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5K views 44 replies 27 participants last post by  dianne9106 
#1 · (Edited)
We've gotten to the point that we cannot make it anymore. When I first joined in 2006 we were making small strides paying down our debt and building some savings. DH's last pay increase was in 2006, in 2007 they cut pay raises, in 2008 they cut hours, in 2009 & 2010 they increased employee contributions towards healthcare. Through all of it I've been grateful that he has been able to keep his job and we have made adjustments and cut back. But, we have also been hurt by several other things such as the credit card companies more than doubling our interest rates in July 2009 (the month before the new credit card rules went into affect) and then DH's work switching to a weekly pay from bi-monthly totally messed up our budget.

We've gotten to the point that we have burned through our savings and I just.can't.juggle it anymore. I'm stressed out, suffering from chronic headaches and am depressed. I've come to the decision that I am going to have to temporarily stop paying on one of the credit cards just to keep us going. In four months the van will be paid off and we can reduce the car insurance, which means I should be able to resume credit card payments in March. We have not used the credit cards since the spring and they have been locked away. But, I'm having a hard time with it morally and with the in-grained belief that I have to keep our FICO score high (over 800 before all of this started). I HATE, HATE this option but I don't know what else to do.

We don't have anything to sell, our furniture is all hand-me-downs, our electronics are old (in today's terms), the only jewelry I own are my engagement/wedding rings and a pair of small diamond earrings dh gave me for my 30th birthday. I've looked at employment opportunities for me and there is nothing that works right now, though I keep looking. DH is finishing up his 'summer' extra work that has allowed us to keep afloat so far this year. Unfortunately, it isn't something that can be continued in the winter. He is looking at other options also.

A quick run down of our finances for those money crunchers and in case anyone has any suggestions.

Take-home Income ~$710/week or $2840/month

House Payment (w/escrow) $900
Home Equity Line $100
Car Payment $300 (paid off in February or earlier if I get Christmas money)
Car Insurance $100
Utilities (elec, water, sewer, trash) ~$220
Nat. Gas $72
Internet $41
Home Phone $27
Cell Phone (2 phones) $30
Netflix $9

Total Bills: $1779

Credit Cards:
Discover Card $270
Visa $380

Total Credit Card: $650

Combined: $2429
Difference: $411

I've got our grocery bill down to $450/month, including HBA & dog food (using DH's summer pay to buy groceries). We also need $260 per month for gas, as DH drives 70 miles/day to & from work and I need gas to cart the kids around.

What do I need to do? And, if I stop paying on my credit card (just the Visa) what can I expect to happen?

Please be gentle as I am in a fragile place and very depressed already about what we have done in the past to put us in this situation.

TIA
 
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#2 · (Edited)
$710/week or $2840 per month isn't entirely accurate if you're calculating that number using a current pay stub's check total of $710, and just multiplying it by 4. (There's about 22 weekdays each month, not 20, and it adds up to an "extra" check every few months...this month, December, and again next April)

$710 X 52 weeks in a year = $36,920/12 months = $3076

I'm not sure if this makes you feel better or worse, but $236 "extra" per month is SOMETHING.

So if I have this right, you've got $2,429 in bills/loans, $450 in groceries, and $260 in gas.....$3,139, just $63 more than your monthly take home.

Get rid of the Netflix, trim your groceries down (cutting meat consumption will help dramatically) as far as you possibly can and you might just be able to hack it until March when your van is paid off. A $300 payment gone and lower insurance premiums and you'd be good to go. Unless of course I missed something important in your post.
 
#3 ·
Amy,

I don't know what to say except that I'm sorry the way things are going for you. I understand about the financial stress and the depression. Keep your head up! Even when things happen that we don't understand God is with us and he we help you and your family and show you the way when the time is right.

Try to stay positive for your husband and your three precious little girls and your sweet little boy they need you to stay strong for them.

Are the credit card companies willing to work with you?
 
#6 ·
Thank you.

The credit card companies were not willing to work with us in 2009. Maybe once I'm late they will be more willing. I'm trying to decide whether to contact them and give them a heads-up, but it is BOA and I have always gotten the run around when I've tried to deal with them.
 
#9 ·
I check craigslist daily, and will keep doing so.

