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How to manage my debt and life as a whole

thegreatcokeolympics — Sat, 19 Sep 2009 12:34:41 -0800

How do I get my life on track with high debt and a chronic medical condition? So i'm 26 years old and have been completely on my own since i was 18. I come from a working class family who lives in a small dying town with no jobs. I knew if I was going to make something of my life in any way, I had to get out of there. Being so young and inexperienced, it's not like I could get a well paying job to support myself. And it's not like my family had any money to give me.
So 5 years ago, I took out many many loans and used that money to move myself across the country to " the big (and expensive) city" to attend college and hopefully start a new life there.

I also used the student loan money to pay for everything I would need to live on (mainly rent because the dorms were more expensive than studio apts, food, and school supplies) and even then it still wasn't enough, so I also worked full time in addition to going to school full time, just to make ends meet.

On top of this, to make matters more complicated, I also have a chronic medical condition. I have had it mildly since I was 10, but never had it addressed, or even diagnosed as to what it was, since my family lacked health insurance.

It was still fairly mild even when I moved here, but through the years got much more serious and I am now in constant daily pain and have some serious breathing issues. I tried to get health insurance on my own, but no plan would cover me due to the pre-existing condition. So I had no choice but to pay out of pocket for all medical expenses. Of course I had no out of pocket money to spare, so I used credit cards to pay all my medical bills.

And I never had enough credit to pay for anything medical that would truly diagnose me, so I resorted to many expensive pain management treatments only to be left with my condition progressively getting worse.

Now flash to present day, 5 years later, and I am $60,000 in debt from school, $10,000 from credit card debt. The job market is scarce and no one is hiring on staff. I've been taking very low pay freelance gigs which don't even amount to half of my expenses.

Currently, my bare minimum expenses amount to $1150 per month.

One of them being a health plan I pay 400 a month for after puting myself on a long waiting list for a government health plan that teams with private insurers to give coverage to high risk people. With this plan I was also able to finally get the tests I needed to diagnose me, only to discover (upon confirmation of 6 different doctor opinions to be sure) that I need a surgery that will cost a minimum of $30,000 depending on where I get it done, while knowing full well my insurance plan will most likely not cover because it is not a common surgery, though results are typically favorable.

I also pay 400 a month to see a physical therapist who I have been seeing for a year and a half and is the only source of pain relief I have found to help me (Insurance only covers 25% of 12 sessions a year, which I have already maxed out) Then pay 300 a month for my credit cards and 50 for my cell phone. And every 3 months, pay 150 forbearance fee for my student loans. That is it.

I had to leave my apartment and move in with a friend who is letting me stay there rent free until I figure something out. They are also fortunate enough to make a decent living and have been loaning me money to help pay my bills, eat their food, and use their computer. If anything, they've almost become my surrogate parent and it makes me feel like shit for puting them in that position, but I simply don't know what else to do.

I would get a second job anywhere I could find, but not only have those jobs even been hard to come by, but my health simply won't allow it at this point. I am extremely distressed, depressed, and hopeless. The biggest issues of all is the health and everything else seems to stem from it to make all the other problems worse. I don't know how much more bare minimum I can get in terms of cutting my budget when I'm already miserable and in so much pain.

I have considered going on disability, but I don't know if I would count since I still have been able to work, so long as the work isn't strenuous and I don't have to be on my feet all day.

I've considered welfare and bankruptcy but I'm not too sure how they work or if I would have to give up making enough money to pay for everything I need just to qualify. Or if bankruptcy will just ruin my credit enough to never be able to rent again.

I want to be responsible and make the best choice that will benefit me in the long run, but I don't know what that is or where to go. I really need some advice or clarity on this, so anything anyone has to say, please I'd love to hear it. Thank you.

Drowning in debt

Anonymous — Wed, 11 Feb 2009 21:02:46 -0800

How do I know if I should be considering bankruptcy? My spouse and I have somewhere around $15,000 in credit card debt, and we each have student loans. Between rent, bills (utilities and such), card payments, student loans, gas, groceries, etc. we are getting by paycheck to paycheck. Most bills are paid somewhat late, depending on when paydays fall, which means we end up with late fees, making it even harder to pay, and it's an endless cycle.

