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Discussion Starter #1
So here is wha we've got!

Income 2200$ a month. Thats what my husband brings. I do not work. We have 2 little kids. One is almost 2. And the other one is not even 2 mo yet. I stay home with them because we can't afford the child care. Sometimes there are random bonuses ranging from 400-1200$ a month. But it just depends. Last bonus we saw was in June. So we can't rely on those.

Now the bills

Car and rent ins for both - 145$
Cable and internet - 110$ ( we are getting rid of cable so just internet alone will be 50$)
Electric - 125-165
Phones -145
Rent -900$

Cc1 balance 1270$ min.pmnt. 45$
Cc2 balance 13800$ min.pmnt. 280$
Cc3 balance 6150$ min.pmnt. 140$
Cc4 balance 8200$ min.pmnt. 180$
Cc5 balance 4200$ min.pmnt. 120$ ( was 0% until now with 60$ min. Pmnt)
Cc6 balance 2000$ min.pmnt. 25$ ( 0% apr for another year )

Medical bills

2 of them are set on payments
Balance 765$ payment 30$
Balance 900$ payment 50$

The rest of them don't have minimum payment and are new ( as we just had a baby ) balance on all is 4500$

We were able to keep all of our cc current and up to date. Now with all the new medical bills and considering that my husband hasn't been getting bonuses lately looks like we not going to make it.

We don't have a budget. But I'd say for groceries, baby stuff and gas we would need at least 500$ a month.

I don't really see a way out here. It's either stop paying credit cards ( as we just won't be able to. If to choose what to pay we obviously have to pay bills like rent car ins electric and grocery money ) or bankruptcy

Any thoughts on our situation?
 

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OMG. What in the world did you charge on those credit cards? How old are you two?

I think bankruptcy is about the only way you will ever get back on your feet. I do not know the bankruptcy laws though. I know you can't discharge medical debt.
 

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It looks like you are just squeaking by.

I would go over the monthly expenses and account for every dime in the last couple of months. Look for places to cut. You can't afford even the small luxuries. If you can save $5-10 a week to throw at one of the small CC's you can start whittling it down.

Sell stuff. Have a yard sale or put it on ebay.

It's fall. I don't know where you are but you can go without heat or AC for a month or two. Shut the furnace fan off. Keep lights off as much as possible. Unplug appliances you don't use, etc. Get that electric bill down.

Do you have family or friends who will take the babies one day a week for free or for a trade in babysitting so you can take a job?

How about babysitting for someone else for a little income?

You have a new infant, have you applied for WIC or other services to help you out?
 
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You can do this if you can reduce expenses and try to increase income . Many years ago when we did our debt pay off we began it as a family of 4 making between $24K and $28K. We paid a bit more than $45K so it certainly can be done. It is hard and takes time but is possible. We are older and far away from that now. However I am very thankful we went through it. It made us learn to really work as a couple, brainstorm , learn some dicipline and set us up to know we never ever wanted to be there again.

Like Russ suggested call and see if you can get an interest rate reduction.

Sharing a very detailed budget of spending will also help the villager give you ideas of how to cut your expenses to the bone.

You many also want to check out Dave Ramsey.

Is less rent possible in your area? That is a big amount for your income.

Can you work or do daycare in your home? Giving plasma provides a needed service, free babysitting while you donate and cash for you. There are lots of ways to make a little extra $ on the side.
 

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Daycare is a good idea, but if you're in an apartment it could be tough to do it.

Any chance you have parents that could loan you money and pay back? Maybe set up a contract so they know exactly how long it will take to get paid back.

Or try and go to a bank to see if you can do some sort of consolidation loan...not sure if that actually ever works, but I swear I've heard of it before.
 

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You got to make your pennies squeak. Not one cent goes anywhere without you approving the move. No eating out. No shopping. If you can get a hundred a month for debt you will doing good.

Do you know anyone who is looking for child care? When my son was newborn last year I looked after my friends 2 yr old for 6 mos. Things like this will give your debt repayment an incredible boast.

Christmas is coming up. Great time to ask for cash or gift cards from family and friends. You don't need stuff. You need money.

Sell sell sell. Even if it's a pile of toys you can't get more than a dollar for each. Sell. Put all the money you make on to debt.

Any bonuses your dh may get apply to debt.

No more credit cards. Seriously cut them up.

Pick up total money makeover from the library.

