            Comment


              #7
              Just met with a potential lawyer today...he reminded me that Bankruptcy is not a punishment and it is merely a financial decision. I knew this from the forum of course, but it was news to my wife. He pointed out that bankruptcy law is 400 years old...I didn't want to point out that I think it is even older than that since it is based on Jewish law. Also, I think he is jewish, so I didn't want to start anything and look like an idiot if I was wrong. He did give us a little psycho-babble about how we tend to punish ourselves more than others actually punish us, but overall, he seemed like a good guy. Look on the bright side, at least you can file a chapter 7. Good luck.
              Leftyf
              Filed Ch 7 - January 29th, 2008
              341 - February 29th, 2008
              Discharge - June 20th, 2008
              Closed - October, 2008

              Comment


                #8
                Lindsay

                My god, you sound so much like me a few months ago. I was TERRIFIED to meet a lawyer & thought he would tell us flat out we are IDIOTS. Fact was, they were all calm, cool, rather unexpressive and down to business. They ask the basic questions, ask for paperwork, and thats that. I expect still that the trustee may make my Dh & I feel like dirt, but oh well. I will get a long shower when done. Ive grown much tougher skin in the last month especially. Before I was reduced to tears instantly.
                Much of our debt we cant even remember what we spent it on. It was living on CC, & using cash to pay minimums. We had a few emergencys. Our furniture & belongings are junk to most people. What few decent things we have have pet, elderly parent and kid damage. I feel ya. No health insurance here either except for the kids. We couldnt afford $950 a month for a basic HMO.

                Try not to worry. I would say Bankruptcy sounds like a better deal for you. Most credit card companies will negotiate for a while, but thats it. Consolidations and reductions are mostly a scam, do a search here about them. If I were you, Id go see a few lawyers for free consults rather than be buried under that debt for the next who-knows-how long. That way, when you get a job later you can work for you and your husbands future, not interest payments.

                Keep us updated. Good luck!
                WAM
                ch7 8/07 CLOSED: 11/07 Rebuilding and saving.
                WAMU unsecured $2,000 Capital One unsecured $500
                PAID OFF MONTHLY!!!

                Comment


                  #9
                  Lindsay,
                  On 32,000 a year in salary, how do you afford 2,000 in payment and a mortgage?...
                  I make almost double that and it's hard for me...

                  Comment


                    #10
                    Lindsay most likely they used the universal default clause. If your balance is to high in respect to your available credit some cards will raise your interest rates. This of course is counterproductive to the cards because it causes you to default.

                    You are not alone in this. We all have had those sleepless nights. Those days of dread when the phone seemed to ring and we became to afraid to answer it, afraid it was another one of those shrill uncaring bill collectors.

                    Bankruptcy is not a punishment, Bankruptcy is an opportunity for you to have a fresh start. It is an acknowledgment that you have erred in the past. It is also an acknowledgment that you have gotten so far in deep that there is no reasonable means for you to come out. Though it gives us the opportunity for a fresh start, it also gives us a penalty. That penalty being it appears on our records for a number of years. However it is still possible to get credit after a BK.

                    I fought filing Bankruptcy for 2 years. It led to depression. I suffered a great deal of emotional turmoil and increasingly isolation due to the fear. It is not pretty. I did early on try to negotiate with the creditors. The problem is you'll get one or two that are willing to work with you, but there is always a holdout or two who are under any circumstances not going to work with you. These will cause such problems that in most circumstances it will be impossible to work out any such arrangement that might avoid bankruptcy.

                    I would schedule several consultations with local bankruptcy attorneys. Do not be afraid. They will listen to the problem and analyze it according to their learning. I have found mine to be very understanding, he did not call me an idiot or anything else. He was very business like in his questioning and advice. I think yours will be too.

                    Once you've had the consultations, sit down as you are better informed and discuss it as a couple. If you are inclined, kneel together and pray about it after you discuss it. Explain what the situation is, the advice you have received, and put forth what you plan to do and ask if it is right.

                    Bankruptcy is much like the mercy of God, offered to those of us who have erred in our ways. We sometimes are to stubborn to realize that, I wish I'd realized it a few years ago.

                    I wish you peace in this troubling time of your life.
                    May 31st, 2007: Petition Filed by my lawyer
                    July 2nd, 2007: 341 Meeting Held
                    September 4th, 2007: Discharged and Closed.