And, unfortunately, yes those are the minimums on the credit cards. For years we had low interest rates on our credit cards <10%. In July of 2009 they both moved the due date on the payment up by 2 days from the days they had been due for 5 years. I was out of town that month and had my bills set up to be paid electronically so I missed the due dates. The next month our credit card rates jumped to 27% and 29%...both companies refused to work with us and other credit cards wanted fees to move the balances. Amazingly enough in August our due dates went back to their original days and have stayed there.

The Visa is almost all medical & dental, but last winter I started using it trying to just make it to the end of the month. When DH's company froze pay again I figured it was a losing proposition and locked away the card.
 
#5 ·
I know...the $710 per week is an estimate. Our monthly income from DH's full-time work has fluctuated these past few months from $2700 and $3000. I just wanted a fixed, medium number to work with.
 
#8 ·
Amy,

I am so sorry things are so tough right now. I know it is hard to see the light at the end of the tunnel but it is always darkest before the dawn. Sending blessings your way.

Before the number crunching, with the amount you are making would you qualify for food stamps or other benefits that might help you out? I have been hearing for many states you can apply on line now.

Hugs,
 
#10 ·
Get rid of internet/homephone/nexflix and there is an extra $77. If you can do it, I personally wouldn't miss making a credit card payment....you are looking at crazy late fees and penalties. Also, when you credit score gets worse, they credit card companies have the right to raise your APR..(or at least they use too).

Good luck and hugs to you! Just keep working...you are almost thru with the van payment which will be hugh to your revised budget!

Vanessa
 
#11 ·
I know things are really hard right now, I hope the credit card companies can work something out with you. I know it won't be much help, but if you go to shopathome.com, maybe you could get your grocery bill down a bit more, they have a lot of coupons that can often times be doubled. God bless you all and I'll be praying for you. Please let us know how your doing!
 
#13 ·
Is it possible to cut the home phone? I would go without the home phone before the cells, especially since your husband travels 70 miles daily.

Can you cut or suspend the netflix?

If at all possible, I would try to do those things before not making a payment to the credit card companies.

I wish you the very best of luck.
 
#15 ·
It's been my own experience, when my husband lost his job and our CC payments were late, a couple of CC companies gave us a reduced payment for up to 3 months. I know how hard it is to deal with this situation. And from the sound of it, you and your dh are doing everything possible. But do try to call the banks and explain to them your situation. It's probable that they'll work with you if they think they won't get a payment for a few months. Afterall, you ARE going to keep paying. You just need a short term adjustment. Of course this MIGHT hurt your FICO score, but believe me, after having an 800 something score, we were reduced to nothing. But, it was just a matter of about 18 months before we had a score up in the 700s again.

And remember, you already have your house, your car, and you're not looking to get anymore CCs. So if your score should drop, there's not much to worry about, because you really don't NEED that high score to get anything right now. I got over worrying about what that score meant. We were in dire straights, and I needed to worry more about the roof over our heads, and food in our bellies! I read things, and it's almost as if people think that FICO determines you as a person. :(

So please try not to let that thought bring you down. You seem like the type of person who will manage this, and come out of it all okay! It's not like you're trying to pull anything on them. So please, take a deep breath, and take one step, and one day at a time. Write down a plan of action. You might even call your mtg company, and see if there's a way for them to help you out on a temp basis if the banks for the CCs don't come thru for you.

I'm so sorry you're feeling so sad sweetie. But there's a solution out there for this problem. It's going to take alot of talking, but you'll make it work. The main thing is, that you'll call them before they call you, kwim? Hang in there, and HUGS to you!

I hope you'll get more ideas from the other members. This was just from my own experience and opinion.

Theresa :)
 
#16 ·
You have already gotten good advice. It sure can't hurt to try to work with the credit card companies. I'm sure some where on here is a how too of advice.

I agree with seeing if you can cut the groceries a bit. We are a family of 2 adults, two teen boys, 3 cats and 3 dogs. I usually budget 400 a month but have kept it under 300 recently. It takes a bit of planning and no convenience foods.

Any chance you can find cheaper internet?

Hang in there! Your paid off car is right around the corner! If it comes between the CC's and the basics to survive I would let the cc go.
 
