Credit Card Mess-Bankruptcy?

Yeah, I called them already (once Saturday and once this morning) and they said they won't know if it'll remove me from the program until my next statement prints on 12/8. Usually I do pay bills in advance. But I didn't have the money until the 26th. That's how close things are getting. I'll try to work with them as much as I can, but if they kick my interest rate up to 25%+, I can't even afford to pay a monthly interest-only payment! What are the options then? Do cc companies give you a second chance?

Yeah, threaten bankruptcy. Really, you might consider filing bankruptcy.

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with an amount that high it could go to arbitration and you will be sued for the full amount. I would try to work out a settlement first (they will offer to let you pay a percentage of what you owe). your best bet would to be to consult a bankruptcy lawyer possibley or a financial adviser possibly.

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While I'm not going to comment about whether or not you should file bankruptcy, I am going to ask about the numbers you posted.

Monthly Income: $2000-2200
Monthly Expenses: $2500-2700
Monthly Shortfall: $300-700

Even if you file bankruptcy and eliminate the $284/month credit card payment, you're still going to be short every month. If you do file bankruptcy, you will not be able to get another credit card. How will you make up the difference between your income and expenses?

Regardless of what you decide to do about your credit card debt, it is clear that you can't go on the way you have been. You either need to increase your income or decrease your expenses. You mentioned that your DH is already working 2 part time jobs. Can he get a full-time job? A paper route? Could you provide in-home daycare? Could you move someplace less expensive? Give up extras such as cable, cell phones, internet, eating out, etc.?

My husband has been trying to find a full time job since last June. He would love a full time job. He works 11 hours a day with an hour in between going from one job to the next and still only makes between $1600 and $2000 a month.

We live in a 1000 square foot house built in 1969 and our mortgage is $690 a month. We already got rid of cable and cell phones. I do think we can lower the amount we spend on groceries and I have an appointment to apply for food stamps on Monday.

My grandma moved in with us in September and she is willing and able to contribute a couple hundred dollars a month. She can make up $200 a month, but not the $500 or $600 a month we usually lack. With my disability and energy issues (and homeschooling my son and taking care of my grandma), I don't think I can add on another big responsibility like in-home childcare right now. I do babysit a friend's kids periodically and she pays $10 an hour.

We stopped charging on our ccs (except for a couple of times we needed expensive car work done) at least a year before my husband lost his job. We were working to get out of debt and our plan was to be done with credit cards after our debt was paid off. We have struggled through 6 months of unemployment and 2 months of underemployment and have paid all of our bills (including the credit cards) the whole time. We just can't keep it up. But not paying bills is scary and bankruptcy is something we never thought we'd be considering.

It is very much worth a shot to call ALL of your cards, honestly explain your situation, and YES, mention the word bankruptcy. Do not just stop paying them. Your husband is right to want to avoid bankruptcy at all costs. It is not an easy fix, at all. If you can negotiate something with your creditors yourself, you can somewhat salvage your credit score -- should you need it to make a major purchase, such as a home or a car. Also your credit score can be checked when applying for new jobs, and for car insurance, and the list goes on... Good luck.

I don't mind posting my expenses, but I did it here just two months ago. I made the cuts that were recommended except that we are keeping both cars (6-7 yo used cars, worth more than we owe). Dh uses his car for work and I use mine for medical appointments for me, my son, and my grandma (in addition to errands and outings.) We have horrible public transportation here.

Here are my expenses:

Mortgage 690
Electric 103
Water 40
Gas bill 60
Internet/Phone 60
Groceries/Household 400 (for 3 adults and 1 child)

Medicare & supplement 300
Medical copays 75

Car payments 328
Car insurance 169
Gas 140

Credit card bills 285
Pet food and heartworm/flea stuff 40 (2 dogs)

Total: $2690

HM2:
I'd already worked out a deal with the cc company--but as I mentioned in my first post our last payment was a few days late and the cc company said most likely that will kick us off the program.

But even if that hadn't happened, we make $500 or so less than our expenses and my husband's second part-time job (cell phone company) will be over in mid-January. We just can't afford to keep paying everything.

