what to do when you cannot avoid going into debt?

[FuzzyOne]

we've acquired quite a bit of debt over the last year due to one of our children's medical/therapy needs. we do have insurance, but it has proven very poor with a VERY large deductible. my husband works full time and i am looking for part-time work with flexible hours as i can't work during the day as our child is often sick and home from school. we both have college degrees, my husband's is advanced and he works in his field.

if we had better insurance, it would make a HUGE difference. my husband is keeping his eyes open for a job that would provide better benefits, but has had no luck as of now.

i am in the process of trying to get state financial assistance. i don't know what we might be eligible for at this time.

we are still needing to put expenses on our credit cards every month and we live pretty frugally every month. at most, i might be able to trim $50-100 off our monthly expenses.

before now, we never carried a credit card bill past a month and our only debt was student loans and mortgage (and we have been together 14 years). we are quickly using up our credit and i anticipate hitting it in a year at this rate.

the only other way i can trim expenses is if i took a deferment on my student loan (and just pay the interest).

does anyone have ANY advice? i know that there must be a way to work through this if i just had the knowledge.

thanks.

[cristeen]

If you are not employed, you should not be paying your student loans right now. Put them into deferment and use that money to pay everything else instead. Yes, interest will continue to accrue, but the interest rate is lower than your credit card.

[SuzyLee]

In all honesty, your H is unlikely to get an amazing well paying job with great benefits in the current economy.

The point being, you need to think longer term than just how to make it the next few months until you reach your credit limit.

To me it is a no brainer to defer your loans. If their interest rate is lower than your CC interest rate, then call today and defer them.

I would advise posting your budget to get suggestions. It is hard to know where you might cut without knowing what you spend right now.

[HydeParkB]

I was able to qualify for a medical grant for my child, through the local Children's Hospital. (Our cruddy insurance is not paying for her speech therapy.) Basically, they looked at all our finances, and determined that we shouldn't have to pay/didn't have the resources to pay. The grant covers "anything that insurance does not." That includes our copays on other services at the hospital. It's like a second insurance, I guess.

We are a WOHM/SAHD couple with 1 child and another on the way. I make too much to qualify for state health insurance, but apparently not enough to be expected to pay $3000+ for speech therapy.

I would ask you hospital about "grants," "medical assistance" and "prompt payment discounts."

I might also try to to think of job or money-making opportunities that might allow you the flexibility to be home with your child or at appointments as necessary.

[FuzzyOne]

yep - we totally realize that him finding another job right now is very unlikely.

we are certainly not thinking month to month - i am completely thinking about the long term, but the reality is that at this rate, we are going to hit our credit limit in a year. i don't want to let it get to that point.

i just took the deferment, so that will be one less bill for now.

i will look at posting our budget to see what you guys can see. it will take some time as my son requires special supplements and has several medical bills we have had to charge. he is also going to have to start a special diet soon (hopefully insurance will cover) and i am uncertain how much that is going to add to monthly expenses. he will also be starting a special school this month (very necessary) and that extra expense we literally don't have the money for. that's pretty much the final detail that is adding to our already strained financial situation.

Originally Posted by SuzyLee

In all honesty, your H is unlikely to get an amazing well paying job with great benefits in the current economy.

The point being, you need to think longer term than just how to make it the next few months until you reach your credit limit.

To me it is a no brainer to defer your loans. If their interest rate is lower than your CC interest rate, then call today and defer them.

I would advise posting your budget to get suggestions. It is hard to know where you might cut without knowing what you spend right now.

[FuzzyOne]

Originally Posted by HydeParkB

I might also try to to think of job or money-making opportunities that might allow you the flexibility to be home with your child or at appointments as necessary.

i've been wracking my brain, trying to come up with ways i can bring in some extra income. his condition can be so variable that it is not possible for me to keep any work hours during my husband's hours of work. i also am home with my daughter, so that is the other variable playing in to when i can work. it is not feasible for us to pay for childcare.

i've been selling stuff on half.com and ebay. very unreliable and not a significant amount of money. i have not been successful finding part time, flexible employment.

[1growingsprout]

How much 'short' are you each month?
Are you crafty at all... In just a short time the holiday craft fairs will be starting and possibly you can jump on that train, so to speak.

A friend of mine makes the most adorable baby quilts, basically from remants and scraps... shes good and has it down to a science. A baby quilt takes her about 3 hrs start to finish and the sell for about $60-75 depending on color, pattern etc. Her cost is usually under $10. She does have a sewing machine that does everything.

[HydeParkB]

Half/ebay/etsy were what I was thinking. Honestly, I've not had much luck with those, but sometimes the input costs are small enough on things I posted to etsy.

