Climbing out of the debt hole... Anybody wanna join?

[magster]

Over the past week I have finally gotten to see just how bad our finances are.

DH took over budgeting, paying bills, etc. when DD was born 3.5 years ago and he had left me in the dark as to just how bad the situation actually has become, of course to spare me. Well, now there was nowhere left to turn and boy, was it a shocker to face reality!

We are up way above our heads in CC debts and bank loans. CCs here (Brazil) charge 15% interest a month and basically living off the cards and only paying the minimum payment for the past two years means that we have incorred a horrific debt with Mastercard and Visa. There's no such thing as filing bankruptcy down here.

We are self-employed (teachers) and rent a house, there's nothing to sell or even to pawn...

But we are going to get out of debt. I refuse to continue living like this. I get a knot in my stomach thinking about people our age (mid-thirties) already being well-prepared for retirement and we are still paying off student loans I took out 16 years ago.

I thought it would be nice to find somebody in the same situation or one similar to have someone to encourage me to keep on and the other way around. Is anybody in???

[hsingmamato3]

I'm in the same situation. Actually today we are hopefully hearing from a loan guy to do a consolidation loan for our student loans and visas - so we can start climbing out of debt. Gotta go feed a baby but wanted to write quickly and say we are in a very similar situation!

[magster]

Hi Andra.

I hope everything works out with the loan consolidation today.

[ankh]

I'm in, sometimes I feel pressure to buy as we are in our 30's two kids and NOTHING but cc debt. All our friends own houses, cars etc(we have car payments on our little car)

I wonder if I feel the pressure for buying over renting because all my friends say things like: "it would be so great if you got on the property ladder and stopped paying someone elses mortgage etc." I'm not sure buying would be right.
I lie awake at night worrying about the interest we pay on the bloody ccs
Hopefully with DHs bonus we can get some of our debt down.

[Herausgeber]

Magster, are you still adding to the debt now? Or is it holding steady and it's just a matter of finding the money in your budget to pay down the old debts?

The idea of no bankruptcy option truely horrifies me.

[BathrobeGoddess]

We are at the beginning of climbing out of CC debt. I posted about it a few weeks ago and I has so many helpful answers! I am right there with you, sister!

[magster]

Originally Posted by Herausgeber

Magster, are you still adding to the debt now? Or is it holding steady and it's just a matter of finding the money in your budget to pay down the old debts?

The idea of no bankruptcy option truely horrifies me.

Tell me about it! I sigh with envy when I read about people in the US declaring personal bankruptcy. Although I know that it surely isn't a walk in the park going through that either.

There is no money to be found within the budget. Dh is going to start teaching 14 hours a day again. It wrecks our family life but there's no other option. I go to college and work with translations from home (yk, juggling a three-year-old and trying to get some work done without her noticing it ).

To fill some money in that black abyss of CC debt we will once again refinance our small car. We still owe a lot of money on it but can refinance it at a mere 2% interest a month against the 15% of the CCs. Robbing Peter to pay Paul and all that, but there's no other way right now.

Bathrobegodess (love the name!), I will check out your thread.

[magster]

Originally Posted by lisa72

I'm in, sometimes I feel pressure to buy as we are in our 30's two kids and NOTHING but cc debt. All our friends own houses, cars etc(we have car payments on our little car)

I wonder if I feel the pressure for buying over renting because all my friends say things like: "it would be so great if you got on the property ladder and stopped paying someone elses mortgage etc." I'm not sure buying would be right.

I have also heard that buying is at least as expensive as renting. Whether it holds true or not I don't know, we have always been renters (we have been married for nearly 15 years).
What I do know, is that I would like the certainty that if everything else went wrong, we would have a place to call our own. YK, if you don't have money at all, you can let your own place go to hell and still live there but you cannot not pay rent (at least not without getting evicted ).

If all came to all, we could probably go live with my ILs but that would come at an extremely high cost. I honestly don't think my own family would take us in (I cringe just typing that, how embarrashing to admit). Not that we are there AT ALL, thanks heavens, I am just musing out loud about worst case scenarios...

Hope we can be a support for one another in fighting the CC debt monster.

[Poddi]

15% a month? Isn't that like 180% a year? That's legal there? Most people here wouldn't be able to climb out of that hole. I admire your determination.

[Stayseeliz]

Originally Posted by lisa72

I wonder if I feel the pressure for buying over renting because all my friends say things like: "it would be so great if you got on the property ladder and stopped paying someone elses mortgage etc." I'm not sure buying would be right.

We bought last year thinking we were "throwing away" our money renting when we had tons of cc debt, student loans and a personal loan. That was SUCH a mistake. Houses for the most part aren't good investments b/c they require upkeep, repairs and they're typically more expensive. We received a small inheritance allowing us to pay off our CC debt but if not for that we'd be in big trouble financially.

We're selling our house and going back to renting so we can save up some money for a house down the road and pay off the 8k in student loans I have left.

[magster]

Originally Posted by Poddi

15% a month? Isn't that like 180% a year? That's legal there? Most people here wouldn't be able to climb out of that hole. I admire your determination.

There's nothing to do but try at least. Unfortunately, your calculations are correct. The Brazilian Constitution prohibits exorbitant interest rates but luckily for the banks and financing institutes 200% anually is only considered borderline exorbitant down here. :

[oneotamama]

I'm in. What'cha got in mind for a solution? I think I'd need someone to live w/me and watch over my shoulder 24/7!!

I filed bankruptcy last fall so I don't have cc's anymore, but my what a person can't do w/paypal.

[Kleine Hexe]

I want to get my CC paid off. DH says that when we get the CC paid we can have another babe.

