Browse Month by October 2016
Deep in debt

Desperately need assistance!!!

Hello:

I am new here and am in need of a lot of help. I am a stay-at-home mom to 4 boys. My husband is an engineer who has a fantastic job and is compensated very well. Here’s the problem: despite the amount of money he makes (about 100K) we still struggle from paycheck to paycheck. We have about 6 credit card which are all maxed out. We have 2 kids in braces which we are struggling to pay, we have about 30K in unpaid medical bills, school costs, etc. etc. We literally don’t know how we are going to put food on the table from week to week. We don’t take vacations, we have cut way back on eating out, we watch our electricity use, water use. We just don’t know what to do at this point. My husband borrowed 8K from his 401K in November to help pay bills, which we did, but we still are struggling.

I am not able to get a job due to some health problems I have. I’ve thought about credit counseling but I am not sure that is the way to go. We don’t want to go the bankruptcy route but what other options do we have?

Can anyone help me?

If you saw smoke coming from under your door, you wouldn’t wait to see flames before calling the fire dept. Bankruptcy is not the end of the world. Sometimes a fresh start is needed. You can always repay creditors you have listed on a bankruptcy once you are back on your feet. Once discharged though, you will have no legal obligation to do so.

I remember seeing Oprah a few months back and ppl were in diffs. But like you, they earned well. Forgive me, but what school costs? Do they HAVE to go to private school?

How else are you trying to save? No meals out is one thing, but it sounds like you’re going to have o go totally bare bones for a couple of months.

To be honest, I only live on about $12,000.00 a year. Granted, I do not have kids or braces or school, and medical bills are not in my picture, but to have 100 grand a year would be absolute BLISS to me.

Its amazing how it happens when u use credit, we all know this now. I would try talking to your bank about a consolidation loan, they will take all your bills (credit cards etc) and consolidate to one lump sum each month, will be less then what you are paying now but all the companies will be payed off and you will just have to pay the bank each month, we got ours with a good rate too so thats helps. I would go talk to the bank. Im not sure about medical(Im in canada) but they might be able to add that in maybe and dental that you owe also.

Stop for a moment and breath. Stop saying should have, could have, would have. None of this will help. Cut up your credit cards, or put them in the freezer, you will never get ahead if you continue to add to the debt. Write down everything you owe on one sheet of paper with payments and interest(smallest to largest, by interest rate).

Then write down how much you need to survive, House(electric, heat,water, insurance, taxes), Food, clothing, medical, now continue with the cable, the phone, the cell phone, transportation (car loans, insurance, plates, maintenance) tuition, etc..what ever you spend. What are the totals. The idea is spend less then you make. Sounds simple enough, right..it’s not.

Before you run to the CCS or lawyer you have to figure out what you owe, secured VS unsecured. What you feel you can pay. With your income you’ll find you will be a chapter 13 BK case, you’ll pay back a certain % amount( they figure this out by doing the above) over 5 years (your 401k loan isn’t dis-chargeable or included in this amount, it will remain separate, school loans are also not dis-chargeable). So fresh start for you would probably start in 5 years.

I suggest you go get a book from the library, Dave Ramsey “Total Money Makeover”, or “Financial Peace”.

There are other authors, but I like how he says things.

It will be okay, there are a lot of people on this site “who have been there done that”, so they can help, they give good support and advice, you get to decide how to use it.