[NoliMum]

I am over $15k in debt and I have no way to pay it. This is debt that was around before I met my fiance, so he doesn't want to pay it off with his salary, which I would never expect of him anyway, and we couldn't afford that unless it was minimum payments only, which would not help get me out of debt at all. He has helped me with the bills for it in the past, just to keep me from going way under, but now it's just too much. I'm a SAHM and daycare would cost more than what I would make working, plus I am not comfortable leaving my toddler anyway.

We are planning to get married in 2008 but we want to get rid of the debt before then, because if the creditors find out we're married, they can sue my fiance/husband for the amount.

He contacted a lawyer who told him it would cost like $2500 to do Chap 13. (Or is it 7? I can't remember which is which.) I'd still have to find a job to pay just this. It will be easier, because I could maybe babysit part-time or something with my daughter in tow, and pay in installments.

Does anyone know anything about this process? Please help, I am so clueless and my fiance doesn't have time to research much, since he's working all day and being a father in the evenings.

:

 

[MommaCrystal]

I know very little about this process as I've never gone through it. But I am working with other couples who have debt. My first thought is that a person comes into a marriage debt and all. I'd be concerned about a mans commitment to me if he couldn't accept all of my "downsides." But that is besides the point.

15K is really not much at all. You didn't mention what kind of debt it is (bad car loan, student loans, credit cards). There are a million ways to negotiate with companies. Start with just one, assuming there are multiple, and work with them. They might be willing to come up with a payment plan of next to nothing. They might be willing to settle the debt for less than you currently owe even. Hold a garage sale, sell some stuff on ebay, and get rolling.

I wouldn't want to put my toddler in daycare either. But what about a part time job at night doing ANYTHING! Or taking another child in for daycare during the day. To help pay off our debt I took in a child and make $600 a month! That went a LONG way toward paying off our debt.

There are other options!

 

[shelbean91]

Depending on what type of debt it is, it's unable to be discharged w/bk. Ch 7 is erasing all debt adn ch 13 is repaying it at lower, settled amounts. Dh filed ch 7 before we were married and it stays on for 10 years, so still affected us a little bit.

As far as filing, accepting and actually making the decision to file is harder than the actual process itself. Once you decide, you have to list all your assets and liabilities, file, go to court, done.

 

[Mamm2]

Ummm, yeah I also would be concerned that your would be husband is not willing to work as a partner to help you with this

: when I married the husband, he had debt, but we worked on getting rid of that debt together.

I do understand not wanting to start a marriage with debt, but I am not sure rushing to file bankruptcy is the answer. I am no expert, but this damages your credit history for 7-10 years. That is longer then some marriages last. I would look into a local church who may help you for free or at a discount on how to get rid of debt. Check out Dave Ramsey, and whether you are Christian or not, his advice makes a lot of sense. I believe his website has a search function where you can find financial counselors who can help.

I found some at a very reasonable price to help with some financial counseling that I need.

Good Luck!!

 

[shelbean91]

It stays on your record for 7-10 years, but we bought a house 4 years after dh's bk was discharged w/the same interest rate as anyone else. The car was another story. We bought a car the day after we closed on our house with an 18% interest rate.

 

[Matt's Mom in MT]

Do you not feel that you have a moral obligation to repay the debt?

 

[NoliMum]

Wow, thank you for all the quick replies.

I don't have time to say much except my fiance IS helping me work on my debt as a partner, in that he's helping me find a way out of it. We have talked to the creditors and their offers of reducing the debt are great- some are 50%! But we still can't pay it, and they want a settlement paid in like 3 installments, which is too much at once for us.

I've been selling stuff on TP here, on Diaperswappers, and on Ebay. We're having a garage sale soon. But still some of that money ends up going to groceries and whatnot anyway.

We could do, like, $100 a month. That wouldn't even make a ripple. It certainly doesn't cover finance charges, late fees, etc. that I've racked up.

Ok, I really have to get off the computer now, I'm late! But please keep the advice coming.