I don't want to sound like I just racked up a bunch of debt and want out of it (which isn't the case - due to being laid off, I lived off my cards for awhile, and we moved to a different state for economic/job reasons, using the cards again).

How do I know when to begin contemplating bankruptcy? I don't want to think about having shit credit for years to come if we do this, but on the other hand I'm sure we already have shit credit from all the debt and late payments.

I live in North Carolina if it's relevant. Throw away email drowningindebtnc@gmail.com

Fed up with banks' use of bailout money

hardbop — Tue, 10 Feb 2009 06:48:04 -0800

What happens if I default on unsecured debt? I'm fed up with the outrageous use of taxpayer bailout money by the nation's banks. I live in Florida, own my home outright and it is protected by the state's Homestead Act. I'd like to just pay about $20 a month to the credit card companies instead of the minimum payment(to keep them from claiming I stopped paying them) until I can file Chapter 7 in 4 years. What do you think?

Should I officially go broke?

Anonymous — Fri, 05 Dec 2008 10:23:52 -0800

Question about going broke. I have been out of work a total of five months this year, having gotten laid off twice. Currently, I am not working and am on unemployment. After paying all my bills I have 65 dollars a week for food, etc... in NYC. I have 17 weeks of benefits left. If I do not get a job in these 17 weeks remaining, I will have to default on all of my debt. If I don't find a job, should I declare bankruptcy? The details: I owe about 9000 in credit card debt, and about 3000 dollars in medical and other unsecured debt. I have a 401k with not very much money in it, maybe 3000 dollars. I have no home, no savings otherwise, no assets, and no job. I currently collect 340 dollars a week unemployment benefits.

How can I dig myself out of this credit card hole?

arniec — Sun, 16 Nov 2008 14:31:48 -0800

Given the current economy, would doing a "charge-off" on my credit cards be a reasonable option, and how would I go about doing it for my biggest benefit? Many years ago I had a college credit card that I couldn't afford to pay off. I finally asked about a charge-off on it; about 80% of the card's balance is as low as the company would go. Given that the balance was about $2000 I don't feel the charge-off was really worth it, so I didn't do it.

Soon after that, I bought my first house.

Now however I find myself in much worse credit card debt, nearing $30,000 over a span of 6 cards. The two highest cards have $8,000 balances, and then a few thousand on various other cards. Most of these cards are charging me 30% interest. I have taken a second job, well paying, just to pay off these cards but the interest rates are so high that I just can't seem to make a big dent. Working all of 08 putting all my 2nd job's money to the cards, not using the cards and I'm only in 3k less debt than I was.

I know of some people who told me that they were able to get cards charged off for pennies on the dollar without declaring bankruptcy. I told them it probably hurt their credit, but they were just happy to have the debt gone and credit scores recycle every 7 years anyway...

So I'm reminded of my charge-off experience and that they'd only go t 80%...if I could get even 50% on one of the $8k cards, I could pay that now and save myself so much in interest and use the snowball method to pay down the others...but when I tried last time they just wouldn't go that low.

Complication: My wife and I DO plan to move before the next 7 years, which would involve selling our current house and buying another, so I really DON'T want to nuke my credit where I can't move for 7 years.

Any suggestions on what to do here?

Garnished wages can we still settle the debt?

Anonymous — Wed, 29 Oct 2008 20:49:11 -0800

My Mom’s wages are being garnished by a collection agency. Can we still settle the debt? How much do we offer and where do we get the money? My mother’s Ford Fiesta bit the dust a month ago and she needed to get a new car. Her hours have recently been cut at her old job and she has just taken a second job for significantly less money ($7.50/hr versus $10.50/hr). After talking with her I came to the realization that she couldn’t afford to even purchase a reasonable beater for a few grand. I decided that I would help her out with a few hundred bucks and an interest free loan on the condition that I could look at her finances and make sure everything checked out. Here is what I found:

Her monthly income is variable but appears to average about $1000/month +/- $200 (her rent is $480/month).
She has one credit card with a balance of about $1100
She owes a collection agency about $13,000 and they have begun garnishing 25% of her wages at her primary job. The debt comes from a credit card where the original balance was about $6000. She settled with the credit card company but then failed to make the payments and the account sat in collections for a couple of years.

