One thing that stood out from your post was that you are going to rely on a tax refund to pay off your loans to friends and then next year, pay off your loans to CC’s with your refund.
I know some people like to get a nice big check every spring, but it’s actually the equivalent to allowing the government to have more of your money than is required. Essentially, you are floating them a loan all year long.
From what I’ve read (I am no expert believe me ;-)) and I’m sure others would confirm, is that it would be better for you to have your refund money up front and working for you for 52 weeks out of the year. To get this done, you would adjust your withholding on your W-4.
Now you may thinking…”But, I might owe something at the end of the year.” Well, the IRS website has a tool to calculate the appropriate amount of withholdings you should adjust to so that you are as close to having no refund or charge at the end of the year.
Would anyone else confirm or agree in principle with this plan? I’m sure your friends and the creditors would rather have their money up front rather than after you have saved it up for a year by over paying your taxes.
The problem with this for us is that we get back double of what we pay in. We have lots of child tax deductions ;o) LOL
I do agree with you that we could have our money working for us all year long IF we were diligent enough to do that. My mother is an accountant. I’ve had her figure up all the different ways we could go about this. If we were to get back more through out the year it would only *work* if we put it directly into a savings. My dear husband would never let it get to the savings….he would order a pizza or something with the little extra we would get each week. Also, next time consider this better alternative to payday loans. Yes, I am talking about installment loans.
I know many people do this and I think it’s great. It just is better for us to get a lump sum at one time. Normally we don’t have problems keeping our finances on track and use the tax refund for big things we need. Pay our property taxes, car ins for the year, home owners stuff like that.
I’ve been lurking here for months reading every little thing…trying to figure out how in the world I am going to get back on track…
Today I got a payment plan set up with my Chase acct. It SOUNDS good…I hope I’m not missing something here. I’m pretty paranoid about dealing with CC companies!
My balance is 15,600. I am a month behind now and they want around $2000 payment. There is no way.
I got a payment plan of $262 a month with 0% interest for 5 yrs. All late fees and over the limit fees will stop too. If I get 2 months behind I will loose the program, so I will have to be diligent about my payments. Even that amount will be tough now, but I felt like it was my *light at the end of the tunnel* We will be eating lots of mac and cheese for awhile ;o)
Is there anything I’m missing? I hope not. They are sending it to me in writing.
One question…is there any way that they can take my tax refund? I wouldn’t think so, but I hope not as we owe family members and I promised to pay them back out of that. But next years refund will go ALL to this CC to get it GONE!
I’m feeling so much relief right now…that is until I have to start making the payment ;o)
They can’t take your tax refund so don’t worry about it! Make sure you get this in writing and read the document so you will know what is expected….
Thanks so much! They are *supposed* to be sending me a written agreement. I have 10 days to make the first payment, and that is my acceptance. I will wait to see what I get in writing first. I was told many things on the phone, but you know how that goes….I’m trying to think of what to do, and keep remembering they are not here to really help me…just get their money.
Thanks for all of the advice. My daughter is unable to work due to emotional problems. She has had them since teen years. No one seems to understand that she will not get better. She has applied for disability (Social Security, etc.) and can’t qualify because she has never worked. What does that tell you? I can’t figure these agencies out.
I know she and the grandkids are not legally my responsibility, but I don’t know how to let go of my feelings of guilt if they don’t have a place to live, etc.
We talked to Consumer Credit Counseling Service and an attorney. Both said that Chapter 7 BK is the only way. I don’t see it that way. I told my husband that if we cut down on cable, internet service, and a few other items, we could work out a budget. We now only have 1 car, so that is saving some money there.
I would like to know if it is possible to stop late fees, over limit fees, etc without filing BK13 or going through an agency. Do any companies ever listen and actually take into account someones financial situation?
Again, thanks for advice. I really do appreciate it. Maybe I could email a few members and have them assist me with a budget if that’s possible.
Watch this video related to emotional problems:
Unfortunately, the banks could really careless about your financial woes. Hell they actually perfer them as they then can charge more in interest and other penalty fees when you go behind.
Chapter 7 BK (bankruptcy) is a solution if you absolutely cannot find the cash to handle the bills. Do not do Chapter 13 BK. There are alternatives that would better and charge less.
You should look at debt settlement at this point to handle your debts. There are some good companies out there that handle you.
Is there anyone else here that had to make adjustment to one income, for whatever reason? This is been our problem, even though now Im getting SSDI, its still only half but at least its something.