I don't know if you pay much in taxes, but if your medical expenses (including the markup for special medically necessary foods) are over 7%, those are tax deductible. IIRC.

Jobs are certainly hard to come by right now. I'm assuming your DH is doing a typical workweek - 8 to 5, M to F. What about a weekend gig for you - retail, babysitting, waitressing? I know none of these pay big bucks, but I just hate the way the interest on credit cards adds up.

I don't know what your child's health condition is, but is there some service that you could offer families in a similar situation? Food preparation? Shopping? Ordering from a coop, with you taking a markup on items and organizing the delivery/distribution? Short-term/emergency on-call babysitting?

[Denvergirlie]

Originally Posted by FuzzyOne

we are certainly not thinking month to month - i am completely thinking about the long term, but the reality is that at this rate, we are going to hit our credit limit in a year. i don't want to let it get to that point.

I don't want to freak you out, this is not the aim but I have to mention that your credit limit might get slashed in the future and then there would be no more credit.

It's happening all over the place for no reason at all to a lot of people. Some are getting raised limits, but more often than not these days it's the credit card companies that are reducing availabel credit to hedge their possible loss.

So, you need to be even that much more focused on a solution now and not counting on credit always being there. You could be the lucky one, but there are lots of stories these days about credit being slashed.

best of luck to you and I hope this doesn't add more stress on your plate, but better forewarned than not even considering it.




Another yet too to put student loan on hold - I would stock pile cash and pay miniums on everything and hopefully you'll be able to come up with some more assisstance.

[daytripper75]

Have you spoken with a social worker from the hospital? Last time I was in for my LO a social worker sought us out and explained about some special programs that were in place so that we would never have to go without insurance.

[cymbeline]

We have also had to live off of our credit cards. It is very frustrating, but you WILL get through this.

I second so many of the other things mamas said, including:
- Defer your student loans if possible.
- Find out if there are any medical grant opps through the hospital.

Call the cc companies and tell them you want a better rate. If you are going to live off the cards, at least try to get the best rate possible.

Do you own your home? You might be able to get a HELOC for less interest than the cc's. If not, tell the cc companies that you DID qualify for a HELOC at, let's say, 8.625%, and you are planning to close your cc accounts and transfer the balances unless they can offer you a competitive rate. Of course, this only works if you are current on your cc pymts!

If you are behind on payments (cc, mortgage, utilities, anything), call those people immediately and tell them you are facing financial hardship and you need payment assistance. We were able to slash our mortgage payments in half simply by talking extensively to the bank about our financial situation. They will ask for proof of hardship, but mainly they will do almost anything to keep you from declaring bankruptcy.

Lots and lots of people are having a hard time right now and you are not alone, and the banks and other institutions know this and are surprisingly flexible. Just hang on tight and you will make it through. My prayers go out to your family!

[FuzzyOne]

thank you everybody for all of your suggestions. i am taking note of everything.

the one thing about always being good about paying bills, credits is that we do have excellent APR on our two credit cards and we also have a very low mortgage rate. i am thankful for that.

i am not sure about being able to get assistance through our hospital as ds has never been hospitalized. i'll have to do a little more digging there. he's just one of these kids who seems to fall through the holes on so many things.

we have not fallen behind on any payments for anything yet. i have slowly been reworking things in an attempt to not accrue any more balance on our credit cards and i think i am getting there. but now, with this need of a new school - ugh. it's just adding to everything.

well, again, thanks everybody. today, just by deferring my student loan and having my husband completely quit putting any money into retirement, i have added $500 to our monthly income. that's gotta help somehow.

i know a lot of people are dealing with this. it's just very disheartening when you try to do everything right for so long and in one year's time see it all go downhill.

cymbeline - thank you so much for your encouragement. you are right - we WILL get through this.

[1growingsprout]

One thing i forgot to mention is for your DS, i dont know what his medical needs are but if you join the national association of "xyz" they usually have a local chapter and from there you can get referrals, resources and such. Also if you check with your pcp or peds office they could be helpful as well.
If DS qualifies for early intervention from the school district that can be helpful.
If you have a local childrens hosptial, call them and ask for the social services dept or the dept that specializes in DS needs, even if you are not a patient there.
Sometimes its just opening up the yellowpages (yes those huge yellow books with phone numbers in them) and spending hours and days calling around for info. Its not fun but in the end you will make progress.

[ChetMC]

Going Into Debt

When we've been forced to carry debt (usually due to large, unexpected tax bills) we've used a low interest line of credit to carry the debt until we could get it paid off. Our financial advisor got us one with a rate around four or five percent. Paying off $10K cost us a few hundred dollars in interest when all was said and done, but it was better than carrying it on a credit card.