Please look into any assistance with food you can get. Help with your groceries right now will make a big difference.
 

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You have a lot of small debts, and can get rid of them by small amounts of increased income. Sell everything you can, at least one car. Can you or your husband get a (second) job?
 

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Bankruptcy won't help you because you seem to continue spending beyond your means. What do you mean the rest of them are new and total $4500 because you just had a baby?? Having a baby doesn't mean you have to be in debt. Draw up a budget and try to increase your income. Maybe you can work in the evenings when your husband comes home so he can look after the kids.
 

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If you get a tax refund then you need to change your tax withholding so that you get that money now when you could be using it to pay down debt. An extra $20/week ($80/month) might not seem like much but it will really help you payoff your debt.

Phones of $145 - are you under contract? Can you reduce your plan? Maybe to go a pay-as-you-go type phone.

As painful as this is to pay off it is the right thing to do. Plus the pain of paying it off will be a deterrent of getting into the debt hole again.
And if you are a SAHM then your job is to save all the money you can - cloth diapers, breastfeed instead of formula, line dry even if it is inside the apartment, make your food from scratch (buy a whole chicken & cut it up yourself instead of buying it already cut up.) don't buy baby food - make it, keep the lights off, don't drive unless you absolutely have to, combine errands,....none of these alone will make you rich or pay your debt off overnight. It will take time and dedication and creativity. I earn points online at Swagbucks, I then turn the points in for money. The $25/month ($300/year) will not make me rich but it does help me pay off my debt.
 

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OMG. What in the world did you charge on those credit cards? How old are you two?

I think bankruptcy is about the only way you will ever get back on your feet. I do not know the bankruptcy laws though. I know you can't discharge medical debt.
That is absolutely false. I discharged 12k of mostly medical debt just last year. Over 50% of the bankruptcies in the US are due to medical.
 

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Bankruptcy won't help you because you seem to continue spending beyond your means. What do you mean the rest of them are new and total $4500 because you just had a baby?? Having a baby doesn't mean you have to be in debt. Draw up a budget and try to increase your income. Maybe you can work in the evenings when your husband comes home so he can look after the kids.
I meant that 4500$ are from when I had the baby ( hospital bills ) Working in the evenings won't work because my husband doesn't get home until 10pm :(
 

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I have filed for bankruptcy before. To be perfectly honest, trying to pay all that off without a significant increase in income is going to be brutal and will take a long time. It will not cost you anything to talk to a bankruptcy attorney. They can give you your options and talk you through the process. Try to find one that works with lower income people, and you will be able to get a break on the costs. I have no doubt that you would qualify for a chapter 7 at your income level.

It is a huge weight off of your shoulders once you have filed. I can't even begin to explain how much of a relief it has been. But you need to make sure you are ready to change your habits going forward and live within your means. The only debt I have now is student loans which are not dischargeable, and my husband has a couple of hospital bills from earlier this year that we are current on. I have several credit cards but I pay them off every single month. I do not want to have to ever file again.
 

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Sorry Owl, we have a different medical system in Australia. I thought you meant you went shopping or something. I don't know your bankruptcy system but I do know the headache of bills. Whatever you choose to do it will work itself out and you have to try not to let the stress get to you.
 

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If you haven't read any of the books by any of the financial gurus.... you NEED to. I'm a big Dave Ramsey Fan. There is a lot of information here in the Village about how his steps work. All of them advocate living below your means.

You have got to get your income up and your expenses down to make some headway in your situation. I clean some local houses and make $50 for 2-3 hrs work. Start SOMEWHERE to earn a dollar here or three dollars there ... it adds up. Years ago my friend complained "well saving $5 won't help me when I owe $1000 so they always spent that $5 on wants and never came to the conclusion that it added up over time. Sell what you can, it will hurt a little and it may not get you very far initially but if you can get $500 for that extra car that cuts that CC1 down by almost half and cuts your insurance costs for the year. Once that CC1 payment is gone that extra money goes to the next card. The more control you have over your money the more money you will find you have.

Dave Ramsey's My Total Money Makeover or Financial Peace Dave Ramsey Homepage - daveramsey.com
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Medical bills ARE able to be discharged in bankruptcy. I know this for fact. I'm NOT promoting filing but I will say this. If you're going to continue to spend then don't bother. You could end up in even worse straits cause you won't be able to file again for a long long time.
You never answered the suggestion of babysitting .. is this possible?
 

