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Getting Out of Debt with DR, Oct 2009 - Page 10

post #181 of 219
Quote:
Originally Posted by Sarah8Jane View Post
How much of the $40k do the car loans, cc, and medical bills represent? How much will the bankrupcy move?

Is there any way to get the income up? PT work, in home child care, second job? Paper route, pizza delivery?

I personally would just keep working the plan with the mortgage company, and not confuse them with extra payments.

If you want to post your budget, we can give you suggestions for cutting unnecessary expenses and to get the snowball rolling.
The bankruptcy would cut out all but $13,851 ($2,185 to family and $1,577 to taxes. The rest to student loans.).

There isn't any way to get the income up. If I take on more hours it requires us utilizing a paid daycare, which would negate any money I make from the extra hours. DH already works 50 hrs/wk. If he worked more than that, it would mean we never see him, which I personally am not willing to do to our kids. They need to see their parents. I guess I could try posting on CL again for a daycare child since I work two days a week right now...in fact, I do plan on doing that as soon as I can.

We're really bad at a paper budget right now, so we're taking this next couple of weeks to keep track of what we spend so we CAN figure out what we can cut out. Once we have an account of our spending, I'll definitely share.
post #182 of 219
justamama - You can do it!

I have a couple of apartment updates. We got the apartment we wanted and we can use deposit insurance so I can put the $$ I was saving for the deposit toward our debt.

I will also have to buy all new furniture and a few toys for DD so the whole savings won't go toward debt but a large chunk can. w00t!
post #183 of 219
justamama- Unless I'm missing something big, it seems like you'd have somewhere in the range of 600$ give or take for debt repayment. Bankruptcy doesn't change habits, and hard lessons are longer lasting than easy fixes. We had a similar mortgage (to your normal one) and we had significantly less income, it can be done!
post #184 of 219
Quote:
Originally Posted by lalaland42 View Post

I have a couple of apartment updates. We got the apartment we wanted and we can use deposit insurance so I can put the $$ I was saving for the deposit toward our debt.
phew! glad you can use deposit insurance and free up some of that money. that was quite a chuck they were going to need. that's great news
post #185 of 219
justamama
It sounds like you have a budgeting problem. You should have $1,959 left every month for gas/groceries/bills/spending/daycare/household. Even with your mortgage paying extra to get caught up your at 31% of your take home income on your mortgage. I think you can do it, you just need to cut your spending.
It sounds like you are on pre-baby step 1. Get current with your bills.
Its hard. Budgeting is hard. Limiting your self is hard.
But you can do it!
It can be done.
If you post a budget of your household expenses we can try to help what area's you may be able to cut.
Good luck.
post #186 of 219
Quote:
Originally Posted by Rev1053 View Post
Now November is going to be hard. My father is coming to visit for 6 weeks. He is going to be a huge burden on us financially, and I am really worried on how to keep him reigned in financially. He works as a missionary in Thailand and lives off of nothing, he used all his money on tickets for him and his wife. He is literally coming to stay with $10 in his bank account. My sister and I agreed to sort of split the expense of him coming but it still should be significant. But we are happy to see him just the same! Just crossing my fingers that the damage is not too bad.
Have a great visit!!
post #187 of 219
Quote:
Originally Posted by justamama View Post
Okay. Our situation is weird, so I'm not sure how to go about the baby steps.

We currently have 2 paid for vehicles. A 17 year old tempo that DH drives back and forth to work and my van. A 2001 in great condition (some cosmetic stuff, but runs perfectly) with 68k miles and a warranty until 155k miles. Seeing as we're expecting our third kid and we frequently have my younger sister or a friend's child with us, selling the van isn't an option.

We'll bring home around $2850 a month. We are $3k behind on our mortgage, so our normally $688 payment (incl. tax/ins) is now $891 until the $3k is paid off. All other bills are current, or can easily be brought current.

The problem is our debt. We have around $40k in debt. 3 vehicle loans (2 cars and a motorcycle- we gave them to the bank last year because we couldn't afford the payments anymore), credit cards, school tuition (not student loans), student loans, and some medical bills. All of it is currently in collections or on its way there. The credit cards haven't been touched in over a year. We never, ever plan on touching a credit card or a loan (except a 15yr mortgage) again. We currently are paying nothing on our debt. :x

Last year when we realized how far in over our heads we were, we decided to file bankruptcy. We have paid $750 towards our lawyer so far, and owe around $400 more before he files anything. If we decide not to file, we lose the $750. DH wants to file bankruptcy on the cc and the cars, and medical bills over $2k. Everything else we would put into our debt snowball, along with money owed to family members.