#18 ·
Thanks everybody. About the phone/internet/netflix, Dh and I have discussed cancelling the phone service. But we need to keep the internet as I do homeschool and we use the internet a lot. We have a locked in rate of $41/month for highspeed, unlimited broadband which is the cheapest I have found in my shopping around for other options. We also use the internet in trying to find jobs, deals, well just about everything. I think, in the end the internet actually pays for itself. Netflix is $9 a month, we use it for school and well if $9 was the difference I needed then it would be gone.

But, figuring in groceries and gasoline we are at approximately -$300 for the month.

On a good side, I just sent an email off to a job possibility that popped up this afternoon. It is a long-term part-time position that may work.
 
#19 ·
On a good side, I just sent an email off to a job possibility that popped up this afternoon. It is a long-term part-time position that may work.
Good luck, but keep looking everyday in the morning and afternoon. In the times we are in, you need to be first in line for these jobs and be at the right place at the right time. I know with a busy schedule it's a lot of luck being there but that's what it takes.
 
#23 ·
I am surprised you don't know your weekly take home?

Hope it gets better!
I use Quicken already, but thanks.

Our weekly take home fluctuates depending on DH's hours to the 15 minutes. He is not salaried and his hours depend on work load. I took a couple of months worth of paychecks and determined an average weekly amount to work with in our budget. And, remember that number is really only good through the end of the year. We've been told that health insurance is going to increase another $80/month and everyone is going to get hit with tax withholding increases beginning Jan. 1.
 
#25 ·
Ok, gonna be the odd one out to a degree. The last thing you need to worry about is a stupid FICO, unless you're planning on going further in debt.
Bank of Hell ( BOA ) will not work with you. 99.9% sure. If you have read ANY of my threads you will understand why I feel that this is true..Add to the fact that we filed bankruptcy April 27th and last week a collection agency called because Bank of Hell sold a credit card debt to them. Long story.
9 bucks isn't going to make it or break it unless you cut one or more of the other so called luxuries.

I think the original question is what will happen if you quit paying on the card. Bank of Hell is nasty. They ( and all the rest but they are really bad ) will call from 8 in the morning till 9 at night. Quite frankly on advice from our lawyer, can the Netflix at 9 bucks invest in an unlisted number with call waiting.

In 6 months it will get written off and they will ( probably, no guarantees ) be willing to settle for a lesser amount which depending on how much you owe after all the late fees and jacked up interest will still be something you can't afford. The amount that you didn't pay, the rest will be considered income by the IRS and Bank of Hell will issue you a 1099C for cancellation of debt. You will be required to pay income tax on that amount. Unless it is a drastic amount it shouldn't be much. It is at your standard tax rate current.

Me, if I were looking at only 4 to 5 months I'd suck up some lost groceries, the netflix and since you apparently have more than cell phone, ditch one. Running the kids around? Run them a little less a month.

4 to 5 months of uncomfort and it being over isn't worth the hell you'll go thru.

We not only got rid of Netflix, but the TV period for about 1 1/2 years. Library DVDS and yes there are ones that can be used for homeschool. Friends loan. It's a matter of priorities. That cell phone, Netflix, cutting some groceries in 4 to 5 months time will save you about $300 to $400 in late fees and even higher interest rates.

And yeah, the kids will moan and groan...take me, take me, let's put another 10 to 20 in gas...Mine did...shes on the couch right now ...alive and well.

Been there and done that....bought the tee shirt

Don't mean to be harsh, hope it didn't come out that way, but you have to figure out which is more important...insanity or scrimping to see the light at the end of the tunnel.
 
#26 ·
I don't know what it is, but after weeks of wringing my hands and trying to figure things out...and nothing. I finally broke down and posted on here (yeah, I really didn't want to do it), and it has motivated me. I want to thank everybody for their time in reading and replying to me.

So, this afternoon I responded to an ad on craigslist. Maybe it will work out, maybe it won't. But, it was the first ad in weeks that even looked like a fit.

I also went to BOA's website and checked some options available on the credit card. There is an option for a reduced payment period. If I can get that I can continue paying an amount we can afford and not be charged any late fees, although interest would continue accruing. The other option is to convert the credit card to an unsecured loan, but that may not reduce payments. I am going to call tomorrow and see what they say.