                    Comment


                      #11
                      Originally posted by Lindsay View Post
                      I feel like a failure. My mother told me that she was once in $35,000 worth of debt and paid it off with a minimum wage job that paid $2.95 an hour at the time. I don't see how this is possible, but it makes me feel worse. She would be mortified if I filed for bankruptcy; they publish it in the papers around here and all of her friends would see.
                      Stop worrying what your mom might think. Mine does the same thing, so I quit talking to her about it. Last I talked to her about it was when I was considering CCCS. Now I found this board and became more aware of what bankruptcy is, and I feel more comfortable with it. My wife and I have an appt. this Friday to see an attorney.
                      My parents have no idea I am about to pull the trigger on this bankruptcy thing, and I feel better that way. You have to do what right for you and your husband, not your mom!! You will feel more comfortable just leaving her out of the loop on this. You don't need the discouragment.
                      Filed Ch7 - 10/2/07 no asset
                      341 Meeting - 10/29/07
                      Discharge - March 2008 forgot the date

                      Comment


                        #12
                        Lindsey,
                        All of us on this forum have been thru the guilt, the "kick myself in the butt", anixiety, panic, and what am I going to do now part of bankruptcy. We have been embarrassed, humilated, and hung our heads in shame. Most of us were taught, you 'pay your bills'........

                        Filing bankruptcy is a "business decision", and not a life threatening one.....like the worry and fear of how am I going to make ends meet.

                        So its time to "suckup you pride", take your heart off your sleeve, get out a box of kleenex, and start getting your life back in order. Time to take control of your life, make financial decisions, and get your life back on the right track...

                        Consult with at least 3 attorneys, get an idea of what your up against, cost involved for you, and what you can salvage out of what you do still have.

                        Believe me, it will be WELL WORTH IT..... in the end.

                        Who care what others think, they don't walk in your shoes, or pay your bills, and if the truth was known, many of them have filed in the past.....

                        Filing bankruptcy is not a disgrace, its a given "right" granted to us by our forefathers who fortunately understood that life plays it tricks on us, sometimes we aren't as wise about things that we should be, and medical problems do pop up and life goes into a spiral downhill.

                        Be thankful that our forefathers left this "route" for us to take if need be. Very prominent people have filed bankruptcy from Presidents, to dignataries, hollywood personalities, right down to the everyday joe like you and me.....

                        After you file and get your life back in order - THEN KICK YOUR BUTT if you ever find yourself doing the same ole thing again!!! Then shame on you......

                        But right now, take the 1st steps towards a new fresh start in your life.....and get the ball rolling....

                        You won't be sorry.....
                        Minny

                        "It's amazing the paths that our feet sometimes follow in life".

                        My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

                        Comment


                          #13
                          Originally posted by SinkingFast View Post

                          Our BK was published in the paper nearly a year ago. We live in a small town too. Nobody has ever said, "Oh, BTW,......... I saw in the paper where you filed BK." If you'd sign up for a PACER acct and search your friends, relatives, and neighbors names, I'd bet you'd be surprised to learn who you know that's already filed BK.

                          You've got to do what you've got to do for the financial, mental, and emotional health of your family.

                          As I have just found this out recently, it is the truth. I am guessing that out of the 20 people I know and am somewhat close to, (family, friends, coworkers, neighbors etc.) out of 20 of them, 18 have filed for a BK because there was no other way for them to make it.
                          And the emotional part - So far only one person has even tried to make me feel guilty for even thinking about it and I told them to stop trying to make me feel guitly about something (my accident that I cannot pay medical for) that I never intended on happening.

                          Comment


                            #14
                            Originally posted by Minnymouth View Post
                            Lindsey,
                            All of us on this forum have been thru the guilt, the "kick myself in the butt", anixiety, panic, and what am I going to do now part of bankruptcy. We have been embarrassed, humilated, and hung our heads in shame. Most of us were taught, you 'pay your bills'........

                            Filing bankruptcy is a "business decision", and not a life threatening one.....like the worry and fear of how am I going to make ends meet.

                            .....
                            You speak some good heart felt words, Minnymouth. I was feeling at odds this morning & then started crying about what is happening. I read your post & my tears changed to a happy cry & snapped out of the humiliation. BK is actually something we can be thankful and appreciative for, if/when people ever need to use it.

                            Comment


                              #15
                              Bandit,
                              Since you have previous medical bills are you facing more in the future? If so, were you filing separate or you and your spouse filing together?

                              Sometimes I may sound real harsh to some of the members, but somebody has to "kick us in the butt" and get us going in the right direction. I know they had to ME.......

                              Yes, bankruptcy is a "business decision"...... even though it still affects us mentally, emotionally, financially, and physically if we let it....

                              Filing bankruptcy is like an "old friend" helping us out of our situation..... they are offering the helping hand!! We should count our blessings that the offer is there.....

                              Keep us posted on what you do.....

                              Chin up, smile, better days are ahead in the future, and things will straighten themselves out if you take control of the situtation.

                              Minny
                              Minny

                              "It's amazing the paths that our feet sometimes follow in life".

                              My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

                              Comment

                              bottom Ad Widget

                              Collapse
                              Working...
                              X