Yes divorce. I have gotten some child support but about half of what the state says I should be but I figure better half then none. The food budget is about I’ll I have left that I can shrink some.
Paying cash and avoiding interest charges is the only way to make ends meet. It is easily to get trapped in the my kids “need” this and that but in the end they don’t remember a year later weather they had it or not.
The first 5 years was very hard because my child care was over $1800 a month now it is less then half because they are both in school.
I also work for a start up and took several pay cuts over the last 3 years and am just now making what I was 5 years ago.
I really need a new car but don’t have that money saved so I’m going to have to keep my current one running for 4 or 5 more year. I can’t afford the interest and the car so I have to wait. Plus I’m now only paying liability insurance.
It has not been easy finically but the kids have what they need and we are all healthy.
Mary Hunts books are also good. I like her a bit better then Dave. She is more positive. Both books contain the same strategies. You can get a snowball spreadsheet from a link on DebtProofliving.com. All the tools you really need are free. The paid service is just a convenience but you don’t need it if you have excel.
I also put my savings for large items like a car in the spreadsheet and put it in the order of when I would need it. So I have my debt payoff plus emergency fund build up and car savings and I know when each will be fully funded. I put the car and emergency fund just before my mortgage. It is very motivating to see this all and be able to adjust it every time you have a little extra.
Both authors are well read and most public libraries have both books so put any money you would have spend toward your debt payoff.
I had an account with Chase Bank with a balance of abut 6,000. I got WAY behind and this ARS starts calling me…The first call to me, the guy tells me that I had to pay at least 1,000 by 3:00p.m. that afternoon or I was going to receive a judgement letter(i think thats what he called it)…to appear in court. The thing that worried me is that my mother is also on the account. I explained that i could pay a reasonable amount each month but not large amounts. They start reading me my mothers credit bureau report and advising me that it looked to them that she could qualify for a loan or another credit card through some company called Beneficial. When I said “absolutely not, thats not reasonable”..they started telling me that I was not an honorable person and they would just call my mom. I don’t want that. My mom is in very bad health and even though her name is on the account, i want to pay it myself. So, they scared me enough to go to H&R Block and get my tax refund overnight and Western Union the bullies 1,000 so that hopefully they would realize I had good intentions to pay.
They accepted that of course but 2 days later start the harassment again. They are telling me they are NOT a collection agency. I just wonder if anyone else has dealt with these folks. Are they a collection agency or not? They tell me the “creditor” will only give me one more week to pay the balance in full. So, I asked if I could contact the creditor myself since and of course they said no. If they are not attorney’s or a collection agency, who are they?
They are relentless bullies! Also, I don’t think they had any business reading my mothers entire credit report…just because she is on the account..can they give me all of her info? Sorry for the long, rambling post. I would appreciate any advice as these people are scaring me to death!
ARS is a collection agency since they are not the original creditor. So you need to research the FDCPA and make sure they abide by it. They can tell you what they did to scare you into paying which you did. So lets learn real quick here that lesson one is to NEVER speak to a collection agency and never without a recorder for any reason.
Now for your mom – if she is on the cc then she is just as responsible as you and they can call her, pull her credit report, report negative information to the CRAs and even sue her. Doesn’t matter who used the cc. So you hopefully told your mom you re in a tight spot and fell behind but are making arrangements to pay this. Better to hear it from you than the CA.
Send a letter CMRRR from both you and your mom telling them to cease all phone calls to you at home and/or work and anywhere else and to only contact you by mail at such and such address. Also give notice that should they fail to stop calling you in violation that you are notifying them in advance that ALL calls to such and such numbers will be recorded for any future use in any federal and/or state court cases. This will at least stop the calls
Here is what I use:
You are not to communicate with my by phone at any number(s) you may have. You can communicate with me by mail at (address) only! Please also note my file that all calls to (phone numbers) are recorded for any future legal purposes.
This letter is intended to serve as legal notice and may provide a basis for complaints being filed in accordance with FDCPA, FCRA, attorneys general, Federal Trade Commission and other federal and/or state statutes.
I am in my early 30’s, married with 2 kids-4 y/o and 21 mths. Our debt began when we started our own Heating and Air Conditioning business 3 years ago. Since that time, our annual income has DECREASED by ~ $50,000!! We were so used to living on ~ $90,000/yr, and never really adjusted to the drop in income.