Here are my questions:

Now that the collection agency is garnishing her wages is it too late to settle with them?
If we can settle with the collection agency how much should we offer?
If we do offer to settle, how should we raise the money to pay them off? Will banks make loans to me or my Mom for this purpose?
Should my Mom just file for chapter seven bankruptcy?

We are both located in Michigan. My Mom does not have any significant savings or assets other than a 401k. I have only been out of school for a couple of years so I am still trying to get on my feet. I have good credit and some savings, but not enough to pay for this endeavor unless I borrow against my 401k.

Is my debt going to ruin my parents' credit?

Anonymous — Mon, 20 Oct 2008 07:09:14 -0800

How will a line of credit that my parents cosigned affect my ability to enter into a debt repayment plan through credit counseling? I've reached a breaking point and I need some help figuring out how I'm going to deal with my debt. I already plan to speak to a credit counseling service and possibly a trustee in bankruptcy next week, but your advice is greatly appreciated. In general, I understand what's going to happen in terms of setting up a repayment plan or a consumer proposal. I'm concerned because part of my debt is an $8000 line of credit that my parents cosigned for me when I was a student.

Is there a way for me to address my debt woes without screwing up my parents' credit? Secondary question: how do you talk to your parents about stuff like this? They're going to be horrified and disappointed in me and it's making me sick thinking about it.

Supporting details: I'm in Canada, I'm 35 and I owe about $45K total ($36K credit cards, 8K line of credit and 3K overdraft). I have no assets and I'm just getting back to work after losing my job a couple of months ago. My parents could almost certainly pay off the line of credit easily... they're pretty well-off, but a little sensitive about money right now because my dad is retiring next year. Our relationship is OK but not fantastic.

Throwaway gmail account is canadiandebtor@gmail.com.

It's not mine, I swear!

mezzanayne — Fri, 29 Feb 2008 09:16:58 -0800

Creditors are starting to harass me again for old debt that I don't believe I'm responsible for. I divorced back in 2003. In the settlement, my ex-husband and I were each assigned a handful of credit accounts. I paid mine off, he filed a chapter 13 bankruptcy. Two credit agencies are now contacting me about (2 different) credit card debts, both of which are the responsibility of my ex-husband according to the divorce settlement.

I have a copy of the bankruptcy matrix which lists both of the credit accounts. I've faxed the matrix and copies of the divorce settlement to both credit agencies but both say that since I was the primacy cardholder, that I'm responsible for the account.

My ex-husband and I are no longer in contact, although I do have his cellphone number (but he refuses to discuss this issue). Creditors are not interested in contacting him. In the meantime, my credit rating continues to suffer with these 2 bad debts on my report.

I have the bankruptcy matrix, the case number, and the name of the lawyer that handled the bankruptcy (although he refuses to give me any information about the case). What do I do now? I live in Kansas, if that matters.

Will bankruptcy absolve you of tax debt?

jotrock — Tue, 16 Oct 2007 16:06:33 -0800

Will filing for bankruptcy absolve you of tax debt? I owe a lot of money in back taxes, in addition to some other extremely large financial burdens that I won't get into now. The debt is from 2003 and 2004. I set up a payment program with the IRS and have kept up with the payments for about a year now. Now I'm on the brink of other financial difficulties and wondering if Chapter 7 will get rid of my tax debts as well. Even a bankruptcy lawyer I spoke with wasn't sure! The laws changed in 2005 and nobody seems to know what's going on now!

What happens to a mortgage if the lender goes bankrupt?

saulgoodman — Fri, 17 Aug 2007 06:29:15 -0800

If my home mortgage holder is Countrywide (it is), what happens, in practical terms, if Countrywide were to go bankrupt? Would they call the loan, forcing us to get financing elsewhere to cover it? Or would another lender assume the debt without our having to take any action? Or what?

Should we declare bankruptcy?

