I have no idea where to start... Help?

neilgunt · #1 (**permalink**) 06-06-2010, 02:22 PM

"I'll apologize, in advance, for what may turn out to be a long post.

My family consists of my 4-year old son, my husband, and myself. I am currently the only source of income. Unfortunately, it is not an option for my husband to take a job (several reasons... he usually does not make enough money to cover daycare; his employment skills are in the construction industry, which has a very high unemployment rate in Georgia, right now; and he has three pending felonies on his criminal record, so no one will touch him - long story). My net income per month is $3000.00 (rounding down slightly).

Rent - 625.00
Electricity - 100.00
Cellphones - 190.00
Gas - Natural - 70.00
Aaron's Rental 1 - 117.00
Aaron's Rental 2 - 106.00
Car note ($180/bi-weekly) - 390.00
Auto insurance - 63.00
Water - 65.00
Fuel ($35/week) - 155.00
Groceries + Household Items ($125/week) - 545.00
Cable/Phone/Internet - 170.00

TOTAL $2,606.00

On my income, I am able to cover our bills, and it looks like I have enough for savings, but I can never keep it. I will have to analyze our spending, but I can pretty much guarantee that the money is going to stupid things, like take-out and cigarettes. An emergency would kill us financially.

My credit is total crap. I made a lot of mistakes when I was younger (I'm 31 now) and ended up having to file Chapter 7 bankruptcy (in 2004). We got our act together for a while, and rebuilt our credit and were able to buy a house (2006). Things went well for a while, both of us worked, then went to crap (house fire; insurance company didn't pay... another long story)

By the time all the dust of my long story cleared, my credit cards were beyond help, the house was foreclosed on, I was forced to relinquish one of our vehicles to the repo-man, and my credit was (and still is) shot.

Fast forward a couple of years and here we are. I have been trying to pay off some collections, but have not made much headway (I did manage to pay off two that were judgements, but it took me a year). Here are the collections that I have currently:

Creditor (Orig. Creditor and/or Notes) - Amount - Drop-off Date
Allgate Financial (Freidman's Jewelers) - 654.00 - 10/2013
Arrow Financial 1 (Plains Commerce Bank CC) - 300.00 - 07/2013
Arrow Financial 2 (Premier Bank Card CC) - 533.00 - 09/2013
Asset Acceptance (Capital One CC) - 942.00 - 08/2013
Barclay's Bank (CC) - 1042.00 - 12/2014
Medical Collection 1 (Not owed) - 57.00 - 09/2013
GMAC (Repo) - 15,179.00 - 03/2015
Home Loan Services(2nd mtg purch$) - 26,232.00 - 07/2014
LHR (Juniper Bank CC) - 1043.00 - 11/2014
Medical Collection 2 - 506.00 - 07/2012
Medical Collection 3 - 99.00 - 02/2014
Merrick Bank (may be duplicate) - 1285.00 - 01/2015
Medical Collection 4 (Not owed) - 62.00 - 11/2013
Verizon Wireless - 1192.00 - 08/2015
Property Tax Lien (placed after house was foreclosed on) - 1115.00

The drop-off date is the date that these items are supposed to drop off my credit report (should also be when the statute of limitations is up, as well). I am aware of how terrible it sounds for me to be looking at the statute of limitations, but when I have a family to take care of, I have to look at all my options (including, unfortunately, the immoral ones, such as allowing the SOL to run its course so the debts are not collectible, or considering bankruptcy again in a couple of years, when I am able).

A couple of the medical collections are legitimately not owed (as per the original creditors that have been trying to help me get these taken care of), but if I had to pay them to just make them go away, I would.

Most of these creditors are not contacting me (I am not hiding from them, they just aren't calling or sending letters), specifically the creditors for the 2nd mortgage and for GMAC. The flip side of that is that I am also not contacting them (I am hesitant to because I do not want to reset the SOLs, which will happen, if I take any action on the debts). There are a couple of options that I see...

