Oh Financial Woes

[mamabutt2]

So, I'm not looking for legal advice, but DH and I are completely drowning in debt. Just thinking about all the people we owe money to sends me into near panic attack. We have enough money to pay our day to day bills and maybe a little extra, but that's it.

I know we aren't the only ones to have made dumb decisions in the past that pile up and haunt our present (and future). Is bankruptcy all that bad? Are there other/better alternatives out there? I'm going to look up some lawyers in my area to get some advice from. Give me your stories, good or bad, and advice please! I need to know that there are better days ahead!

[Deleted]

I don't really have any advice but we are also struggling. Not nearly as bad as you though.
I think bankruptcy is the kinda thing that will stay with you forever. Even after all debts are cleared you still need to live with the fact that you went bankrupt. For me, that would be a hard truth to face about myself.

I'm guessing it will also stay in your financial history. Making it harder to take loans, credit etc in the future. I really hope you can resolve this without declaring bankruptcy, I don't think it's the way to go unless you are really desperate!

[aggiebug]

May 28, 2015 0:02:44 GMT -5 mamabutt2 said:

So, I'm not looking for legal advice, but DH and I are completely drowning in debt. Just thinking about all the people we owe money to sends me into near panic attack. We have enough money to pay our day to day bills and maybe a little extra, but that's it.

I know we aren't the only ones to have made dumb decisions in the past that pile up and haunt our present (and future). Is bankruptcy all that bad? Are there other/better alternatives out there? I'm going to look up some lawyers in my area to get some advice from. Give me your stories, good or bad, and advice please! I need to know that there are better days ahead!

I highly recommend Dave Ramsey total money makeover. It can help you make a plan to get out of debt that really can work. It will take a heck of a lot of work and sacrifice and it won't be easy but it is much better than filing for bankruptcy.

Honestly lawyers are good at the law but not necessarily good at financial planning; they could help you file and can give you advice from a legal standpoint but that doesn't mean they understand what is best for your financial future. I know Dave Ramsey has people you can talk to that know a lot about bankruptcy process as well as debt consolidation. It may be worth looking into.

[cougarette]

I agree about Dave Ramsey! He is awesome. Some of his advice includes getting rid of credit cards, sell your car(s) if needed and get cheap beaters (unless you don't have car payments of course), don't go out to eat, etc.

[lotsofdotts]

I totally understand what you are feeling. DH and I are both teachers and don't have a ton of extra income. We are looking at our budgets and deciding which debt we can tackle first. My car will be paid off in August so we are redirecting that money to new bills so that we can pay those down. We put extra, even if it is just $10, to credit cards each month to help pay those down as well.

I also use money tracking apps to show where we are spending frivolously. I was shocked to see how much money we spent eating out each month.

[misshart00]

Third for Dave Ramsey. It's intense, but it works.

Also, you didn't say what kind of debt you have. There are several things that can't be declared in bankruptcy. Like student loans.

[osumegs]

mamabutt2 not sure if any of those are medical bills, but I know my sister was able to come up with special plans with several hospitals. Some of her bills were written off. also, she got student loans on an income based plan that cut her expenses a lot.

[FlutterOfYoshis]

To piggy-back what some others said here, really follow where all your money goes and keep a strict budget so you can prioritize what things to pay off when. Would it be possible to get a loan from family to pay off some debt? Friends of ours did that to cover the hospital bills when their LO was born. Also, if you happen to have an accountant friend you trust, perhaps ask if they dabble in personal finance (it's DH's hobby, so maybe someone else out there is like him).

[michelle142]

Sit down and look at all of your incoming money. Then literally write down/track every penny you spend. It's tedious, but it gives you a great look at what's going on.

For hospital bills, if you haven't already, call the billing dept. and set up a payment plan.

Rather than a lawyer, I would consider calling a financial advisor. They can help you set up a plan of attack.

Bankruptcy isn't an ideal solution, but it can work for some people. I think it's the same everywhere, but may vary state to state... but I think it stays on your financial record for 10 years. Don't quote me on that though. So if you're planning on any big purchases that need a credit check, bankruptcy probably isn't the best solution.

Another thing to consider is to transfer all or most of your debt to a 0% or low interest credit card and set up a payoff plan.

Cut costs where you can. If you have a home phone and cell phones - get rid of the land line. Home internet - switch to a slower speed to spend less. Cell phones - consider a prepaid phone rather than a costly contract. Don't eat out. Meal planning (I do a month at a time) and coupons save tons on food.

[misshart00]

And I definitely agree about a financial planner over a lawyer.

[mrsclark731]

I fortuantly can't speak from personal experience, my husband is in charge of finances and we are blessed he makes a good living for us. However--my ex fiance was drowning us in all kinds of debt. Like you said, bad decisions made when he was young that haunted us in addition to buying a house at the height of the market (that he couldn't really afford). I know the feeling and it is horrible.

