50,000 in debt, 37,000 to credit cards, HELP!

amother

Sun, Jun 02 2013, 12:49 am

so I finally bit the bullet and systematically went through all our income and expenses including the credit card balances that have been shifting from 0% transfer offers for the past 3 years. I know how I got into this mess- and I know how to avoid having it happen again, we are reverting to an all cash budget and are commited to sticking to it. Also DH is planning on leaving kollel and looking for a job for next year which should improve cash flow. 2 issues- 1) I need to somehow pay off the 37,000 quickly or declare bankruptcy. My credit is perfect at this point and I don't have plans to buy a house in the near future but don't want to lose my ability to do so in the future. I need feedback from anyone who personally negotiated with credit card companies to lower their payments to less then the current balance and also how that affected their credit card score. 2) fixed expenses leave me with 858 dollars a month for food/gas/clothes/ any consumer purchases. I need to know if this is doable for a 4 person family in the NY metro area.
I am not eligible for any programs as my income is relatively high- around 80000 a year and none of the fixed expenses can be changed_ they include child care, tuition- already reduced, car insurance, car payment- necessary for my job, gmach payment, student loan payment. Any ideas, resources, suggestions would be much appreciated. I cannot move because my job is very well paying, and moving to a place with cheaper rent would end up lowering my salary, moving to a smaller place is not an option as I'm already in a two bedroom with two kids and there isn't anything cheaper available. also my kids all have friends here and moving would cost money too. please don't bash me for being irresponsible, I;m doing a fine job of that myself Crying

I am commited to doing what it takes to become fiscally neutral. I also work full time and have small children so working overtime is a possibility but not much without sacrificing the little time I have with them.

groisamomma

Sun, Jun 02 2013, 1:02 am

Pay Angels of Debt to negotiate credit card companies for you. They will get you a lower payoff quote than you can possibly negotiate on your own. After the whole mess is paid, pay someone to clean up your credit. For a bit of money it is very possible and I know several people that have done the above successfully.

Best of luck and good for you for taking this on!

amother

Sun, Jun 02 2013, 1:08 am

OP here, my husband is actively looking for work however he is a very talented teacher and chinuch is a hard market these days, he is giving classes for free in places to get his name out and working on networking and resumes, also looking into stuff for the summer in daycamps etc, he is willing to sweep streets if neccesary but minimum wage with no prospect of advancement will not help us in the long run, he is planning on starting a degree program to further pad his resume if he does not find something for next year and is looking for tutoring/subbing if he can.

amother

Sun, Jun 02 2013, 1:15 am

groisamomma wrote:

how do they clean up your credit?

amother

Sun, Jun 02 2013, 1:16 am

groisamomma wrote:

as someone who went thru the same problem as a result of identity fraud. I used a company like the above poster said and b"h I got cleared. Also be very careful who you use as to clean up your name as I used someone who was Heimishe and chassidish and he robbed me of my money to build himself a shul. I had to go thru a goyshe company and was cleared for half the price in no time.

amother

Sun, Jun 02 2013, 1:20 am

amother wrote:

groisamomma wrote:

wait, your credit was ruined as a result of identity theft so you paid a heimishe guy a fortune to clean it up and he didn't take care of the problem so you needed to pay another company to do it?

sushi galore

Sun, Jun 02 2013, 1:41 am

groisamomma wrote:

do your thorough investigation on these companies before using them. Some of them have been investigated by higher authorities and found to be fraudulent. They charged tons and used it for personal use. Was on the news cpl wks ago.

Marion

Sun, Jun 02 2013, 1:41 am

I don't know what your shopping habits now are like, and how much you spend on groceries and other consumables. I also don't live in NY and understand things may be very different there. But in your shoes, if you use a lot of prepared foods, I'd stop. If you buy only at "heimish" stores I'd start looking at national chains. Shoprite in the NY/NJ area has great kosher selections. (Obviously if you need a certain chassidic hechsher you may be more stuck.) Buck the trend of needing new everything for every YT. Buy only what you need. Same for back to school (which is the exact same time as YT this year). Are there uniform gemachs or does the school arrange for used uniforms to be sent to kids who need them? Cut out the junkie snacks from the kids' lunches (and your own, if you brown bag it). If you buy lunch, start packing one for yourself when you pack for your kids.

grace413

Sun, Jun 02 2013, 1:46 am

Congrats on working to get out of debt.

I suggest contacting credit card companies on your own. Many of debt consolidation/credit clearing companies are not worthwhile/honest. There are non-profit companies organizations who can adivse you.

Just wanted to advise that whatever credit card debt is cancelled is taxable income to you. You should probably consult with your accountant re this.

amother

Sun, Jun 02 2013, 1:49 am

OP here

Quote:

I don't use prepared foods much but will be cutting back, I don't buy new for every YT only when the kids outgrow stuff and I can't get hand me downs- anyway my kids clothes are generally covered by checks my dad gives us before yom tov, my kids don't have uniforms, and I don't buy snack bags for them, I stopped buying lunch month's ago and only brown bag. I only but myself new stuff every few years when the stuff is hopelessly worn out or stained and don't spend a lot but it all adds up. I know my situation will improve once we have more income coming in but until that point I need to clear some debt... Thanks for the tips, keep them coming.

amother

Sun, Jun 02 2013, 1:51 am

op here

Quote:

thanks for the advice, did not know this, will speak to the accountant, also do you have names of the non profits you where referring to?

devo1982

Sun, Jun 02 2013, 11:30 am

If at all possible, I would start making a dent in the smallest bill first. Put as much as possible into paying that off, while making the minimum on the other payments to avoid further issues. As soon as that bill is paid off, roll the money you were using to pay it off into the previous minimum payment and work towards paying off the second one. And so on and so forth. It's not ideal, but it may help you start to tackle an insurmountable problem, and I bet CC companies will be more willing to work with you if they see a consistent effort on your part to pay.

Hatzlacha.

ETA:

So, say you have $500 to put towards bills each month. You have five bills to pay, totaling $5000. The lowest bill is $750, and they go up from there. Begin by putting as much as possible of the $500 towards the $750 bill - say $200/month, then divide the remaining $300 evenly between the other four bills. This means you'll pay off the $750 bill in four months time. When this is done, you then combine the $200 that was going into that bill with the $75 that was paying off the next highest bill. You're now putting in $275 a month to that bill, with $75 going to the remaining ones.

Last edited by devo1982 on Sun, Jun 02 2013, 11:39 am; edited 1 time in total

Sun, Jun 02 2013, 11:34 am

amother wrote:

OP here, family may be an option for a limited amount but not much, we can also get 5,000 from a gemach but I need to negotiate with the credit card companies, looking for someone who actually did this not people who advertise that they do and I have no way of knowing if they are legit.

PM me, my husband can help you settle on the debt, probably for half the amount. It will mess up your credit for a while though.