We also have no savings. No baby EF, no regular EF, not even $5 in the glovebox in case we run out of gas.

WWYD? And does the $3k on the mortgage come before baby step #1 or after, since we have the payment plan worked out?
Honestly at this point Id pay nothing on the debt till you get your heads above water and BR isnt in the cards either right now you can't afford it. A better idea of your budget would help. You house payment should be the one of the first things you pay. Food , house , lights , transportation.

Id not file BR you can often settle those debts ( for allot less) once you get your budget working and save money up. So say you owe $4000 on a car you defualted on you can get a settlement in writing for say $3000. You though have to know how to talk to them and how to handle the settlement.

Have you read Dave Ramseys book? IMO you might want to look into the class also it will really help you guys come up with a plan.
post #188 of 219
Send any spare good thoughts this way. Dh went into his union yesterday and his BA told him that a different hall should have a decent amount of work coming down the pipes. We'd have to pull the kids from school so we could go with, but that was the original plan. If it doesn't come through, DH has a concrete plan for finishing the rest of his skills tests (He's a welder, so there are multiple processes and materials to learn on). I feel a bit better. Now if I can figure out a decent budget that still lets us pay off the last of the CC before income tax return time
post #189 of 219
I just finished paying off our highest interest CC today!!! We still have $11,000 between 2 different cards but I'm very excited. Since I did our excel budget for Sept & Oct I've drastically reduced our grocery bill by more than half & my out look is much more positive, I feel powerful seeing "where it all goes" and having more control over it by tracking it & having motivation to stretch it further. I don't know how we have managed to get by all this time without a budget! It is such an eye opener! I didn't even really know how much we made each month. I have started using coupons, playing the CVS game & cooking cheaper meals like soups, beans & eggs more often. We temporarily stopped retirement contributions when DH's company "temporarily" stopped matching due to tough economic times. His company reduced everyone's pay by 10% & insurance premiums & co-payments went up. In addition to an EF we are starting a Christmas fund for next year as well as a travel fund because we have to travel in November for a wedding. We don't want to end up in a situation where we are wanting to charge next year. So this is the first month that we have saved! Which goes against everything I've told myself for years. "We can't save until we are paid off". But it backfires because expenses come up & we aren't prepared for them, boom more CC debt. Last year we used our whole tax return towards paying down CC bills. Not considering upcoming expenses. But now I see that I can continue to pay these bills off diligently & at the same time put a little aside for upcoming expenses so that we don't have to use the cards as back up. So far we have started saving for EF. We had car repairs on both cars that was over $600 unexpected in 2 months but we still came out ahead paid more debt & even saved some!

We have a FHA loan on our house & I misunderstood it until today when I called to clarify. I thought that we paid PMI on the loan & at 5 years (in 8 months) we would not have to pay any longer, but I found out that I'm wrong... With an FHA loan we pay FHA not PMI & after 5 years you can get rid of it only if you have 78% left on the loan, which we will not.

I think that we are at BS2.2 I'm not super familiar with DR only what I've read here over the last few months, so I'm matching up what we've done with the list on the first post, am I right? Or do you have to save up $1000 before moving on to BS2?
post #190 of 219
Quote:
Originally Posted by CookiePie View Post
I just finished paying off our highest interest CC today!!!
Woo hoo!!!
Quote:
I think that we are at BS2.2 I'm not super familiar with DR only what I've read here over the last few months, so I'm matching up what we've done with the list on the first post, am I right? Or do you have to save up $1000 before moving on to BS2?
Save up the $1000 baby emergency fund (BS1) before moving onto BS2, which is snowballing debt.
post #191 of 219
We're on our way. I'm thinking of picking up a few extra supply jobs so that we can get this car paid off this month as opposed to next- just for poops and giggles.

It is so great having a PLAN. $400 would easily just have drifted off throughout the month this time last year. Now it's all accounted for and being put to work. It feels so good.

I also love that I don't feel that I'm "owed" anything. Before, if I got extra hours or some extra income of some sort (gift, refund, etc.) it was free game because we deserved it and would just get wasted. Dropping the martyr attitude is very liberating.
post #192 of 219
Quote:
Originally Posted by annethcz View Post
Woo hoo!!!