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As far as I'm aware the debts that aren't dischargeable are student loans, debt to the government and child support.

The rest of the stuff can be discharged.

I echo NikoSan on the statement about having a plan of action. Once you file you'll get a fresh start but you'll be literally starting from scratch. Filing will mean that you'll likely not be able to get credit easily for things like a vehicle(don't know if yours are paid for) and could mean you have problems with renting/leasing a place to live. It'll mean if you finally do need credit that they will charge you more. So figure out a realistic budget and trouble shoot problems ahead of time. It IS possible to start over but you have to guard against falling into the same traps. Filing won't do you any good if you're not committed to making your budget match what your household earns with a little left over to build for life emergencies.
 

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Once you file you'll get a fresh start but you'll be literally starting from scratch. Filing will mean that you'll likely not be able to get credit easily for things like a vehicle(don't know if yours are paid for) and could mean you have problems with renting/leasing a place to live.
Actually new cars are shockingly easy to get after a Bk ... because if you miss one payment by even a day all they'll do is take the car away. You can't file BK again so the car companies are safe and they'll sue you in court to garnish your wages for their losses. The car loan companies are vultures. So are some credit card companies. Again, they are so happy to loan to you because as soon as you can't handle the debt, they garnish your wages and sue you into eternity. There ARE downsides to BK, sadly the availability of auto loans isn't one of them.

And how you acquired the debt DOES matter. The BK trustee is going to ask you to explain how you got to this point. If you can't give a reasonable explanation your BK is denied (yes, I've seen it done). Giving yourselves a big wedding and honeymoon then having a couple of kids and then deciding you can't afford to pay back the credit card company isn't going to fly.

What I recommend:
~ I agree with adjusting your husband's income tax withholding NOW / Immediately.
~ You're a family of 4 living on approx $30K a year. It is possible you would qualify for some government services - not a lot but some. I think you should apply and see. Some of your medical expenses from having the baby may be covered retro-actively.
~ Call the cc companies and ask for relief. I've harped on this before to you on other threads.*
~ Call the hospitals / doctors and ask for relief. Some hospitals have programs.
~ Get a copy of "The Tightwad Gazette" from the library and read it. (Yeah, I know I'm recommending that a mom of a 2-yr old and a 2-month old to find time to read. You might need to find that book at a local thrift shop because this might take you a while but it will be worth it.)
~ You and hubby sign up for "Financial Peace University". You can attend in person or take the class on-line.

* How old is the cc debt? In almost all states (if you're in the USA), unsecured debt becomes uncollectible after 4 years. If you had a credit card for 6 to 10 years and maintained a balance the entire time but only paid the minimum monthly due, the theory is that a portion of your balance should (or could) be "written off" by the cc company as uncollectible. One credit card company did this for us - completely voluntarily! If you have old debt, knowing the 4-year rule gives you a bit of leverage when negotiating with the cc companies.

Speaking of negotiating, if you still have "baby brain" and aren't up to making the phone calls, DO get hubby to do it. Since he gets off work at 10pm, he probably doesn't go in to work first thing in the morning so he'd have time to call.

Which leads to the issue of you getting a job. Since he gets home so late, I'm going to bet he is around in the morning. That is good because it gives you or him time for a morning job - delivering newspapers, working the morning breakfast shift as a food server, delivering bagels or donuts for a local bakery, heck - working in a local bakery. My adult DD did a job like that when she was home with one of my grandchildren. She delivered bagels to area businesses and she took her baby right along with her! I'm sure it wasn't easy but it was money and she was glad to have it. She kept that job for a couple of years so yes, she was toting a toddler along with her on the job, too. When I had our first round children, I would pick up extra work through temp agencies or I would work nights and weekends for a catering company. The temp agencies are great because they're always looking for people who are willing to work short or part-time jobs. You know those people at Costco / Sams Club who hand out food samples? Those aren't store employees, they're temp workers! There are other part-time jobs you can pick-up, like merchandising for mystery shopping companies but details are best left to another thread.
 

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I really don't think bankruptcy is the best option. Your debt totals around 50k and will take a while to get rid of but that isn't a whole lot of money and bankruptcy is a whole lot of hassle.

You need to know where your money is going and not guess.
You need to have a budget and make a plan of action.
You need to cut corners and do everything you can do to boost your income.

You have a young growing family, learn all you can about your financial situation and your options before you make any decisions that are going to effect the most of the upcoming decade.
 
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