I think everyone else's advice is sound .... seek a financial planner over a lawyer, try some budgeting programs, etc. But sometimes bankruptcy is the only answer and it can change your life for the better. I used to do bad-credit car loans (the ex had used car lots) and I've seen thousands of credit reports. You can recover from bankruptcy and most people do. It can take all that weight off your shoulders. IF it is what is right for you don't be too ashamed to do it and make a better more stress-free life for your family.

Take a deep breath and good luck!

[mamabutt2]

Thank you all so much for your advice. I will be looking up financial advisors today and some lawyers just in case. Also definitely looking up the Dave Ramsey stuff too!

[nbad311]

I believe the worst part about filing for bankruptcy is a ruined credit score (for a long time, or, forever?  I'm not exactly sure).  Therefore anything that requires a decent one, you might have trouble obtaining for some time - basically getting any type of loans (namely mortgage - If you are already a homeowner with a mortgage, I'm not sure what happens then.)  If and when you are able to obtain whatever credit or loans, they will be at unfortunately high interest rates.  Also, student loans are never forgiven in bankruptcy (sadly )

Reach out to people you know that have gone through it, or similar hard times, and ask for advice from them too.  Bankruptcy is sometimes a good option if you are struggling and weigh the pros and cons and see that it could be a good option in the long run (and short run too!).  I disagree that the stigma of "having gone bankrupt" as someone else said is something to worry about....  So what.  It's just legal jargon, with a bad stigma.  (Kinda like "getting sued" - it's not always a huge drama fest, just legal action).  Do what's best for your family without worrying about what others will think of you!  

Hugs, and good luck!  Babies are indeed expensive, man

[WittyLittle]

@holachica beat me to it, can only offer support. The only experience I have is from my sister. They were drowning too, what helped them was first consolidating all debt on to one place. That made everything visible and manageable. then they covered that debt through a loan from my parents (if that's an option). Next year they will remortgage the house because they don't like owing my parents money. They had to go on a huge financial diet but in the end in 2 years it should be under control.

I'm "lucky" that I saw the bad choices my sister made and I became vertu conscious of living under my means since day one. I hope everything works out soon and you very some space to breathe!!!

[lilyelayne]

No advice, just support. Hope you figure out a plan that's good for your family.

[mamabutt2]

We were in a bad place before but we were slowly getting it under control. Then we're got in a wreck two years ago that really got us. We got so far behind on some bills and added more bills with legal fees and doctor bills. A car got repossessed, our taxes got taken for other bills, etc., etc.

Now with hospital bills, ER bills from after the birth, babysitter fees, and general catching up on day to day bills, DH and I are just really overwhelmed with it all. We don't own our home, but we're would love to buy in the future. Or credit SUCKS (see above reasons why lol) so it'll be a while. We didn't know if bankruptcy would speed that process up/make it easier, or not. We know we couldn't but for like two years or so anyway, but it may be longer if we just try to pay everything off slowly. It's just all so complicated. Idk who let me adult....I suck at it lol

[cloe111479]

Not much advice here either. Just support.
I know it seems like a hole you can't get out of but take it one step at a time. Find out what options are before filing bankruptcy. It itself is a costly process.

[RedGiant]

I just read an article about financial planning in Parents magazine from last month. It lists Dave Ramsey as a good place to start for budgeting, as well as SmartAboutMoney.org and AmericaSaves.org In addition if you are "drowning in debt and considering bankruptcy", check out the National Foundation for credit counseling at nfcc.org and search for a low fee credit counselor (about $25 per month) who may be able to help negotiate reduced payments with creditors.

I haven't looked into these myself, but figured I'd pass along this info in case it helps.

[angeldcf]

mamabutt2 - PLEASE post on the Money Matters board:
pandce.proboards.com/board/28

These ladies are incredible and can help. They will go through your budget to offer tips, solutions. Bankruptcy isn't evil, but should be an absolute last solution. Dave Ramsey is good for those starting out w/o efunds, but others (Suze, etc) have more financially-savy advice.

[mamabutt2]

I'll definitely check it out angeldcf and I'm going to look at the NFCC RedGiant! You guys have all helped me out so much! I definitely don't want to file for bankruptcy because I think there are better options, but hubby seems dead set on it. I'll definitely give these a look and sit down and talk to him about it

[kartish]

My sister recently had to file for bankruptcy. Her ex left one day and left her with a mortgage and all the bills. Bankruptcy was a long drawn out process. She lost her house and her car.

She had to find a new bank, she had been turned down for car loans time and time again, and is living in a relative's basement. But she went through Dave Ramsey ' FPU and is almost ready to buy a used car and move out into a condo. So from watching her experience, it was worth the process to have the "fresh" start, but hadn't exactly been easy afterwards.

[seamonster]

Bankruptcy isn't ideal, but you can recover from it. It doesn't ruin your credit score forever and you can quickly bring up your score because you're no longer drowning in debt. You'd need to talk to a lawyer about how to keep your car and whatnot after filing for bankruptcy. The resources above can help you figure out how to get back on track.

Also some debts in some states have statue of limitations where after a period of time you no longer are obligated to pay anything. Often this is medical debt. You may want to look into the laws in your state to see what would apply to your situation.