Save up the $1000 baby emergency fund (BS1) before moving onto BS2, which is snowballing debt.
So you would pay the minimums if necessary, until you have the $1000 EF?
post #193 of 219
Quote:
Originally Posted by CookiePie View Post
So you would pay the minimums if necessary, until you have the $1000 EF?
Yes.

You need that emergency fund in place so that you never have to use credit cards again. Once you have saved up the money then start the debt snowball. Until then use the money you have started with your snowball to put into a savings account.
post #194 of 219
Quote:
Originally Posted by CookiePie View Post
So you would pay the minimums if necessary, until you have the $1000 EF?
yes. absolutely.
post #195 of 219
Bah - house not looking like a deal. we have a minor roof issue and DH is freaking out. Probably a good thing though I told him I want to make REAL sure it wasn't an easy fix ( it has a metal and slate roof) before bailing out of hte contract.

Its ok though at least we had a good run LOL. guess everyone has to fall off the wagon at some point right?
post #196 of 219
Quote:
Originally Posted by Softmama View Post
yes. absolutely.
Quote:
Originally Posted by Rev1053 View Post
Yes.

You need that emergency fund in place so that you never have to use credit cards again. Once you have saved up the money then start the debt snowball. Until then use the money you have started with your snowball to put into a savings account.
Thank you both! I'm feeling very encouraged to tackle this once & for all!
post #197 of 219
Argh! I'm so annoyed. I followed Paypal's instructions for canceling subscriptions and none came up. Then today I was charged $30 for renewing a subscription! I contacted both Paypal and the business owner and asked for a cancellation and a refund, and I hope they do right by me. *grump*
post #198 of 219
P1gg1e- I am so sorry! Is the roof so bad that the house is not worth it anymore? Or can you submit a re-offer for less what it would cost to fix the roof? The house has been on the market forever, maybe they would take less with the new information?

Annettemarie - Crossing my fingers that you get your money back!

DH gets paid tomorrow and for some reason his work didn't pay him for any of his overtime for 2 weeks! Ugh. His whole paycheck can still be put into savings but its much less then I originally expected. Though this should cause his first paycheck in November to be HUGE, since it will have 4 weeks of overtime on it. Still frustrating though.
post #199 of 219
Quote:
Originally Posted by Rev1053 View Post
P1gg1e- I am so sorry! Is the roof so bad that the house is not worth it anymore? Or can you submit a re-offer for less what it would cost to fix the roof? The house has been on the market forever, maybe they would take less with the new information?

Annettemarie - Crossing my fingers that you get your money back!

DH gets paid tomorrow and for some reason his work didn't pay him for any of his overtime for 2 weeks! Ugh. His whole paycheck can still be put into savings but its much less then I originally expected. Though this should cause his first paycheck in November to be HUGE, since it will have 4 weeks of overtime on it. Still frustrating though.
Ugh that would be frustrating

I'm hoping DH will agree to asking for a roof credit. It has a great roof its metal and slate they last pretty much for ever.... DH is just stressed. I told him we owe it to ourselves and everyone thats watched our kids for this LOL to take a good look at the roof and the leak and figure out the worst case cost it would take. I would like $3000 I think at closing ( we didn't ask for closing costs) for the roof and a section of the first floor outside wall that needs fixed...plus a few other minor issues...I'm trying not to be needy but I think its fair.
post #200 of 219
Thread Starter 
justamama, what does dh do? Anyway to move up/make more in his current field? Your choices are make more or spend less or some combo of the two. I would strongly recommend seeing where every penny of your money goes. If you use a lot of debit, get your bank statement and track your past few months spending. If you don't have records like that, start today, every $ gets tracked til you see if there are any problems areas. It looks like you should have money left over to help you catch up to the mortgage, pay some debts so you need to find out why you don't. Are you getting wic or any other help? if not, do apply. Four walls is your priority, house, food, utilities etc. Everything else waits.

lalaland42, great news on the apt!

RoadWorkAhead, thinking of your dh, I hope something comes through at the other hall.

CookiePie, great job You are doing great!

p1gg1e, do a price holdback for the amount of a new roof.

annettemarie, I got refunded recently through the company (shutterfly) so I'm hoping yours comes through too.

Rev1053, whole check into savings? That's great! Sorry its less but just imagine what Novs will look like!

Almost done with Oct, time to start tweaking Novembers budget!
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