Now, the business is $50,000 in the hole, and us personally are
$50,000 in the hole. Unfortunately we are personally responsible for our business debt, so that means we are $100,000 in the hole.
Long story short…My husband lost motivation to go to work, thought he had ADD, he was treated for ADD, only made him worse, finally now treating him for Depression. I too am depressed and have anxiety. Not only that, but we had other stressors along the way: my grandma passed away 4 months ago, she was really sick the last year, petty issues with family, and toher stuff.
My husband is doing better on his new meds. I’m trying to find the right meds for me, nothing is working right now. I sleep a lot, and feel so blah. I have to work to bring money in, my husband can’t find a job that pays anything decent, now has decided to go back to school to complete his mechanical engineering degree.
My house is in foreclosure, behind on our car payments, had one service van repo’d. stopped making payments on Credit cards in Sept. Our annual income last year was only $52,000…my husband rarely had paychecks.
Before we can file chapter 13, I have to get my corporate taxes done, they were due last week, had to file extension b/c I just don’t have the energy to do them. I want my refund before I file, or else they’ll take it.
I feel for you, being a single mom…it’s hard going through all the debt stress. Now, my husband is feeling better, I’ve been pushing a lot of things onto him, b/c I just can’t do it anymore…I tried to stay functional for so long, while depressed. It was almost like I was a single mom at times, b/c I didn’t have my husband, he just wasn’t “there”…he didn’t seem to get how deep in debt we were, he didn’t see the reality of what was going on. He was in La La Land. Now he’s coming out of it some.
I hate to see our business go, but it is way too much stress for me, so we’re going to close it down, assume its debt, and file bankruptcy…it’s the only light I can see. I could settle my personal debt, I have some money to do that, but can’t do the business debt too….they won’t settle, it’s distributors and credit cards.
I have made the tough decision to file Chapter 13 and am in the process of getting my paperwork together and trying to find a lawyer.
I am in my early 30s, single with no kids and have suffered all my adult life with the build-up of debt from college – the typical horry story of student loans combined with easy credit that snowballed to $80,000 in debt at its height. My monthly net take home has hovered between $2500 to $2600 in recent years. I was on a debt management plan for two years with a monthly payment of $1,600 (this does not include $200+ per month in student loans that I have had placed in forbearance). I tightened up, but it is very difficult to pay rent, utilities, food, transportation, household goods, clothes and other stuff on just $900-$1000 per month. I may have been able to get by, even though it was rough, but then the car transmission went out and since I had already depleted my savings and could not get new credit, I could not pay the lump sum to fix the car. I found a cheap garage to rent a car, but I also had to pay to store the defective car. In a great perversity, I am paying almost double for a cheap car + car storage than I would with a new loan to get a car (but I don’t qualify for new credit) and my job does require reliable transportation. Of course, my monthly expenses shot up and I fell eventually fell behind.
In addition, last summer, I finally had to address personal and household issues that I had neglected. Even though I make a middle class income, I have been living like I was low-income, but I have a professional job where I do have to maintain my appearance and such. I went about 2 and half years without really buying any clothes other than worn out underclothes and shoes, but had to come to terms with the need to get some new clothes to replace parts of my wardrobe that had worn out or didn’t fit anymore. Last July, when I got a $500 bonus, I used it to buy new clothes, instead of trying to catch up on the debt payment. I was also recently made a manager and workers under me, some of whom make just over half of what I make and have kids, have better cars and stuff than me. If I am unable to maintain appropriate “trappings” that are commensurate with my job position, then I feel that my advancement is going to be limited.
I found a lot of info from this video:
Last December, I signed up for a new debt management plan, after the previous plan was terminated when I fell too far behind. To date, only half the 12 creditors have agreed to the new payment plan, but even some of the ones who agree to the plan are charging me off and one who rejected the plan is suing me to get a judgment, even though I have sent monthly payments the past 3 months.
When I got the notice about the lawsuit earlier this month, I first was thinking that I need to explain to that creditor that I was making a good faith effort to make payments and sent a letter to their lawyer to try to get them to dismissed the lawsuit. But I had a weekend to think about it and after reviewing the bankruptcy law and my personal situation, I determined that it doesn’t make sense for me to continue with the debt management plan anyways. The only way to avoid the judgment is to file bankruptcy, but that’s not the whole story.
