Confusion-No logic-Numbers don't add up

[ccsjoe]

It is tod, it is quite nice to finally treat yourself a little bit.

[tod183]

I thought I was just bad at my budgeting. I couldn't figure out where that extra money was going either! I ended up giving up a car ($380 a month) in order to file. I've got one more payment to the attorney left. It will be nice to be able to keep that money!

[ccsjoe]

SAME HERE. When i filed (or should i say...when attorney said, stop trying to pay CC's). Payments had grown to around $1300-1500.
Can't remember exactly, think it was just a bad dream. Those payments being made on income anywhere from $35. to $1500. a month.

I had a limit on Chase of 22k with a balance of $900.
Thought OK i can keep my head above water for another yr or so. Work WILL get better, more jobs will come along.
I also thought it was my emergency fund. After being late on citi ( 1 hr late) it took 1 month for my "emergency" fund to go POOF, and it was then less than $100.

I know what you mean. Available credit became emergency fund then became available cash via some hallucination of floating our lifestyle, then got cut, etc etc....never again. We are still tight now because we substituted cc payments with catch up IRS witholdings plus health insurance. Come January, catch up IRS witholding will drop to normal, so we will have some breathing room again.

[oregonpilot]

SAME HERE. When i filed (or should i say...when attorney said, stop trying to pay CC's). Payments had grown to around $1300-1500.
Can't remember exactly, think it was just a bad dream. Those payments being made on income anywhere from $35. to $1500. a month.

I had a limit on Chase of 22k with a balance of $900.
Thought OK i can keep my head above water for another yr or so. Work WILL get better, more jobs will come along.
I also thought it was my emergency fund. After being late on citi ( 1 hr late) it took 1 month for my "emergency" fund to go POOF, and it was then less than $100.

[ccsjoe]

Exactly. We'd barely scrape by floating on our cards, so that when we finally got an increase we immediately went on a shopping spree to buy stuff we'd been putting off (and a few too many goodies). It was even worse when we were in school because then we'd use loan money (maxed out every semester) to pay them down a little so it never seemed that bad. Of course, then we stopped getting credit increases and the loans went into repayment status... and here we are.

This is all too familiar, I must admit. Combination of job insecurity/changes with varying income and some bad choices along the way as well.

[Lockeout]

For me, I just started see the open credit limits as money. I didn't start that way, but somewhere along the way, the credit limits started feeling like money in the bank to me, since it was available to me at a moment's notice.

Exactly. We'd barely scrape by floating on our cards, so that when we finally got an increase we immediately went on a shopping spree to buy stuff we'd been putting off (and a few too many goodies). It was even worse when we were in school because then we'd use loan money (maxed out every semester) to pay them down a little so it never seemed that bad. Of course, then we stopped getting credit increases and the loans went into repayment status... and here we are.

[discouraged]

I started wondering the same thing myself and then realized - when I was laid off (am now just working tempoary) I cashed in my 401K and had 6 months savings which I depleted and used all my income tax refund to pay bills. Eventually all that extra money dried up and I realized I could no longer pay anything nor did I have anything as back-up. That's when it finally hit home.

[backtoschool]

For me, I just started see the open credit limits as money. I didn't start that way, but somewhere along the way, the credit limits started feeling like money in the bank to me, since it was available to me at a moment's notice.

I took a couple of extra trips each year, bought things I didn't have the cash for at the moment, and because I got large bonuses from work, I was able to continually pay off the balances all at once, only to start racking them up again. This went on for years. It was only when I lost my job and wasn't going to get a bonus anymore that I finally faced reality. I was faced with either scrambling for another job that I would hate in a profession I hated, only to pay my credit card bills, or jumping off the train, preparing for bk and starting over in a different place and a different profession. I realized what a trap I had built for myself and gotten myself into. I decided to jump off the train and start over, and the rest is history.

[LaurieM]

This is the exact thing that we spend a lot of time discussing with our clients before they file bankruptcy... what is it the underlying reason for the incurred debt? There are only two ways to improve one's financial situation - increase income or decrease expense. If nothing about your regular monthly income/expenses has changed since you filed... you're not going to feel the difference long-term. If you were using the credit cards to make ends meet, the cycle will start all over again unless something significant has changed since your filing. This is why we often recommend ppl give up homes, cars, campers etc which they cannot afford. Having said that there are just some budgets that you cannot decrease (sometimes it's regular medical expenses, high student loans etc which are the underlying problem)... that being the case, the only fix is increased income. I would be happy to look any one of your monthly expenses and offer suggestions if that's something any of you would be open to. (I am a certified credit counselor, among other things)

[ccsjoe]

Poetic, how poetic. Increse credit limits to someone about to file bk....lol

[Okieblue]

Yes, exactly! We were paying out $1300 in cc's and loans, therefore, I should have plenty of money to start this ball rolling, right? Wrong! When looking at my credit report today, I see a couple cards gave us increases. Dillards an extra hundred and a visa card upped it by $5K, oh my.

[ccsjoe]

Yep. This is what happened with us as well. For so long we used the open credit to buy the necessities (food, gas, even pay the utilities, repairs on the cars etc...), and then all of our money went to pay the cc's. When the cards were maxed, or close to it, the cycle had to end.

Believe it or not in my case we carried this cycle for almost three years actually thinking we were going to start paying down the cards "next month". Talk about hallucinating.

[JEM]

I have to agree except for one compounding factor in my case-All our credit cards were maxed out, so there was no open credit to make ends meet from.

Yep. This is what happened with us as well. For so long we used the open credit to buy the necessities (food, gas, even pay the utilities, repairs on the cars etc...), and then all of our money went to pay the cc's. When the cards were maxed, or close to it, the cycle had to end.

[gpolly123]

Hi, we have yet to file and I have been trying to figure out how we made almost $1500.00 month in cc payments when I can barely pay my bills and feed my family without making those payments. I think that we used every penny of available credit each month and kept thinking I would get more children enrolled in my family daycare and that would solve everything. Well thats not happening and we can barely make the payments to our lawyer for his deposit. I still have to figure out how to show enough income for our 13.
Cathy

[Freddy03]

Almost the same boat here but before I stopped paying the cc I would pay each of them an extra 20-30 dollars and then when it was time to put gas in the cars, dr copay, something the kids needed it went right back on those cards. So once I stopped paying them and started paying for things in cash something always happened (ie: new tires, ac repair, eye glasses, etc) that would always put us behind.