I went to the Discover Card site and they have similar options, but I think if we can do something with the Visa, then I can leave the Discover as is. I did move our due date to later in the month so it doesn't fall the same week as the house payment.

I also reactivated my ChaCha account. I don't enjoy doing it, but it is a relatively easy way to make $20-$30/week towards groceries. Of course it has been so long I'm going to have to call to get a new pin number for the debit card.

It feels good to have a list to do for tomorrow.
 
#41 ·
Hugs! You are really making progress. Things will get better for you, I am sure!!

And about ChaCha...I am a guide there to but stopped doing it over a year ago because I was making around $1 an hour. Is it any better now?? I sure could use an extra $20 a week...not not if its going to take me 20 hours ya know?
 
#27 ·
You have a plan and a goal! If plan A dosen't work...go to Plan B. Good luck with both and wishing you the best.
 
#28 ·
some banks have mortgages and car loans that feature "skip a payment". They're usually not a good idea, but doing it so your ccards don't go in arrears is something I would look into. If your bank let you skip a house payment, that should be enough to get you til about Feb..
as for drumming up extra income.. how bout marketing yourself as a senior sitter or somone who takes them to the doctor and groceries.. or doing afterschool care.. you get gypped on full day care but around here they charge 75% of full day just for after school care.. round up a herd of students, and voila. Just 2 students would give you $600 a month.
 
#29 ·
Well, I made some headway today. I spent an hour on the phone with BOA. The end result wasn't really what I hoped for, but about as much as I expected. I closed the credit card and converted it to a loan, reducing the interest rate. It lowered my payments to $300. Still not really enough for any relief, but progress.

I moved on to plan D. My mom offered to pay off the van about 9 months ago. I've put her off, mainly out of pride. We got ourselves in the situation and really wanted to get out of it ourselves. I called her today and she will put the money in our account tomorrow. So, we are going to pay off the van this month.

I feel pretty crummy about it. Although my parents are always willing and offering to help, I do hate to take it.

I've worked for a couple of hours today and am going to have several hours tonight that I can work without interruption. I also need to sit down and rework the budget with the new information and figure out the next step. Definitely we will start rebuilding our savings account.
 
#33 ·
First, let me say that I hope things do get better for you all soon! Situations like this are rough on anyone. :(

Now, to take a look at your budget and what you have:

1) I agree with others in that you should cut the home phone, the Netflix and any other extra thing you have.

2) You say that you need to cart the kids around. Without having looked at other responses beyond the first page, where do you take the kids to? Are these places that they can either get rides from friends? I think that would save you a lot of money right there if you could find other ways to get them from point A to point B.

3) Is there any way whatsoever that you can get any part-time job? I know that in NC, their Department of Social Services offers subsidized daycare for families. I was stationed in NC with the Marine Corps and had a great subsidy for my son to be in daycare.

4) With your utilities, I would try to cut back as much as you can. Do you scratch cook at all? Own a rice cooker, a crockpot or anything else that uses less utilities to operate?

5) I'd re-work your menu and look at what your grocery budget is spent on. I spend $500 every month on a family of four and that's with buying lunch for both of the boys. Can you get any health and beauty products or other items from your local church?

My mom always told me when I was younger that the bills can wait as long as you have a roof over your head and food in your children's bellies with clothes on their backs. I'd focus on the dire essentials first; Cut what you absolutely do not need. If you think you need it, but you know you can live without it, get rid of it. :)

:hug2:
 
#34 ·
with the holiday season coming soon many stores are hiring PT help for evenings and weekends.

what kinds of employment have you tried to get .

i see you homeschool and all yours are under the age you can have one babysit if dh is working late socan understand how hard that can get .

do you belong to a church or homeschooling organization where you can offer temporary babysitting services IE not doing it as a full time thing needing a license etc but rather a few hours drop off while mom gets hair done or does some christmas shopping etc .

how about offering to make some cookies - i have a friend who makes extra money this time of year making treats to sell thru friends and her dh work - again not really starting a business so she didnt need an inspection etc just made up a large batch of treats like choc covered popcorn / retzels etc to sell to friends- co-workers.

that may help get you through until the car is paid off and some money is freed up.
 
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