I, of course, care about my credit rating and so I do approach the decision to file bankruptcy seriously. But my credit is already damaged, with the late or missed payments, charge offs, and participation in the CCCS debt management plans. There is not too much more damage that a bankruptcy can do to me at this point other than make part of the public record that which in private I already know, which is that I am insolvent. I have already been operating without new credit for 3 years and believe with the debt relief that I could live without credit.
The belt tightening that I’ve done has been so severe that I have neglected myself personally – I’ve really been on an austerity plan. I need to get glasses, I need to get my car fixed so I don’t have to pay car rental and storage fees, I have not paid annual fees to maintain an unrequired but nonetheless valuable professional certification, I need to get collision insurance for the car, I don’t have rental insurance for my apartment, even though I got medical/dental plan I don’t use it due to the copayment, and the list goes on. Meanwhile, my social and personal are impacted as I rarely go out and have never had a real vacation. Then, there is the nasty collection calls and letters that have my so frazzled that I don’t want to answer the phone, listen to my answering machine messages, or open the mailbox. They have also called me at work and called me at my parents home over Thanksgiving weekend! Meanwhile, I have no money to address other emergencies that may come up and I have disinvestment in other activities (continued education/training) that could end up making me more money in the future.
My concern about bankruptcy as a failure has also been mitigated.
First, I learned that successful people have been bankrupt. For example, Donald Trump has had business bankruptcies and Abraham Lincoln had business and personal bankruptcies. So with me in my early 30’s, I feel that in the long-term, I can restore my financial and personal credibility and still be successful. From the moral perspective, I don’t feel like I am leaving the creditors in the lurch. As I was going through one of my recent statements, I noticed that the balance had not changed from the previous month. Even though the creditor accepted my DMP Payment, they didn’t re-age my account and so the interest, late, and over limit fees equaled the DMP payment (the only reason I had an overlimit fee is due to penalties and interest – I never actually charged up the card over the limit). This fed stronger into my feeling that I need to do something drastic, or else I would continue to make movement but no progress, like a little mouse running on a wheel in a cage. I have paid the creditors the principal balance and a healthy profit already!
I know some people have denounced the new bankruptcy laws, but I don’t really have a problem with them. If I filed Chapter 13, I would likely be looking at payments of student loans at about $200 per month and the Chapter 13 Plan Payments of about $350 per month for a total of approximately $550 in debt payments. As I have been belt tightening over the past 3 years, my spending has been well below the allowable living expenses calculated by the IRS. I should have more than $2,000 per month to live on and resume having a normal life and build a savings.
Gross Annual Income = $49,000
Unsecured Credit Card and Personal Loans = $52,000
Student Loan Debt = $13,000
Net Monthly Income = $2,600
Student Loan Monthly Payments = $200 (in forbearance)
Partially Approved Monthly DMP Payments = $1,200*
Transporation Related Expenses Per Month = $550
Rent & Utilities Per Month = $600
Food, Clothes, and Household Items Monthly = $200 or whatever is
available (usually less)
*Some creditors have rejected the 2nd DMP plan, but take payments without further collection activity other than charge offs, though one creditor is suing for a judgment for about $5,000 which is a prelude to garnishing my wages.
First, Im so glad I found this group! Im working a budgeting or finances, there some things that I need to reduce and eliminate, but there are some huge drawbacks.
History: I became a disabled person after 9-11, it had nothing to do with 9-11 even though the DC area was also affected. Im a nurse by trade, I lost my voice completely, went through all the tests nothing organic and no masses or erosion, vocal cords move correctly but no voice. Referred to specialist, same answer. Finally after researching online I found the possible cause but need confirmation.
Convinced my Doc that I needed a referral to Neurologist, she did but for my migraines which had been getting worse. So after neuro evaluation, he said he could fix my migraines but not my voice. So he diagnosed me with what I thought was the problem affecting the speech center in my brain. Its rare, there is no cure and my voice will never come back. Okay so I was asked to leave work, I did because it was just to tough on me physically to try and throw what voice I did have up to any volume, lots of background noise in hospitals, and no one could hear me on the phone. Okay, I left, we have used up inheritance savings mainly because we were in denial of working with one income.
Well we aren’t anymore.
I have refinance or house to lower payments, we basically can live on my husbands salary, and I FINALLY got my SSDI, after 2nd go round, but it ain’t much but its something.