1. I can sit tight, work on my current finances, and let the SOLs toll on these, so that, even if they do try to collect, they can't

2. I can wait a couple of years, file bankruptcy again (it should be an option - I've already spoken to an attorney)

3. I can pay off the smaller collections, and let the SOL toll on the bigger ones (which will wipe them from my credit report), which will allow me to possibly begin rebuilding sooner than a bankruptcy would

4. Do a combinations of the above

I know my first priority needs to be my current finances. Our lease is up and we will HAVE to move (its a safety issue) and our rent will more than likely go up (based on what I have seen available in the areas we need to get to). So I know that we need to adjust our spending habits NOW and pay down as much of our current debt as we can (Aaron's Rental, specifically). We have called the cable company and our cellphone company and lowered those as much as we can (I know... they are high still... but I am in school, which requires fast access internet, we are locked in to a contract with the cable company for the package we have, and we are locked into a cellphone contract + I use my cellphone for work, which keeps my boss happy).

So... that's my story, in a nutshell.

I am looking for a little guidance regarding my current finances and trying to figure out what to do about the collections (some are written off completely, so I'm guessing that they won't be contacting me, but who knows).

Again, I apologize for the wall of text.

Thank you for any input that you can give."

samruba · #2 (**permalink**) 06-06-2010, 03:27 PM

"Everything on the credit report is written off. The only current, open debt that I still have is my car.

I know that it was a lot to read... as I said in the post, part of it was just me needing to get things off of my chest.

I honestly think that our biggest issue (other than the collections that are just sitting there simmering) is the lack of an EF. Any medical issues that come up tend to send me scrounging for money, so i know that I need to plan for those (and that it with decent insurance from my company). I will call my payroll dept and have them send $100/week (I get paid weekly) to our rainy day account (not tied to my other accounts, no ATM access, no check card, no checks - I have to physically go to the bank to withdraw money - which I hate doing), which I'll need to relabel to our EF (haven't used the account in a while, but its still there).

Most of the collections I can pay-off, if it ever came down to it. I did have a couple that managed to get judgements against me, but I zapped them quickly before they got the garnishment. I'm only hearing from one other, and I'm waiting on verification of it because I honestly don't remember it (its probably accurate, but I want to be certain). If its mine, I'll more than likely just ask for a pay-for-delete or a settlement on it. I'm just not sure about what to do with the others, or if I should just let them simmer and see if they boil. I don't really like doing things that way, but I don't have the money immediately available to take care of them.

I found this Debt Relief information here -debit-free.us/2010/05/09/how-to-avoid-credit-card-debt/
Go ahead and have a look.

One more thing. I am definitely going to set up our EF and, as you said, is to pay myself first, so that I can begin to build up some kind of buffer for those emergencies that my luck seems to attrac"

C9Consulting · #3 (**permalink**) 06-06-2010, 03:45 PM

Why did you post from two different usernames>

Off the top, if you have 190 in cell phone...which is too high...there's no need for a house phone. If your house phone is for your husband, why is your cell phone bill so high? Also what package are you in that the cable company won't let you opt out of your bill? I'm pretty sure that if you went in there and said cut my cable off, they would have to have a great reason not to comply.

Sell the car and get out of that and buy a "beater"(beater is a car that goes from A-B, no frills). That should get rid of the longevity of the car payments even if you are upside down.

Only let SOL run its course when you have no other options. Technically speaking when a bunch of people let SOL happen, resort to bankruptcy, and default on loans...it ruins our economy. The people who you owe have employees, and those employees have to find a way to feed their families too.

Your husband needs to keep finding a job. Your reasoning for him not having one isn't good enough. If he was physically disabled, I would understand. If no one will touch him...find someone who will. In the meantime, I recommend you pick up more working hours (if you only work one job) while he goes job searching for any and every job out there.

I have a lot more questions but can't do it in a simple forum thread. I hope some of this helps save a little more cash.

littleroc02us · #4 (**permalink**) 06-07-2010, 12:08 PM

Honestly, I didn't have to read the rest of your letter, because I think your biggest problem is that you keep thinking that borrowing money is a good idea in your situation. Stop!!! Bankruptcy is not the solution. You need to live on nothing and start learning to be discipline with money. What a mess.

mmvfinancial · #5 (**permalink**) 06-10-2010, 04:47 AM

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