 

[shelbean91]

Quote:

Originally Posted by Matt's Mom in MT Do you not feel that you have a moral obligation to repay the debt?

I don't see how that's answering the OP's question in any way.

 

[shelbean91]

You can also look in CCCS and do debt consolidation. Make sure it's a reputable company. They will look at your debt and work with the creditors to reduce the interest and fees.

This still impacts your credit score, but not as long.

 

[Leta]

I've never done a BK, but some folks that I am close to filed on their own using stuff from nolo.com. They spent less than $100. Neither of them has a law degree.

 

[Leta]

As far as moral obligation is concerned, I certainly cannot speak for the OP, but I have seen this thrown out one too many times in F&F, and I just can't let it slide anymore.

I have seen people write assuming that anyone who wants to settle, negotiate, or discharge a debt thru bankruptcy is just looking for a way out. And maybe some are. But I know three families who have filed bankruptcy, and NONE of them came to that decision lightly. They were all humiliated and humbled before they even began the process. In the case of one friend, it was the only way he could keep his home so he and his two boys wouldn't be sleeping their car.

The vast, vast majority (80%+) of American bankruptcies are predicated on outstanding medical bills. So if you have a moral problem with bankruptcy, email your congressperson and tell them to get on board with John Conyers and pass the Medicare for All Act.

I think it's immoral that banks issuing credit cards and mortgage companies are allowed to participate in predatory lending. I think it's immoral that your interest rates can go up, after a loan has already been taken out, because of your credit score. I think it's immoral that we expect 17 and 18 year old kids to navigate the twisted rubric of student loans, while the financial aid offices just assure these kids that it's not a big deal, just sign here.

In my belief system, all morality comes from God, and the God I believe in isn't short of cash.

 

[fuller2]

I don't think $15,000 is enough to declare bankruptcy over. Bankruptcy can have much longer-term consequences than this debt. You will be screwed if you try to buy a house, for instance--you will have to pay such high interest rates on a mortgage that you will end up spending *way* more than $15,000 extra because of it.

Babysitting at home with your own child present could be a really good idea. There is always someone looking for high-quality child care. In Boston anyway, you could make $80 a day doing that (8 hours at $10/hour -- that's a discount price for having your own kid there, the real rates for a nanny/babysitter are $12-$16/hour).

Even if you only charged $8/hour (and you really shouldn't do it for less than that, IMO) you could pay off that $15,000 in a year or so. ($8 x 8 hours = $64/day. $15,000/ $64 = 234 days of work, which is basically one year minus weekends)

Be aware of what this will do to your tax situation, of course. (The person you are babysitting for can get a tax refund for child care costs, and if they want to do that you will not be able to keep things "cash only," as it were...) If you are self-employed and make $15,000, you may end up paying as much as $3000 in taxes. (that is, if you are combining incomes with somone. If you are single, on the other hand, you might get the Earned Income Credit--which means you could have the government pay YOU.)

Even if you did it only half days, or 3 days a week (child care work is exhausting!!), you could still get it paid off in a couple of years.

Think in the long term about this--don't get fixated on "must resolve by wedding day." That may result in your making unwise decisions.

Also--are you in a community property state? Are you sure your debt will affect your husband once you are married? Some creditors will bald-face lie to you in order to scare you or force you to pay.

 

[organicmommy]

I want to second doing daycare in your home. I had a daycare in MN where I was only able to charge 2.00 an hour per child or 90 a week per child. I did 24 hour care for a long time which I was paid more. At one point (my lowest I was bringing in around 300 a week at my highest I was bringing in 700 a week and I was never full to state standards.
As for tax's yes you will have to report it, but you also get SO many deductions that I always came out at a loss. I am looking at taking in a couple of kids again due to a change in our finances with getting a differnt house to rent. It is a great way to have someone for your child to play with and also a great way to bring in some money.
You really would be surprised how fast it adds up. My first year opening the daycare I brought in over 20000 to the house. That would pay off your debt and give you a little more.
On top of the money paid by your parents, it will increase your food use but you also can get on the food program that is sponsored through the state that more than covered our grocery bills as I always cooked from scratch to keep our costs down. For our house and the daycare I spent under 100 a week on groceries and I never had a check that was under 400 for the month when I was doing more than a couple kids.