So how do to it?

[Herausgeber]

How much do you owe, at what interest rate, and how much do you think you could put toward it every week/two weeks/month?

[hsingmamato3]

We are still waiting to hear about our consolidation loan... the guy we're talking to called today and said he doesn't have an approval for us yet, but is talking to a lender who is "sympathetic to our situation" so I hope that is a good thing!

Part of getting the consolidation loan is so we qualify to buy a van as we no longer all fit into our car and going without a vehicle isn't an option here. Hopefully we will get the loan.

If not we'll have to just keep pumping as much as we can toward the credit cards -- and CUT THEM UP!! That's the only way we'll ever pay them down/off.

[Collinsmom]

Originally Posted by oneotamama

I'm in. I filed bankruptcy last fall so I don't have cc's anymore, but my what a person can't do w/paypal.

Are you U.S.? I ask because as the OP stated DH took over almost 8 months ago and now we are looking at filing. I was going to be SAHM but have to go back. How have things gone for you through it all?

As a side note with me going back we MAY be able to refi our house. Does anyone have any experience w/that?

Thanks

[magster]

I hope everybody is having a nice, frugal day and that the credit cards aren't being used!

I have started writing down every single penny spent. It feels weird but it has been en eye-opener to how much "boredom" shopping I have been doing, you know, the kind where you have half an hour to kill and you decide to stop by the supermarket or an outlet just to browse and you end up buying something (or a lot). Now I try to remember to take a book so I can sit and read instead of killing time inside shops. It also helps remembering that a "good deal" isn't that good at all when you charge it to your credit card and you will end up paying interest ad nauseum on the purchase. : (Hey, new smilies! Neat!).

Have a great day you all. Remember: We can do it!

[quelindo]

I need to join this thread. I used to be super-frugal, got my DH and I out of a MAJOR financial mess (he was divorced with tons of debt), got us to the point of having no loans beyond a student loan and a mortgage (and this with paying $20,000 for infertility treatments), and then when my son was born ten months ago it all fell apart. I just didn't have the time or energy to spend on our budget the way I used to, and it was way too easy to buy stuff online. None of it was really all that extravagant, but it all added up. (Stuff for ds, new clothes for me since I lost a ton of weight BF'ing, work clothes for dh, etc.) Plus we needed a new furnace and a new roof this past winter/spring.

Anyway, it's very depressing, since we dislike the end of town we're on (we're here temporarily to be close to my stepsons while they're in high school) and hope to move to a much more expensive (but liberal and cool) part of town in three more years. Now we have a bunch of credit card debt and unless I get my act in gear I don't see how it's gonna happen. But it's been a dream of mine to live in that area and I want my son to grow up there, not here!

So I need a kick in the pants and support. I'm a member of a frugal living board but it's very conservative and I don't feel at home there anymore after having my son.

[oneotamama]

Originally Posted by Collinsmom

Are you U.S.? I ask because as the OP stated DH took over almost 8 months ago and now we are looking at filing. I was going to be SAHM but have to go back. How have things gone for you through it all?

As a side note with me going back we MAY be able to refi our house. Does anyone have any experience w/that?

Thanks

Yes, I'm in the U.S. And our troubles began when I took a hands off approach as well! Dh is self employed and I couldn't stand not knowing how much money was (or wasn't) coming in. He doesn't keep the check book balanced either. Drove me nuts so I handed it over to him. We accumulated so much cc debt that I didn't even know how much I had. I honestly had no idea until my attorney pulled up my credit report. I filed on $48K worth of cc debt. My dh has another $50K, but he didn't file.

I filed before the laws changed back in October. It was easy when I did it. I've heard that it's tougher now. I believe that they want to set you up on a payment plan now whereas when I filed, it was all basically wiped clean. I think now you have to go to counseling too, but as far as I know I don't have to. I received my dishcharge papers in March and I haven't heard anything about going to any classes.

In all honesty, it was too easy. Have I learned a lesson? Yes and no. I get cc offers already in the mail. And I don't send them back. So in that sense, yes I've learned my lesson. But I still spend too much of my funded paypal, so in that way I haven't learned anything. Like I'll sell some stuff thinking I'm going to transfer it to my checking, but then I'll blow it on something on the fsot board that I don't need.

If you want more details, you can pm for specifics. I lived in MN when I filed if that makes a difference.

[oneotamama]

I was also going to comment on the refinancing of your house too. Yep, we did that too. Big mistake. We originally bought our house in MN from my MIL for around $43K. A couple years later we refinanced to pay off cc debt. Brought the mortgage up to $80K. We decided to remodel the basement and pay off even more cc debt a couple years after that. Okay, so then we had our mortgage at $120K. The mortgage company appraised the house at $124K.

Two years after that we put the house on the market. It sat for 6 months before we finally fell behind on our payments and it entered foreclosure (I kept our house out of my personal bankruptcy). Then the mortgage company sent another guy to appraise the property. He appraised it at $84K. What ended up happening is that we sold our house through something called a "quick sale." We finally accepted an offer that was less than the appraised value. When it was all said and done our mortgage company lost $34K from what we owed on our mortgage and what it sold for. It won't effect my dh's credit and we don't get taxed on it either.

Okay, where's that little smilie where the guy is hiding under the chair?! That's me. We're in terrible financial distress and it keeps happening over and over and over. But what I'm getting at w/the refinancing is that yes, it may lower your interest rates, but it's almost guaranteed that they'll borrow you too much money against your house. I guess I know that's something we won't do again. We won't put our house in jeopardy by borrowing too much against it.