Jenelle:
I haven't looked into other car insurance because we get a discounted rate since our home and car insurance is both with Allstate and it's been our insurance company since we first started driving. But I will check out progressive.com just to see. We refinanced 2 years ago, so we don't have much equity right now.

My grandma who lives with us is the one who bailed us out for two months. I just told her about our entire situation yesterday. She can help us out with $200 a month (a very reasonable amount for the additional living expenses that having another adult in our house creates). We thought we were just temporarily behind because of 3 weeks of no work for my dh in October. But it hasn't gotten better and we can't catch up because we make less than we need. And my husband is getting less hours from his other part-time job--just 15 hours this week instead of the 20-25 that he used to get. His "permanent" part-time flooring job hours depend on how much work the contractor has that week.

I really just don't know what to do. :

Maybe I am wrong about your car insurance... I mean, it depends on many factors -- your claim history, your credit score, your deductibles, to name a few. It just jumped out at me because we are paying less than that, with a very well-known and reputable company -- for 3 vehicles AND a motorcycle. (1992, 2003, 2004, 2008)

Your situation is tough. It sounds like you've put the effort in with trying to work out your budget... I thought your grocery looked very good. I guess it is when people just plain can't keep up and make ends meet that they do consider filing bankruptcy. I just hate to see folks have to take that road.

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: Try GEICO. I have insurance through them for 2 cars and it is 1/2 what you are paying. I was with Allstate and I found them to be more expensive.

I am sort of in the same boat as you. Dh brings home $1750 a month after insurance deductions, etc. We have $17,400 in credit card debt. Our mortgage is approx $600 a month. Somehow we just don't make it even though we don't spend anything extra on ourselves. If I don't sell something on ebay, then no one gets any clothes or extras. Why I am confused is because my payment is about $225 a month at 8% interest. Yours should be lower than that at 0%. Anyway, if you have only one child, you husband may make too much for food stamps. Where I live, max income for a family of four is $2200 a month before taxes/deductions to qualify. The full amount is $463 but we get $270 because we are closer to the max. income level (his income is $1900 gross). I didn't see what state you live in so if your COL is higher there then so will be the income limit. Another thing is energy assistance. We are just now applying for that in a few weeks so I am not sure how it works, but the income max was a lot higher to qualify for that so I am pretty sure you could at least get help with your gas bill? Your car expenses seem so high for your income level. Can you downgrade or sell one of them? Another thing is, if you have somewhat nice cars you may not qualify for food stamps.
My husband drives around my father's very old '82 Toyota truck and they tried to tell me it was a "classic" lmao. Thankfully we had never transferred it into his name from my father's. The other car we have is a 94 Explorer so that definitely wasn't an issue to qualify. They just won't qualify someone who has a newer car that they could downgrade, at least that is my understanding. We got rid of our beloved '02 Toyota 4 runner before we ever thought about govt assistance, but I know it is also hard to get rid of cars right now too, so I don't know what they'll say. Keep us posted, check into the energy assistance, and see where you can cut costs with your cars and gas usage. I am also thinking about taking a kid in, but if I declared the income, which I know is the moral thing to do, then that $500 a month I might make becomes $230 because our food stamps will be gone, so it's kind of a dilemma. I want off govt assistance but at the same time, I'd be doing something that would add a lot of stress to me right now with all the problems I am having so I am not sure it is worth it. I would always encourage people to work tho, even if they lose food stamps, because it can be so good for your self-esteem, but I would prefer to work a little outside the home to give me a break from my beloved children and there are just no part-time jobs out there.

I hope you can figure something out somehow. Our expenses are very similar to yours and we would never make it with car payments, we barely squeak by, so maybe that is where you should focus. Your food expenses seem reasonable. I am a pretty smart shopper and we spend $450-550 a month on food, there is just not a lot you can do there unless you don't mind eating really cheaply but we eat lots of produce so that gets spendy. Do you have anything you can sell on ebay? I have been doing that here and there and it's been a lifesaver. Also, when you get your tax refund next spring, you can apply it to your credit card to bring down your payments a little bit. That's what we are going to do. Either that, or you can use that money to bridge your monthly gap for several months through this difficult economic period. I know we got ours as soon as March so if you can figure out some way to make it until then, that should help you out a lot.