It is something you should really look into.

As for bankruptcy, if its the only way you feel you can get out, then you have to look very hard at it, it isn't the end all to be all, and now they make you pay things off anyways, so it goes on your credit as a horrible hit and you have to pay it back.

Hugs
Jessica

 

[snv1492]

Quote:

I think it's amoral that banks issuing credit cards and mortgage companies are allowed to participate in predatory lending. I think it's amoral that your interest rates can go up, after a loan has already been taken out, because of your credit score. I think it's amoral that we expect 17 and 18 year old kids to navigate the twisted rubric of student loans, while the financial aid offices just assure these kids that it's not a big deal, just sign here.

I agree. Although those things are all immoral, not amoral.

Amoral is the lack of capacity for morals. Animals and small children are amoral. Immoral is the opposite of moral.

The relief bankruptcy one gave to people essentially ended in October 2005, thanks to Bush's new pro-business bankruptcy act. You used to just be able to file for bankruptcy if you came to the conclusion that you couldn't pay your bills. Now they don't let you file until you've completed a government approved credit counseling course.

The ulterior purpose of the "counseling" of course is to figure out a budget that will enable you to pay back your debt. The "counselors" job is to figure out a way to make sure your creditors get their money from you. While you don't have to follow the budget they come up with, you are required to submit it to the judge at your hearing, and he will inevitably take their proposed budget into consideration. Basically, the judge could very well deny you bankruptcy because, based on the budget they came up with, you clearly have enough money to pay everything back, regardless of how impractical it would be for you to actually live on that budget.

Even if you are are declared bankrupt under Chapter 7 (the one that wipes out debt), your debt will not be wiped out like it used to be. Now you need to complete a series of debt management courses and additional credit counseling before your debt will be eliminated.

Chapter 7 used to be the most popular form of bankruptcy, because it wipes out most of your debt. So the new laws put a stop to that. It is now almost impossible to qualify for Chapter 7 under the new restrictions. You'll probably have to file under Chapter 13, which requires paying off your creditors at a reduced rate. If that is the case, you're better off not declaring bankruptcy at all (which is exactly what they want) and just negotiate a lower rate directly with your creditors, because if you have to pay them back anyway, there is no reason to have a bankruptcy on your record too.

You will definitely need a lawyer now. You can't just fill out a form anymore and file for bankruptcy. And their rates just went up because the new law also made it more difficult for lawyers to handle bankruptcy cases.

The new laws are overwhelmingly pro-business. Their goal isn't relief for the debtor, it's relief for the creditor, and is just another attempt by this administration to screw over the common person.

 

[Leta]

Quote:

Originally Posted by snv1492 I agree. Although those things are all immoral, not amoral.

Duly noted.

 

[2Sweeties1Angel]

Quote:

Do you not feel that you have a moral obligation to repay the debt?

I guess I have no morals at all because I'm going to file Chapter 7

 

[arahzel]

How long have you had the debt and have you paid anything on any of them to make them active? I only ask because if you only have a few years before it's discharged, it might just be worth the wait.

Possibly not the most responsible way, but it certainly might be the smartest way.

Personally, I had a bad experiece with an auto loan where I returned the car (ahead on payments) because I was joining the military. It wasn't until a year later, after they had auctioned the car, that I was responsible for the difference owed to the bank. It was also listed as an involuntary repossession. I was pretty upset about it already and I tried working with the guy at the number listed on the letter... but he really scared me when he told me not to tell my supervisor because they'd throw me out of the military. I was trying to work really hard with him, offering just to make an automatic payment. No... he wanted it all up front or nothing. He wanted me to borrow the money. He wanted post-dated checks, too. After he told me they'd kick me out I went to my first shirt crying, and he had me call them and give them permission to talk to them.

