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I don't even answer my phone anymore, I'm so sick of dealing with bill collectors for bills I can't pay.
WE took out a home equity loan about 3 years ago, on my 30th birthday to be exact. At the time, we knew it would be kinda a bandaid, and we just dealt with it. We still had money issues, but not like before. This year, dh was injured in an accident in Feb. He was out of work for 3 months. We only got about $5K for his disablitity salary the whole time he was out. I only work 2 days a week, and only earn $150 a week. Needless to say, our bills got REALLY far behind and we are still trying to catch up. We would go about 4 weeks in between checks, and when I got one, I would pay everything I could and there would be nothing left. THATS when dh got us into CC hell. He applied for 2 ccs behind my back and got them, one for $500, and 1 bor $2000, he maxed both of them out in no time.
I can't pay them, I can barely afford our basic needs each month and I'm doing my best with Chrstmas. He is back to working full time, and we are doing okay now, but I still can't pay those ccs, or any other outstanding bull thaty was accumalted during that time. I jsut got a phone call from our dentist saying they are going to drop us as patients unless we get this bill taken care of. (dh has HORRIBLE teeth, didnt see a dentist for 20 years. He exceeded what the Ins co paid by almost $1000) We are on a payment plan with them, but I can't keep up on the payments.
SO, here is my delemia. What would you do??? I discussed with dh last night, Maybe now would be a good time to take out another home equity loan. Our house has almost doubled in value since we bought it 5 years ago, and has gained alot of equity since we took out the last loan. I told him, if we do this, we need to have a very strict budget and have a PLAN on how we will pay this back. We want to move in a year or two, but there is NO way we would get what we want for this house. It is extremely outdated, and the kids have litterly destroyed parts of it. This place is a mess, but we can't afford to do anything to it. Iwant to get those bills paid off, AND start remodling on this house.
He is afraid ot oweing anyone more money. I agree, but I just don't know what else to do. WE have about 5 or 6 items in collections right now, things are NOT getting better. Any other suggestions??
I defianlty found this board too late! I wish I had known about this place a year ago!! I might not be in the finalcial mess I'm in right now.
Answer:
Well, if you have the equity, don't take out a home equity loan. They are a higher interest rate. I would "refinance" and ask to borrow money to pay off debt, and take the loan to 30 yrs. It will cost your the appraisal fee up front, but they can roll all refinance costs into the loan, and then they will give you back the appraisal fee at closing. We had to do this a few years back, and our payment only went up just a little. If your bank will do it, then call all the collection agencies and people who call, and tell them what you are doing, and tell them you will pay them as soon as you get the check for the amount you are wanting to pay things off with.
Good luck!
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The only thing with refinancing our home is the fact that we have a dirt cheap interest rate. WE got in really well a few years ago when they were low and made out well. NOw, if we refinace, our credit is so horrible, our interst rate will go up several points.
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This is what Dave Ramsey did when they had all of their loans foreclosed on.
1. He made a list of all monthly payments - starting with the ones that were essentials: food, house, utilities etc. then ended with outstanding bills.
2. Came up with budget - a pretty strict one - and determined to pay the top ones first and make the money go as far down the list as possible. He believes in paying off the smallest balance loans/cc's first to get your snowball going. When you come to the end of the money draw a line and whatever loans come below the line are what doesn't get paid this month. Then you write a letter to the creditors stating what your plan is - you can find sample letters in Financial Peace.
3. Now you must live that budget or even come under it. Each month continue to pay more down on your debt. Each month you must write a NEW budget for the month. They didn't go out to eat or buy new clothes the time that they were paying down their debt.
If you need ways of making this happen - please feel free to ask me. We live on a very meager budget and I'd be glad to help.
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have you called credit counselors? they will contact creditors for you and work with you. most states offer free credit counseling. sorry maybe someone esle can shed more light.
allgirls
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can be of great assisitance...also I pm'd you!
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Okay, so here is the thing. I found a worksheet to make a monthly budget. I went online, to my bank accts, and had all the receipts I saved from last month. Accroding to the worksheet, I should AT LEAST $800 extra in our budget that is unacct for. So WTH is iit?? This is just crazy! And thats without adding in all the debt, just our basic expenses, and the misc stuff we did last month. Either dh isn't being honest with me, or I don't have all the recepts. I'm so confused on how to make this work!
I made a projected budget for December, and so far, after I pay ALL the bills, AND the CC debts, I should still have $1000 in our budget. But at the end of every paycheck, I never have it. Why? I don't get it!
Any ideas?
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oops double post.
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I did this same thing and could not figure out where all this extra money was going. So I decided for one month I would spend like normal and kept a envelope with all of my reciets from everything, from the mortage payment to the fast food I had at the last minute. If something did not have a reciet then I made one on a piece of paper. I soon found out where all our extra money was going, to the fast food places and those birthday gifts we bought at the last minute and of course those stops at the conveince stores on the way home from school or a day out. I soon learned that these little extras were really costing me about $500 a month! I was shocked! so now I have cut out all of those extras and am really trying to be better. I hope this helps you and hope you get on track soon.
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Credit counselors seem to be a great answer for us. Dh was also in credit card hell. We are starting to use the credit counseling service this month. Within 4 years, dh will be cc debt free. It's only costing us $30 a month for them to handle things for us. In the end, that's only going to cost us $1500 (over the 4 years) which is absolutely a drop in the bucket for his debt. If they aren't able to help you, they surely will know where to direct you.
I wish you all of the best with this. I definitely understand the frustration you're going through. Feel free to vent, and know that there are other people here that are in similar situations! {{{{hugs}}}}