Anonymous — Sun, 01 Jul 2007 14:55:40 -0800

Should we declare bankruptcy? My wife and I have been married for almost 1 year. We are currently $76,000 in debt, and it is the cause of all of our stress. We are also both going to be having surgery within the next couple of months, and despite having insurance through my work, we expect to take on another $4,000 - 6,000 in debt. In addition, my wife just lost her job on Friday, and with the upcoming surgery it is looking like it will be until August before she can find another job. Our debt breaks down like this:

$12,300 - Credit Cards
$21,000 - Student Loans
$9,500 - Auto Loan
$33,800 - Unsecured Personal Loans

The total monthly payments for all of this comes out to $1,700. Our basic living expenses (rent, insurance, utility bills) equal out to $875 a month. That means we are paying out $2,575 a month, and my income is only $2,200 a month (after taxes). That puts us at -$375 per month, and we haven't even included groceries and gas yet!

At this point we have not paid any bills late as my wife has just lost her job, but by the end of July we will definitely have to start paying things late, or maybe some things not at all. We could borrow a small amount of money from some of our relatives to help us out if things get really tight, but that will only get us by short term.

I'm sure if my wife gets a decent full-time job ASAP after her surgery we could get back on track and maybe even start paying above the minimum to get us out of debt quicker. The unsecured personal loans were all used to pay off previous credit cards, so we have made some attempts to improve things, and I'd say overall we are better off now than we were last year, but it's beginning to look hopeless to us, and we think we'll never be out of debt. I've posted this anonymously, so I'm not really looking for the moral lecture. If we do declare bankruptcy, we would use this as the fresh start that it was intended, and not make the same mistakes that got us to this point. Our primary concern is that we have a 2 year old, and we want the best life possible for her. It would seem that if we declare bankruptcy we could get back on track much quicker and relatively quickly purchase a decent family car (instead of the truck we have now) and even be on the path to home ownership.

The other thing is we're not even sure if we qualify for bankruptcy at this point. As I said, we haven't paid anything late, but we will be very shortly. We'd rather skip the whole debt collector process if possible and just go straight to bankruptcy.

Credit Counseling - No More Interest- How?

Anonymous — Mon, 12 Jun 2006 16:38:04 -0800

How do I get my debtors to allow me to pay them off on a payment plan and no further interest charges? I have approximately $400,000 in debt, not including several pieces of real estate.

I have no liquidiy due to family medical issues, but do not want to declare bankruptcy although I have no money "for the short term" (say, 6-9 months) even to make minimum payments.

I want to make a deal with the creditors that I am not running away, that they should close the accounts and not charge any more interst going forward, with low minimum payments to be made until it gets paid off (or for a one year period, lets say.)

I am not concerned about ruining my credit; its ruined itself over the last 3 months.

I do not want to declare bankruptcy either.

How would I do this? is it best to go to a place like BuCCs www.buccs.com? or to do it alone? (using a service would make me only need to pay one bill each month instead of 30?)

or to ignore them until it is 120 days past due and then settle?

or let the bills rise until they write them off?

Besides all other moral concerns about owing the money, I do not want my entire family getting phone calls and would not not particularly love process servers at my door.

Since I am posting this anonymously, let me generously beg y'all kind souls not to take this question off topic or discuss its (im)morality.

yes I am aware that just because a credit cousieling service is "nonprofit" that does not mean they are there to help you. (and yes I am aware that many of these agencies are sponsored by the CC comanies themselves.)

What is the best way to get on a payment plan, while stopping all accruing interest?

My health is being severly ruined by this (headache, stomachahes from stress) and I really want to do this tomorrow....

How do I get my money back from my ex-roommate?

thefinned1 — Thu, 01 Dec 2005 19:17:22 -0800

How do I get my money back from my ex-roommate? I just finished a one year lease with a roommate who never paid any of his share of the utilities. I asked for them every month but never got any of money out of him. Since I could afford it I paid both my share and his. The last month he didn't pay his share of the rent, and in the interest of keeping my rental history clean I had to pay it. Over the course of the year he ended up owing me $1,300.

I always wanted my money but now that I am out of the apartment I really want my money.

I have sent 2 or 3 letters to him, outlining what he owes me and when I want the money. The deadline for him to pay me was just the other day and surprise, surprise I didn't get my dough.

Initially I had planned on taking him to small claims court but though a mutual friend I found out that he (my ex-roomie) filed for bankruptcy on the last day before the law was changed.

So what are my choices?

Can I still take him to small claims court despite his bankruptcy?

Can I take him to bankruptcy court?

Should I hire a lawyer?

Cut my losses?

Are there other options?