My question(s) are this, I can pay the CC down (we have CapitalOne also) but the Barclaycard they have huge finance charge per month so after making a payment of 205 only 40 goes to balance. Is there anything I can do about this, I don’t want to loose the credit cards entirely but I would like to hear pros and cons.
The second question is this: Insurance, We had a huge policy with NY Life for my husband to use for retirement and cover the house, it was 646 per qtr, well last year I contacted our agent and said it would have drop, okay so we did that but I never got a payment slip for it, well I started calling and email agent he said he was checking. Well I started harrassing him again, and he came back yesterday, and said he would have to resign Paul up for the larger policy, then lower it and if Paul (DH) passes underwriting then we pay them another $375 plus a higher quarterly payment than we talked about a year ago when discussed downgrading of $275, what he quoted me was $175. So I emailed he back and said that was unacceptable. He also gave me the name and phone number of the guy in Richmond, VA that handled this.
This was our agents error not ours. We had also talked to him originally about getting a good chunk of that money back, does anyone know if it can or cannot be done and how?
We also have longterm health insurance, which is $240 a month for both of us and Im thinking about nixing that, but Im not sure we can get anything back on it.
Thanks for any help, I can’t use the phone all the time, it depends on the day and how strong my whisper is, so if I can get opinions and ammunition that would help me tremendously. Also if someone things I should just write them a letter.
There is hope though. Remember to pay what you need to survive before feeding the wolves that are at the door. All the credit card company will do is call and harrass you, at least for a little while. And honestly, medical bills are less likely to sue or get nasty with you than credit card companies.
If I were in your shoes, I would try to settle the credit cards on my own and negotiate with the hospital for a low monthly payment. A garage or ebay sell of all the stuff that you don’t truly need to survive is a good place to start in digging out of the hole. We sold our boat, almost all of my nick-nacks, clothes we didn’t wear & books we had already read. We only made 600 bucks or so but getting rid of all the stuff, helped us focus more on what we were doing. A weekend or part time job for six months or so would really help as well.
I will be praying for you and your family. Let us know if you have any other questions. Posting your budget/income might help people better help you see what options you have.
From my own personal experience Capital One will put the settlement in writing IF you fax them an offer.
Just write down the terms you agreed to and fax for confirmation…. something like:
As per our conversation on (date) I am prepared to offer the following:
Please fax acceptance of this offer back ASAP so I can continue with this offer.
Please understand that this offer is not admitting to anything. This offer is only a “good faith” on my part to settle this long disputed debt.
Your FAX Number
As for Capital One sending a closed letter…. when “toothpicks” freeze over! I settled in December and they adjusted my balance to reflect a reduced balance even though I have a signed acceptance and a cancelled check. Without these 2 items I would not have a leg to stand on.
If you learn nothing else PLEASE learn to
GET IT IN WRITING!!!!
I am having a capitol One party with my husband this very moment!! Thank God thank God. After back and forth phone calls and faxes I just mailed a check- virtually our entire tax refund for 4900. The debt- 7100. PAID IN FULL! Maybe next year or the following that tax refund will go straight to my roth I will be starting. I cant even express how wonderful this feels. All over the envelope I wrote “goodbye capitol one’ ” goodbye Dana and Pariser law office” and “Freedom!” Next stop mbna- 2 accts- then the ‘hell’loan as Dave Ramsey says.
We have literally come back from the pit and have a very long way to go. I have made some overtures to mbna and will start faxing a hardship request- dh is still very much disabled and out of work following the 2 strokes and open heart surgery. But babysteps, babysteps.
Only pay what you have to in order to live, keep a roof over your heads. Cut all non-essential spending; don’t pay any credit card or medical bills you have, they are secondary to keeping your home. Do keep your utility bills up to date, and work on getting your mortgage and equity loan up to date.
Do you have any family that can help with either the kids (so you can get a 2nd job for a bit) or with essentials?
If you get calls from creditors, don’t talk with them (unless it is the mortgage or home equity company); they can’t get blood from a stone and you don’t need the anxiety the calls will create. If you talk with them, don’t make promises, just tell them you have no money. If they sue you, they can’t take your home; they can only get about 10% of your gross via garnishment and that’s after several months time (It takes about that long to get the judgment and file the income execution). Hopefully by then you would have turned some of this around.
You could consider selling your home if you can get anything extra out of it over the mortgage and equity loan, but then you also have to consider what it would cost you monthly to replace the living space considering the kids. Not sure if this would work for your situation or not.