FS ripped the dude a new one up and down. I got a call back from him and he yelled at ME, telling me that all bets were off and that I had to pay nearly $8K instead of the $1200 deal he was offering me.

I ignored them, and since I had never made a payment to make the account active again, it was discharged 6 years later. Ta-da! And now I have perfect credit.

I have always been responsible about money, and that one time screwed me for 7 years, but it was worth the wait for me. I can't speak for anyone else on this though. It was hard, but I did it.

Credit collectors will do anything to get your money. They don't get paid till they get the account settled.

 

[lmonter]

Quote:

Originally Posted by MommaCrystal I know very little about this process as I've never gone through it. But I am working with other couples who have debt. My first thought is that a person comes into a marriage debt and all. I'd be concerned about a mans commitment to me if he couldn't accept all of my "downsides." But that is besides the point.

:
I wasn't thrilled that dh had $22K in student loans or $12K on credit cards from several semesters of tuition, but I married him nonetheless. We're working together on it a piece at a time, even when I was earning an income pre-kids. But we're also more of the joint-finances kind of persuasion, too, which isn't as common as it seems it used to be.

 

[mommyddeville]

I'm not going to tell you whether or not to declare bankruptcy. Only you can decide that. But here's what happened to me:

DH and I had about 15k in debt, about a year ago. Last year, we committed ourselves to paying it back. We cut down on everything. We spent less on food, combined errands to save gas, didn't use air conditioning, everything. If you've already done this, then kudos to you. We had almost no money to send to pay off debt, but we started. Call the banks/lending institutions and ask if you can do anything to cause all late payments and fees to stop accruing. That helps a lot. Then, just start paying with all the extra money you have. Sometimes, I'd have $1 or $5 extra and pay it to a debt online. We got Earned Income Tax Credit this last year, and used that $$$ straight toward debt. In one year, we paid off a little over $8,000, with a lot of help from the tax return.

Now that we're over halfway there, it's getting easier. There's more money to send to each creditor, each month, now that there are fewer creditors. We'll be debt free before the end of the year (well, save for the mortgage.) If you would have told me we could be out of debt in two years, a year ago, I'd have laughed in your face.

On another note, I do not blame you if you declare bankruptcy. If you've really tried and just can't pay it back and still have food money, then free yourself. Don't carry that heavy burden anymore.

***ETA: A lot of people have written that $15k isn't enough money to declare bankruptcy over. It completely depends on your situation. If you make $15k/year, then you are honestly bankrupt. If you make $100k/year, then I'd seriously consider trying to pay it back.

 

[jjrsgirl]

Quote:

Originally Posted by NoliMum I am over $15k in debt and I have no way to pay it. This is debt that was around before I met my fiance, so he doesn't want to pay it off with his salary, which I would never expect of him anyway, and we couldn't afford that unless it was minimum payments only, which would not help get me out of debt at all. He has helped me with the bills for it in the past, just to keep me from going way under, but now it's just too much. I'm a SAHM and daycare would cost more than what I would make working, plus I am not comfortable leaving my toddler anyway. We are planning to get married in 2008 but we want to get rid of the debt before then, because if the creditors find out we're married, they can sue my fiance/husband for the amount. He contacted a lawyer who told him it would cost like $2500 to do Chap 13. (Or is it 7? I can't remember which is which.) I'd still have to find a job to pay just this. It will be easier, because I could maybe babysit part-time or something with my daughter in tow, and pay in installments. Does anyone know anything about this process? Please help, I am so clueless and my fiance doesn't have time to research much, since he's working all day and being a father in the evenings. :

We're married and going through debt consolidation with a company we found on the US Dept. of Justice website. VERY reputable and have been very helpful. It's hard b/c we have to budget like mad, but I'd definitely recommend that over filing for bankruptcy. Even though the bankruptcy will be removed from your credit history in something like 10 years, most creditors and loan establishments ask if you've ever filed for bankruptcy. I'd do everything you can to NOT file. BTW, if you want the name of the company we consolidate through, just PM me.

GOOD LUCK! xoxo